Which Financial Services Sectors Are Quietly Hiring While Others Slow Down?

The headline numbers in financial services hiring can be misleading. Industry-wide vacancy data suggests a market in recovery, with around 55% of UK financial services firms planning to increase headcount this year and sector-wide vacancies up roughly 12% on 2025. But those figures obscure what is actually happening on the ground: a sharp divergence between sectors where hiring is accelerating and those where it has gone quiet.

This is not a story about a market that has slowed down uniformly. It is a story about a market that has split. And the gap between the two sides is widening.

Where Hiring Has Slowed, and Why

The most visible slowdown is in parts of traditional investment banking that remain tied to deal flow. M&A advisory hiring, particularly at the junior to mid-level, has not returned to pre-2022 volumes in many firms. Transaction activity has improved from its trough, but not enough to trigger the kind of broad-based recruitment drives that characterised 2021 or early 2022. Firms are being cautious, preferring to run leaner teams and wait for sustained deal momentum before committing to headcount growth.

Equity capital markets and parts of sell-side research have followed a similar pattern. Structural questions around the long-term shape of these businesses, compounded by the growing role of AI in analyst-level work, have made firms more hesitant to expand. Where hiring does happen, it tends to be highly targeted: a specific sector specialist, a senior relationship manager, a replacement for a departure rather than a net new addition.

Asset management has also been selective. Passive investment continues to take share from active strategies, and fee compression has made firms reluctant to grow teams unless there is a direct and demonstrable revenue case. The exception is in alternatives, where the picture is markedly different.

Private Credit: The Clearest Growth Story

Private credit remains the most active hiring market within financial services. The asset class has expanded rapidly, now estimated at around $3.5 trillion globally, and firms are building teams to match. Headcount in private credit is expected to grow by 15–25% this year across the industry, with demand spanning investment professionals, portfolio management, operations, and business development.

The structural drivers are well understood. Regulatory constraints on traditional bank lending, particularly under Basel III, have pushed more borrowers toward private lenders. At the same time, the volume of uninvested capital in private credit funds continues to grow, creating sustained deployment activity and, with it, hiring demand. This is not a cyclical uptick. It is a structural reallocation of capital, and people are following it.

That said, private credit is also beginning to attract more scrutiny as the market matures. Risk concerns are rising alongside growth, and firms are investing in credit risk and portfolio oversight capabilities as well as front-office deal teams. The hiring profile is broadening, not narrowing.

Risk, Compliance, and Regulatory Functions

If private credit is the most visible growth area, risk and compliance is the most persistent. Regulatory pressure across UK financial services has not eased. If anything, it has intensified, with expanded requirements around operational resilience, financial crime, ESG oversight, and AI governance all creating sustained demand for experienced professionals.

The challenge here is supply. Skills shortages are re-emerging in compliance, particularly in specialised areas. The talent pipeline is being squeezed from both ends: senior compliance leaders are retiring in significant numbers, while the specialist qualifications required in areas like AI risk and financial crime take one to three years of postgraduate study to complete. There is no quick fix for this imbalance.

The numbers bear this out. The average time to fill an AI-related role in UK financial services has roughly doubled over the past year, from around five and a half months to nine. The salary premium for AI-skilled candidates in the sector now sits at 49%. AI has gone from the seventh most scarce tech skill to the most in-demand in just eighteen months, a 260% increase in reported shortages.

For firms trying to hire in this space, the competitive dynamics are intense. And because compliance and risk professionals tend to be highly portable across subsectors, the ripple effects are broad.

Infrastructure and Energy Transition

Infrastructure-linked roles are another area of sustained demand, driven by a combination of government spending commitments and private capital flows. The UK's £530 billion infrastructure pipeline over the next decade is supporting hiring across project finance, infrastructure credit, and specialist advisory. Growth in infrastructure output is forecast at around 3.9–4.4% this year, comfortably ahead of the broader economy.

Within financial services specifically, this translates into demand for professionals who sit at the intersection of structured finance, credit risk, and sector expertise, particularly in energy transition, transport, and social infrastructure. These are not easy profiles to find. Candidates need both technical depth and commercial judgement, and the pool of people with genuine experience in infrastructure finance remains relatively small.

Private credit firms are also active in this space, building out dedicated infrastructure lending capabilities and competing directly with banks and specialist funds for the same talent.

Fintech: A London-Led Resurgence

Fintech hiring in the UK is showing renewed momentum, with London forecast to see a 37% year-on-year rise in fintech vacancies this year, accounting for around 70% of all UK fintech roles. Outside London, growth is more modest at around 16%, but the direction of travel is clear.

The demand is concentrated in roles that combine financial services domain knowledge with technical capability, spanning payments, digital lending, regtech, and embedded finance. Firms in this space are competing for talent not just with each other but with traditional financial institutions that are building out their own digital capabilities.

What This Means for Compensation

The divergence in hiring activity is producing a corresponding divergence in pay. Firms are budgeting above the general 3.5% merit increase baseline for 2026, particularly for roles tied to risk, compliance, and technology. But within those categories, the variation is significant.

Specialists in high-demand areas are commanding substantial premiums. The gap between generalist and niche compensation is widening. And firms are increasingly having to tailor packages to role scarcity rather than seniority alone, which creates internal complexity and, in some cases, real tension.

More broadly, the industry is moving away from short-term, revenue-centric bonus models toward multi-year, risk-adjusted performance frameworks. This shift reflects both regulatory expectations and a recognition that retaining specialists requires a different approach to incentivisation than retaining generalists.

Retention Is Now Inseparable From Hiring

In the sectors where hiring is most active, retention risk is elevated. Professionals with in-demand skillsets, particularly in compliance, private credit, and infrastructure, are being approached regularly. Counter-offers are more common. And the cost of losing someone six months after hiring them is not just financial; it disrupts teams, damages client relationships, and sets back capability-building by a year or more.

The firms that are navigating this well tend to treat retention as part of their hiring strategy, not an afterthought. That means clearer progression pathways from day one, better alignment between pay and responsibility, and roles that are designed to be sustainable rather than just attractive on paper.

Conclusion

The financial services hiring market in 2026 is not slow. It is uneven. Private credit, risk and compliance, infrastructure, and fintech are all actively hiring, while parts of traditional investment banking, equity capital markets, and active asset management remain cautious. The difference between the two groups is not marginal; it is structural.

For employers, the implication is that hiring strategy needs to reflect this unevenness. Blanket approaches to recruitment, compensation, or retention are unlikely to work when the market itself is this fragmented. The firms that are succeeding are the ones making targeted bets: identifying the specific pockets of demand that matter to their business, understanding the competitive dynamics in those pockets, and moving decisively.

For candidates, the picture is similarly nuanced. Opportunities are concentrated rather than widespread. Professionals with the right combination of skills and experience in high-demand areas have significant leverage. Those in slower sectors may find it more productive to think about how their skills translate into adjacent growth areas rather than waiting for their corner of the market to recover.

The market has not stopped moving. It has just become more deliberate about where it moves.

Sources

• Sanderson — Top 6 Predictions for Financial Services Hiring Trends in 2026
• Robert Half UK — Finance Jobs Market Q1 2026: Hiring Trends and Top 10 In-Demand Roles
• Beqom — Compensation Management Trends in Financial Services 2026
• Taylor Root — Compliance Hiring Trends in UK Financial Services for 2026
• ResultSense — UK Financial Services AI Hiring Takes 9 Months, 49% Pay Rise
• Staffing Industry Analysts — London to Lead Surge in UK Fintech Hiring in 2026
• Ares Management — Private Credit Outlook 2026: Growth and Maturity
• CRG — UK Infrastructure Hiring in 2026: Key Trends & Talent Insights

‍

Croft & Co is a boutique executive search firm specialising in financial services, with a particular focus on investment banking and M&A across the UK and France. We work with both institutions seeking senior talent and professionals navigating complex career decisions.

‍