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Employment in financial activities in Miami-Dade County is growing more slowly than last year, with jobs in fin-tech companies declining due to the volatility of the financial sector.
Jobs in financial activities in South Florida grew by 3.3% from March 2022 to March 2023, from 206,100 employees to 213,000, according to the US Bureau of Labor Statistics. In the Miami-Miami Beach-Kendall area, the growth rate is 3%, from 88,000 to 90,600.
Financial activities added 4,900 jobs to the Miami area in January, according to the Florida Department of Economic Opportunity.
As of April, employment in financial activities in Miami-Dade was 91,400, according to the Bureau of Labor Statistics. Florida reached an all-time high of 680,000 people working in financial jobs that month.
Lending activity in the financial sector is growing in Miami-Dade, said Manuel Lasaga, president of StratInfo, a business economics and finance consulting firm based in Coral Gables. “[Banks] have taken the opportunity, seeing that the economy last year was growing at a healthy pace, to push on their lending activity.”
For this year, he said, “I continue to see maybe a slower growth, as the economy still grows, but not at the rate that it did last year. We will continue to see moderate growth in the banking [industry].”
Insurance is another area where there has been significant growth in the past couple of years, he added, “mostly in the Tampa area. It reflects the moves to Florida from the north.”
Non-depository banks, or fin-tech firms, however, are showing a decline in growth, he said. “They grew very fast several years ago, picking up momentum. With the slowing economy, they became vulnerable. That area has been decreasing in jobs, and I think it will continue to downsize because the type of financing they make is much riskier.”
The rate of growth for fin-techs in Miami is reaching negative 3% to 4%, he said.
Nationwide, tech companies laid off 131,000 workers this year, according to Crunchbase. However, fin-tech revenues, according to a report by Boston Consulting Group and QED Investors, are projected to increase from $245 billion to $1.5 trillion worldwide by 2030.
As of May, there are almost 450 fin-tech startups in Miami, according to Tracxn Technologies. Companies like Swedish mobile banking app Majority, which is expanding to Little Havana; or New York startup Bank Novo, and consumer-focused challenger bank Fortú, which is moving to Miami, have grown in the past years.
“[Fin-techs] expanded very rapidly, because after the pandemic,” said Mr. Lasaga, “with the huge amount of money that the federal government put out in the economy for a couple of years, consumers went on spending sprees, particularly after the rough months of the pandemic. That consumer spending provided an opportunity for the fin-techs to expand their growth.”
Traditional banks, he added, have been focusing more on commercial real estate lending: “that’s one area where they could influence growth rate. They’re pushing lending to improve their margins.”
Acquiring new lender positions is going to be top priority, Mr. Lasaga said. Wealth management and IT skills also remain the top specialties financial employers look for.
In addition, banks gradually reducing their office footprint could affect employment in the financial sector, he said. “With technology, [there will be] less branches, less people.”
Finally, consolidation of banks will mean some institutions will shut down, he said, however allowing banks to achieve higher margins and to gain more market share, but reducing the need for jobs in the financial sector.
https://www.miamitodaynews.com/2023/06/20/fin-tech-declines-cut-into-financial-sector-jobs/
