Digital technologies are radically transforming the world of banking. The growth in digital technologies has been phenomenal. In just the last five years, according to data from the RBI, the volume of digital payments has moved from 6.09 million in 2013 to 24.33 million in 2018. There is an increase in the penetration of banking and digital services in not just the urban/metro areas, rural and semi-urban areas of the country, but also globally. In fact, India ranks on the top of the list with the highest number of global bank branches, closely followed by China.
But the expansion of the scope and breadth of operations doesn’t necessary mean more jobs, research by McKinsey shows that 43 percent of all banking work hours can be automated using current technologies. And about 50 roles drive 80 percent of business value in Banking. As technology based digital disruption creates new opportunities it also creates new challenges. The BFSI sector, like many other sectors, faces a number of challenges – which include an evolving regulatory landscape, balancing changing customer preferences and delivering top-notch “secure and privacy compliant” services. As the sector realigns itself to changing technologies and intelligent automation, what are some of the top talent challenges? And how are leading banks preparing for the change?
In a conversation with People Matters as part of a series in partnership with Oracle, talent leaders from Yes Bank, Kotak Mahindra and RBS India shared their perspectives on the changing ecosystem and the talent imperatives.
Retraining & retaining a digital workforce
Among the top challenges that the sector faces is the need to retrain the talent to meet the needs of the business at a time when there is continuous change and disruption.
The need for specialized digital skills is changing the demand for skills. Sukhjit Pasricha, Group CHRO, Kotak Mahindra Bank calls the recruitment and retention of quality digital talent as a “key strategic challenge in the financial services industry”.
How you deliver the present needs of core banking systems through technologies like mainframes, yet reskill and poly-skill this employee base to cater to Cloud Computing and Big Data is the key to success
Speaking of upskilling talent, Inderpreet Kaur, Director HR – Technology, RBS India said, “How you deliver the present needs of core banking systems through technologies like mainframes, yet reskill and poly-skill this employee base to cater to Cloud Computing and Big Data is a key to success.”
Once banks have identified skilled employees, and/or retrained their workforce, the key challenge then is to retain this talent. Deodutta Kurane, Group- President, Human Capital Management said, “The biggest challenge facing the banking industry (and also one of its biggest governors of success) is the ability to bring in the right mix of technically skilled people, integrate them into the business and keep them engaged enough to be retained.”
“Banks will need to have a different mindset in the way they treat employees. It is not just money that today’s talent is after—it is meaningful work, flexible methodologies (like letting them work in smaller groups and across groups), and being challenged by working with more agile teams,” Kurane said.
To succeed in the marketplace of talent, banks will need to get better at not just identifying and reskilling, they need to build an organizational culture of continuous learning. In essence, they need to be an employer brand that is perceived as a great place to work.
"The recruitment and retention of quality digital talent is a key strategic challenge in the financial services industry"- Sukhjit Pasricha, Group CHRO, Kotak Mahindra Bank
Leadership and the need for a cohesive digital strategy
Another key determiner for the success in navigating the digital world is the leadership mindset. As one saying goes, “In a calm sea, every ship has a good captain. Banking needs leaders who have a strategy to deal with the change agenda as well as the vision and ability to drive transformation and manage the change effectively” Kurane said. He also noted the importance of the need to demonstrate ambidextrous leadership to lead the core business while also thinking about innovation and how the world is transforming.
From an HR leader’s perspective, managing human capital responsible for overseeing these shifts will be critical. The solution, according to Sukhjit, is to move away from a fragmented digital approach that is not aligned to an organization wide digital transformation. If banks want to successfully navigate this era of change, they need to have a “cohesive digital roadmap”. This ensures that companies are cognizant of the long-term vision while also thinking about the digital initiatives that are to be implemented from a project-to-project basis, he added. These shifts also indicate a need to move away from a strictly hierarchical structure to more towards a fluid organization.
In a calm sea, every ship has a good captain. Banking needs leaders who have a strategy to deal with the change agenda as well as the vision and ability to drive transformation and manage the change effectively"- Deodutta Kurane, Group- President, Human Capital Management
Leverage the power of data
One of the key advantages of operating in the digital age is the amount of data that banks have access to. “The Future of Talent in Banking” report by McKinsey states that companies need to leverage data to make people decisions – instead of making decisions on subjective biases or customary practices. Some areas where companies need to leverage data to: Recruit, Retain, Motivate and Promote talent.
In order to successfully navigate the digital era, Banks will need to reinforce their skills strategy in a way that continuously updates with the changing needs of the market. In addition to leading the change management due to shifts based on digital transformation, they also need to invest in their leadership and human capital in a way that supports the long term digital vision. As talent strategies get more robust and agile, banks will also need to make the most out of recent research – whether that’s to do with diversity and inclusion or leveraging technology, in addition to enabling a workplace culture that takes into account a new generation of digital native employees.