- “People are not your most important asset. The right people are”
———-Jim Collins, Author of Good to Great
The global banking enterprise had already been experiencing changes when the COVID-19 pandemic struck in early 2020. Consumer desires were evolving rapidly, as people increasingly came to expect more from their online banking services. And as banks have digitized their user interfaces, they have also deployed next-generation technologies in the middle and back-offices to help reduce costs and provide better service.
All these changes have put people at the top of the bank’s agenda. A pre COVID-19 research (McKinsey et al, 2021) on the future of work shows that virtually all roles in bank branches will decline over the next decade. The average branch size is expected to decrease from six full-time equivalent branches to four by 2030.
The global pandemic has accelerated these trends and added urgency to the discussion. During the first months of the crisis, the bank’s human resource managers successfully adjusted their organization and working methods; banks and their staff responded very well. Banks are rapidly moving to a digital model of sales and service, increasing remote consultation, and reshaping physical delivery. As a result, talent is quickly redeployed from teams with surplus to those with shortage. Banks are now sifting through the changes brought about by the COVID-19 crisis to understand which are temporary and which are permanent.
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Research further showed that unlike previous crises, banks have had to use different levers more creatively to deploy talent dynamically and build the human resource of the future, namely: training and retraining, upskilling and redeployment. Over the past year, banks have requisitioned their human resource rapidly and on a large scale, leveraging the efficiencies gained through skills alignment. They are also building the infrastructure to support effective skills upgrading and redeployment.
Banks resilience in the new normal
The COVID19 pandemic has had devastating effects on people’s lives and livelihoods, and banks have seen it largely in their work supporting customers during the pandemic. As a result, the organizational structure of banks has been affected in several ways. One such is that the crisis has prompted a shift from a hierarchical to an agile structure, in which individuals have autonomy, leaders delegate to empowered groups, and relationships are less formal and more flexible. For example, some banks have begun organizing their teams into tribes (small groups dedicated to single tasks and providing them with the resources and approvals needed to complete each task). Agile teams are renowned for creating high-quality customer experiences, especially in multi-channel environments.
Also, banks have reallocated talent from areas of excess to areas of shortage to help cut costs and build reputation. Some of these redeployments require minimal training and are quick. But there have also been major changes, from branch closures to customer service practices.
COVID19 should not be seen as an opportunity to think about the next phase of banking, but rather as to how make financial products available to everyone; it is an opportunity for digital but also for new products.
Research (McKinsey 2021) also showed that banks provided training on new skills that people could use in their current jobs (skill up) or for new jobs (re-skilling). For example, banks have trained financial advisors to provide better teleservices, cashiers have qualified to be “universal” bankers, and branch employees have qualified to return to office roles. General bankers have both sales and service responsibilities, being both personal bankers and cashiers, among other functions.
Recruiting rightly, developing sustainably for the next decade
The future of banks workforce is crucial as sustainability is at the core of long-term success. Banks should deliberately ensure the right calibre of human resource is in place and the best form of development of such recruits is employed. There are many ways to ensure this:
- Begin with leadership to create sustainable development
Banks should as a matter of urgency, partner with an expert in sustainable recruitment to bring in the right pool of talent that will create value in the short, medium, and long terms. These initiatives require committed leadership to be successful. The workforce of the future will need equally qualified leaders who create environments that are positive and foster growth, rather than just telling people what to do and who communicate with employees in a clear and transparent manner about the company’s change programmes.
An expertise in hiring, can help also create a community where all recruited staff for banks are consistently trained, coached, and developed to remain resourceful for the longer term. It is always important to have “talented developers” who can identify, evaluate, and train employees as needed. Talent developers help leaders transform business into talent needs. They can also help identify the right people for future needs and, with the support of learning and coaching professionals, can help them get there.
- Investment in a learning culture
Culture plays a critical role in implementing quick and efficient reskilling. Creation of a culture of engagement doesn’t usually come naturally and often requires a significant up-front investment. Banks that do this well often use a combination of capacity building and rich experiences, along with a cohesive and inspirational communication plan, starting with a clear definition of purpose and shared values. Building a culture of seamless learning also requires ongoing and consistent commitment. The more the banks treat this as a journey and not a one-time training, the better the results.
- Proactive and sustainable upskilling for industry needs
Before undertaking any development or retraining effort, it is important to know what the effort is for and what the skill goals are. Based on expected role allocation trends (per McKinsey), banks have focused on core skills for specific roles and general demand across roles. Banks that achieve effective transformation have designed learning objectives closely with their strategy.
A key player in the industry, identified the “big six” as the unique and fundamental people and organizational capabilities the company believes must remain relevant, now and in the future, in order to maintain competitive advantage, ensures the trust of its customers, regulators and employees. The six capabilities included customer experience, data fluency, leadership, non-financial risk management, cybersecurity, and operations management serve as a compass to guide human resource management and company assets, where it will create more value for the organization and for its customers.
- Building scalable infrastructure
Research showed that discussions with banks about transformation, pointed to the fact that many of them rightly need to invest in large infrastructure and systems. This would ideally include several elements, such as a skill store, an internal talent market to encourage demand for migration and retraining, a central library to provide online and off-site training, and a learning factory for creating reusable learning content. New tools can help businesses build a skill pool.
Conclusion
The financial services industry has faced significant disruption over the past decade, with significant impacts on the talent needed in the future. Organizations that act early and decisively in a crisis will do better. The COVID-19 pandemic has forced banks to question the status quo and accelerate moves. Talented leaders have long called for some of these changes, such as the dynamic redeployment of employees into positions of increasing demand, as well as providing employees with career paths that are diversified diversified and supporting corresponding development.
Armed with the right mindset and tools, talented leaders can drive these changes and stay ahead of their competition in building the workforce of the future. This could give banks an opportunity to not only think about the next phase of banking, but also how to deliver financial products to people. It can also provide an opportunity to tap into digital possibilities and start thinking about new products, services, and ecosystems. The big banks of today have been training the best people of tomorrow. Are you ready to join them?
