Digital transformation is taking the banking industry by storm, making it essential for banks to adapt their human capital quickly to remain competitive.
In many cases, the way banks allocate their resources is still designed for a world where people go to physical banks to make a deposit or withdrawal.
But the needs of today's banking customers go beyond these 'traditional' transactions, requiring a much more proactive and consultative attitude from financial professionals, with democratised advice and intelligent automation.
More consumers are moving to cloud-based online services to make instant payments, invest in the financial market, apply for a personal loan or mortgage, trade on FOREX or crypto, or purchase insurance of various kinds through the comfort of their mobile phone or computer.
So, how can banks prepare for a future that ensures profitable growth while meeting the new demands of their customers?
According to the Boston Consulting Group, in a typical bank today, up to 90% of employees are dedicated to day-to-day operations, with only 10% dedicated to change and innovation. This is worrying!
To provide a truly competitive service, banks need to rethink talent management and accelerate their transformation, delivering tailored and flexible financial solutions to meet their customers' needs.
Reshaping banking services can come with a costly and complex technology 'debt', so IT spending should be reduced and technical flexibility increased to ensure scalability. And when faced with security and regulatory risks, they need to adopt risk management practices based on artificial intelligence.
However, it remains crucial to have the right people and skills behind these processes. To succeed in their digital transformation, financial institutions' management committees must focus on three main areas:
- Technology and processes: integrate the latest digital technologies into all areas of the business and upgrade existing processes and working methods.
- Culture: encourage a growth mindset driven by innovation and foster a culture of trust, collaboration, and ownership; communicate frequently to ensure transparency and adaptability of the organisation.
- Talent: according to the Harvard Business Review, 78% of transformations fail, often due to a lack of attention to the critical role of culture and talent.
This suggests that massive investment, in terms of training and salary attractiveness, in the acquisition of these specific skills is vital.
From this perspective, it is therefore crucial to analyse the adaptation and evolution of the banking workforce.
It is also clear that disruptive trends are increasing the need for new technology-oriented skills:
- Mobile and online banking requires expertise in user experience, user interface design and developing new applications.
- The emergence of the metaverse (fully digital world) also calls for specific skills to appeal to the avatars of new banking customers. (The metaverse is covered in the January 2022 ECOFIN MAG).
- The rise of blockchain and the evolution of payments creates a need for skills such as blockchain architecture (hyperledger), wireframing and electronic payment.
- The increased use of AI and big data is creating a growing need for skills in Python, TensorFlow, machine learning, deep learning, Hadoop and natural language processing.
- Cloud computing and open banking APIs are driving the need for skills in Amazon Web Services, OpenStack and integration skills.
- Skills in network security, DevSecOps and cyber risk management can help enhance organisations' cybersecurity..
- The growing use of data – the raw material of AI – calls for the support of data scientists, data architects and other specialists in defining efficient data lakes.
- The exponential growth of digital payment methods and decrease in cash use are leading to a growing need for adapted and multi-platform solutions that provide uncompromising security for transactions.
To meet these challenges and safeguard your position as a go-to player in your market both now and in the future, our teams can help you get the most out of data and to develop new partnerships to unlock the benefits of the best technological breakthroughs whilst sharing and controlling your costs.
Thanks to our network of over 24,000 banking experts, we will help you develop a more consumer-centric approach to offer ever more personalised services while preserving margins.
We use our sector know-how spanning over 40 years and our end-to-end offer to work on your projects to create value through innovation, digitalisation, security, compliance, and managed services.
This text was originally published in French in the September edition of Ecofin magazine. You can read it by clicking here.