Banks have been known to be inherently risk-averse traditionally. In a 2018 Global Innovation ranking by PWC, less than 10 financial services companies found a place in the top 1000.
Against the backdrop of game-changing regulations, the dazzling pace of digital change, evolving customer expectations and intensifying competition, is that reality about to change? Banking is one of the few industries where the regulatory mandate is driving API-led collaboration and ecosystem-driven innovation in most countries.
In 2019 and beyond, the uptake of emerging business models and technologies will transform the banking business dramatically. New realities will demand organisation and business strategies that use digital technologies to empower every application, individual, internal team and external partner to deliver to their peak potential.
As banks ready themselves to tap into the fresh opportunities of the digital world, they are beginning to navigate the challenges of new skill sets and culture shifts. What are some of these challenges and trends we are talking about?
• The war for talent
A recent ISACA study revealed that on an average about one-third security positions remain unfilled in Europe for six months or longer. The demand for cybersecurity and digital security professionals will continue to increase in 2019. The second crucial skillset will be a breed of experienced data scientists and AI specialists who can take use cases and proofs-of-concept into production.
Over the past couple of years, banks have made considerable investments in the form of joint ventures, centres of excellence and collaborative innovation with industry and academia for a variety of advanced use cases. In 2019, banks and enterprises will evolve their hiring and recruitment practices to win the war for talent that can see them through successful live implementations for tangible business results.
Thirdly, extensive automation will be a crucial building block of digital transformation at banks in 2019. Banks will hire automation experts and consultants who can design a roadmap for organisation-wide automation and implement such large-scale programmes successfully.
• Market and business expectations vs banking talent
It is typical for organisations to set aside funds for training university talent to make them productive. Given the pace of digitisation and change in the industry, this gap between fresh talent and productive talent will continue to grow if business and academia do not join hands to align student curriculum with market expectations and integrate live projects to expose students to real world industry challenges.
In 2019, we expect enhanced industry-academia collaboration in banking. In addition to new fresh talent that understands the business of banking, banks are likely to grapple with the challenge of scarcity of experienced professionals who understand the customers, the organisation, and the interest of various stakeholders.
• Diversity and inclusion
A recent study by PEW estimates millennials to hit the 73 million mark in 2019 to outnumber the baby boomers. The number of people between the age of sixty-five and above is projected to triple by mid-century.
Banks will accelerate their efforts to attract and retain this diverse talent mix this year. 2019 is also the year when a generation that has grown up using digital technologies and social media enters the workforce. Banks will have to redesign their engagement practices to tap into this digital-savvy generation.
An important aspect of diversity and inclusion in 2019 and beyond will be ensuring digital accessibility for employees with disability. In times where manual labour is on a steep decline at workplaces, digital accessibility for all will not only be a compliance mandate but crucial to harness the full potential of the workforce.
The 2018 WHO study reports that about 15 per cent of the global population suffers from some form of disability. The credo of a truly digital organisation does not stop at being digital in systems, IT, and processes to ensure enhanced and immersive customer experience. It goes above and beyond that.
Digital accessibility for all in the workforce, including visually impaired, colour blind, or patients of palsy, will be essential, and banks will ensure this by using emerging digital technologies such as virtual assistants and AI.
Diversity in the workforce will expand to dimensions beyond age and gender to include talent from industries outside of banking and disciplines beyond banking and commerce, as banks embrace the greatly expanded definition of banking.
To do away with old practices of extensive documentation and time consuming approval processes that deter millennials from using a service, banks will discard hierarchies and adopt flat organisational structures.
• Culture shift
Banks will need to align their organisational practices and culture for the new trend of short-term and part-time employment—short-term employees that are not on the payroll of a bank but work with more than one bank at a time.
A bank’s culture will need to ensure that these employees can deliver what is expected efficiently and work with the rest of the workforce without any IP infringement or loss of confidential information.
Banks will need to design suitable practices for infrastructure use, appraisal, feedback and recognition for this workforce. Continuous learning and customer centricity will continue to be integral to success.
Banks will make learning programmes available on mobile devices and use digital technologies to ensure real-time customer feedback reaches relevant departments and employees. Digital technologies are changing the face of banking.
They are presenting new challenges, but at the same time introducing new opportunities for businesses to create value and flourish. However, what’s required on the part of organisations including banks is optimal digital-human interplay that allows harnessing these technologies for higher efficiency gains and customer-centricity while empowering humans to perform higher value tasks with creativity and empathy.
Banks that train their talent for new market realities, engage the new generation of workforce, inculcate diverse practices including learnings from outside of banking, and adapt their cultural and organisational practices to tap into the full potential of human capital available will emerge winners in the digital world.