2019 saw big banks suffer from NPA woes, many NBFCs, HFCs are struggling because of lack of credit for growth. While the Retail, MSME and Micro Loans such as NBFC-MFI and the new-age Small Finance Banks continued to garner market share and robust growth.
In terms of employment, in the year 2019 the BFSI sector witnessed several layoffs. For almost a decade now, we had been hearing that technology will replace jobs, in 2019 we indeed saw machines taking over redundant jobs in the sector and affecting jobs for many. About 30,000 investment-banking jobs were axed as the global banking industry looks set for a gloomy second half of 2019.
In August, the Hongkong and Shanghai Banking Corporation (HSBC) Bank has announced that it has fired around 200 of its employees in India from its technology function. Deutsche Bank laid off 18,000 employees and replaced them with robots. Wells Fargo also reduced redundant roles from support functions and technology testing in India.
Technology has surely changed the employment scenario in the sector, however, it holds a huge potential for the industry, which companies have now come to realize.
“Industry has also come to realise the enormous potential of diverse digital banking ecosystem and hence organizations are focusing on ecosystem partners and technology-driven business architecture,” shared Kishore Poduri, Head – Human Resources, DBS India, with People Matters.
Tech in BFSI: Creating new demand for skills
As the IBEF, mentions, “The advancements in technology have brought the mobile and internet banking services to the fore.”
With India’s digital lending estimated to reach $1 Tn by FY2023 driven by the five-fold increase in the digital disbursements, the banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge.
Pankaj Gulati, Chief People Officer, Fincare Small Finance Bank said, “The future of banking is making a move from physical to assisted digital and ultimately to completely digital. With AI and big data, precision in offering tailor-made products at the right place and right time, is the new paradigm in banking.”
He shared with People Matters how all facets of banking viz. marketing, customer service, operations, are seeing a shift and creating a demand for skills such as data architecture, analytics, database management, cloud, project management, Machine Learning and AI.
“The talent priorities have been heavily influenced by digitization, powered by artificial intelligence, machine learning and with a keen focus on improving customer & employee journey. Post the acquisition of Wholly Owned Subsidiary (WoS) license earlier this year, we are growing as an organisation, and are always looking for future-ready talent,” adds Poduri.
According to Poduri, in such a scenario, future-ready skills like Big Data, UI/UX design, Cloud Computing are in much demand with an orientation on risk and governance, analytical and learning mindset.
In fact, Rachit Jain, CEO & Founder, Youth4Work believes that people who understand technology will gain handsomely.
"Finance and insurance industries are moving towards higher adoption of fintech methods to improve their overall course of business and people who have studied finance technologies, data science, AI and blockchain will be needed more. People with advanced technical skill sets will definitely take the job market by storm," he shared exclusively with People Matters.
Technology: Driving the BFSI sector & reshaping employment needs
Globally, the relationship between banks, fintechs, and bigtechs is also taking a new shape. In 2019, Apple debuted a credit card that created in partnership with Goldman Sachs. Now, Google plans to introduce consumer bank accounts later this year in collaboration with Citibank and a California-based credit union. On the other hand, the fintech sector is also seeing more growth, with nearly 60 upstarts focusing on financial services -- from Stripe Inc. to Chime Inc. to Plaid Inc. -- have garnering valuations of more than $1 Bn in recent years, according to CB Insights.
To move in tune with the pace at which fintechs & bigtechs are expanding their market share in the sector, established banks and traditional financial services companies would now have to move faster in the coming decade. Better regulations and government’s support would however be demanded by the banks, especially in the public sector, to match up to the tech advancements the entire industry is going through.
As Poduri highlighted, “Currently in the BFSI sector, technology is the deciding factor which differentiates the ordinary from a market leader. A huge amount of effort and resources are being invested in going digital. Implementing artificial intelligence, backed by a robust machine learning structure is among the top priorities across the industry.”
With transformation technologies more readily accessible, powerful, and economical than ever before, how companies in the sector leverage them and nurture talent to make the most of these available services will be key in 2020 and the decade to follow.