Banks raise compensation in response to the cost-of-living crisis

Many stalwarts of the UK financial services industry have raised compensation, but is fintech following suit? 

Image source: Mike Regnier, Santander CEO UK

Many financial services organisations – including Santander, Virgin Money, and Visa – have boosted compensation for UK workers in the face of the cost-of-living crisis.

Santander has announced it is set to give 11,000 employees a 4 per cent pay rise, while all staff earning less than £35,000 will be eligible for a pay boost from August onwards.

The Spanish-owned bank also said it would all increase its entry-level salaries to £19,500, up from £18,520.

According to anonymous sources reported by the Financial Times, Visa is set to offer a 5 per cent pay increase to all staff in the UK from July onwards.

In addition, Virgin Money has announced all staff making under £50,00 will get a one-off payment of £1,000, which it says is around 78 per cent of its staff.

With a significant portion of traditional UK financial services institutions throwing their workers a bone, are fintechs following suit to tackle rampant inflation, which the Consumer Prices Index (CPI) pegged as rising by 9.4 per cent in the past year?

Berlin-headquartered insurtech INZMO told AltFi it is supporting its employees by increasing the salaries of its staff based in Germany and Estonia in line with the countries’ respective inflation rates, which it said are 8 per cent for Germany and 22 per cent in Estonia.

“And in order to remain competitive as employers, salaries for new hires have also been adjusted in line,” added Meeri Savolainen, co-founder and CEO of INZMO.

Investing app Crowdcube said it gifted all non-management employees £500 in response to the crisis.

However, Mark Hartley, CEO and Founder of BankiFi told AltFi that following suit may not be on the cards for all fintechs.

Hartley said many of even the largest fintechs are privately funded and still building their products and services, and therefore simply may not have the capacity to give pay bumps.

“The priority should be for fintechs to remain in business so that all of their employees can remain employed and weather the incoming storm of the cost of living crisis,” Hartley added.