Digital transformation is reshaping the banking industry, and banks need to adapt their human capital quickly to remain competitive.
In many cases, much of a bank's employee allocation is designed for a world where people went to physical banks to make a deposit or withdrawal.
Beyond these "traditional" transactions today's banking customer requires a much more proactive and consultative attitude from his financially savvy counterpart, advice must be democratised to address the greatest number and therefore be intelligently automated.
Changes in the banking industry will drive consumers to move to the cloud (online services) to make an instant payment, 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 PC.
How can banks prepare for a future that ensures profitable growth and meets 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 compete, banks need to rethink talent management and transform, quickly. They need to accelerate the delivery of tailored financial solutions and be more flexible to meet their customers' needs.
Often with a costly and complex technology 'debt', they need to reduce IT spending and increase technical flexibility to ensure scalability. Faced with security and regulatory risks, they need to adopt risk management practices based on artificial intelligence.
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.
- Mobile/online banking increases the need for expertise in user experience and user interface design, as well as skills in developing new applications.
- The emergence of the metaverse (fully digital world) will also require very 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, 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.
- The growing importance of cybersecurity leads to increased needs in network security, DevSecOps and cyber risk management.
- 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 the limitation of cash use are leading to a growing need for adapted and multi-platform solutions that ensure 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, our goal is to 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.