The news: The Trump administration overhauled the H-1B visa program by imposing a $100,000 fee on successful applications, a massive cost increase that is expected to create significant hiring hurdles for the finance industry.
The top 10 US financial institutions (FIs) have a total of 12,000 H-1B visas, and the biggest US bank, JPMorgan has 2,440, per Business Times.
Why it matters: The visa holders fill engineering and technology roles that are essential for core financial activities like developing quantitative models, algorithmic trading, risk management, and software. The new $100,000 charge will be prohibitively expensive for hiring entry-level junior analysts or tech workers.
FIs are expected to increase their reliance on foreign business support centers as a result of these new costs, per ATM Marketplace.
Our take: The banking industry is heading toward a painful reckoning on its talent pipeline. The firms that rely on a continuous stream of junior talent to feed their development teams will suffer most—which will push FIs to change how they staff.
The inevitable outcome isn't necessarily hiring more high-skilled US workers, but a forced acceleration of the trend toward offshoring critical technology.
We may see some larger firms and industry groups lobby against this change if offshoring still doesn’t spare FIs’ bottom lines.
This is our immediate perspective. We’re actively developing this story throughout the day with more research and data from the EMARKETER database. Our in-depth analysis will be included in our client-only Briefings. Non-clients can click here to get a demo of our full platform and coverage.
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