Here’s how technology is driving future of the banking workforce
Apr 17, 2017, 14:34 IST
Technology is transforming banking at an unprecedented pace. It’s impacting every part of the business including customer expectations, products, processes, and people. We believe, in 2017 disruption of the Indian banking industry will be led by five technologies. Following the success of the Jan Dhan program, the Government has asked banks to step it up by enrolling all customers in mobile banking by 31st March. While it may actually take much longer than that, there is little doubt that mobility will continue to be at the forefront of a changing banking landscape. Next, open banking, riding on initiatives such as Unified Payments Interface (UPI), will make it extremely simple for customers to engage with providers of the best, most contextual experience, regardless of where they have their bank accounts.
With a number of data centers springing up in the country, including the ones by leading global providers, Indian banks now have more avenues to run their systems from the cloud. If banking is to become a platform business, such as Uber or Airbnb, involving open collaboration with an ecosystem of providers, there is no option but to run it on the cloud. The fourth technology to disrupt banking is clearly Artificial Intelligence. Early signs of AI are visible in ICICI Bank, which has used Robotic Process Automation on 200 processes or more, and in HDFC Bank, which has deployed a robot in its branch. But this is just the beginning. Banks will follow with AI investments across functions spanning the front, middle and back office. Last but not least is blockchain, where once again, ICICI Bank has taken the lead by setting up a pilot network with Emirates NBD for trade finance and remittance transactions. Blockchain has also attracted the attention of the regulators; recently RBI’s research arm, IDRBT, completed an end-to-end test on blockchain in a trade application that had multiple financial institutions, banks, clearing houses, and regulators involved.
These technologies will not just change things at the front end; they will transform business models. And that will obviously create an impact on the workforce as well. For instance, just one technology – AI– could automate several processes and help banks achieve scale without adding new resources. ICICI Bank strongly believes that automation will enable their employees to focus on more value-added services while having better work-life balance.
Our view is that while new digital technologies will automate a number of routine, repetitive jobs, they will also create a sizeable demand for new skills such as experience design, data scientists, among others. The point to note is that unlike static jobs of the past, these roles will constantly shift and change; some will go away in a few years and others will be added.
This will pose a tricky workforce management challenge for Indian banks, who until now have trained people for specialized positions and lifelong careers. Going forward, they will have to nurture a versatile and flexible workforce that can slip in and out of different roles, not once, but several times in a career. An important part of that is to have employees who can work at the intersection of banking, technology, and value – people with reasonable knowledge of both the business and technology domains – given that the lines between various functions within an organization are rapidly blurring.
A good example is an initiative by Axis Bank called Academies, to build the proficiency of its workforce partnering with institutions such as INSEAD, CRISIL, INSOFE. The bank is enabling its employees to become future ready as digital bankers, while selecting an area of specialization. The bank calls it “Twin-Tracking”.
Rotation policies will assume great significance in this scenario. Banks must shift personnel around to challenge them to adapt to new roles, acquire new capabilities, and be more creative in whatever they do. ICICI Bank credits its innovativeness to a policy that says any project must go live in 90 days. The Bank says that the only way it can meet such a demanding target is by assigning each project to a specially assembled cross-functional team, which works exclusively on it for that period.
The future belongs to banks that are “truly digital”. Among other things, such banks are highly empathetic to customers. If a bank has to be empathetic as a whole, all its people, and not just customer-facing staff, need to walk the talk. For that, all personnel must be sensitized to customer needs, and trained to think “customer first” regardless of whether they serve in the front or back office.
A good example here is DBS Bank, which won the Digital Bank Award from Euromoney recently. The bank has a big focus on getting their company technology literate with a slew of initiatives for enabling their employees, changing the culture of their organization and embracing digital more pervasively.
Can our banks turn these changes around overnight? Clearly not. People-related change is the hardest kind; hence banks need to approach it thoughtfully. It will also take them several years to reskill the workforce at so many levels. In the short-term, to make the most of opportunities which will not wait, banks can look at partnering with fintech companies and other startups to partly bridge their skill gaps. In the long-term, however, they would have to do it the hard way by establishing a culture of lifelong learning.
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With a number of data centers springing up in the country, including the ones by leading global providers, Indian banks now have more avenues to run their systems from the cloud. If banking is to become a platform business, such as Uber or Airbnb, involving open collaboration with an ecosystem of providers, there is no option but to run it on the cloud. The fourth technology to disrupt banking is clearly Artificial Intelligence. Early signs of AI are visible in ICICI Bank, which has used Robotic Process Automation on 200 processes or more, and in HDFC Bank, which has deployed a robot in its branch. But this is just the beginning. Banks will follow with AI investments across functions spanning the front, middle and back office. Last but not least is blockchain, where once again, ICICI Bank has taken the lead by setting up a pilot network with Emirates NBD for trade finance and remittance transactions. Blockchain has also attracted the attention of the regulators; recently RBI’s research arm, IDRBT, completed an end-to-end test on blockchain in a trade application that had multiple financial institutions, banks, clearing houses, and regulators involved.
These technologies will not just change things at the front end; they will transform business models. And that will obviously create an impact on the workforce as well. For instance, just one technology – AI– could automate several processes and help banks achieve scale without adding new resources. ICICI Bank strongly believes that automation will enable their employees to focus on more value-added services while having better work-life balance.
Our view is that while new digital technologies will automate a number of routine, repetitive jobs, they will also create a sizeable demand for new skills such as experience design, data scientists, among others. The point to note is that unlike static jobs of the past, these roles will constantly shift and change; some will go away in a few years and others will be added.
This will pose a tricky workforce management challenge for Indian banks, who until now have trained people for specialized positions and lifelong careers. Going forward, they will have to nurture a versatile and flexible workforce that can slip in and out of different roles, not once, but several times in a career. An important part of that is to have employees who can work at the intersection of banking, technology, and value – people with reasonable knowledge of both the business and technology domains – given that the lines between various functions within an organization are rapidly blurring.
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Rotation policies will assume great significance in this scenario. Banks must shift personnel around to challenge them to adapt to new roles, acquire new capabilities, and be more creative in whatever they do. ICICI Bank credits its innovativeness to a policy that says any project must go live in 90 days. The Bank says that the only way it can meet such a demanding target is by assigning each project to a specially assembled cross-functional team, which works exclusively on it for that period.
The future belongs to banks that are “truly digital”. Among other things, such banks are highly empathetic to customers. If a bank has to be empathetic as a whole, all its people, and not just customer-facing staff, need to walk the talk. For that, all personnel must be sensitized to customer needs, and trained to think “customer first” regardless of whether they serve in the front or back office.
A good example here is DBS Bank, which won the Digital Bank Award from Euromoney recently. The bank has a big focus on getting their company technology literate with a slew of initiatives for enabling their employees, changing the culture of their organization and embracing digital more pervasively.
Can our banks turn these changes around overnight? Clearly not. People-related change is the hardest kind; hence banks need to approach it thoughtfully. It will also take them several years to reskill the workforce at so many levels. In the short-term, to make the most of opportunities which will not wait, banks can look at partnering with fintech companies and other startups to partly bridge their skill gaps. In the long-term, however, they would have to do it the hard way by establishing a culture of lifelong learning.
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(The article is authored by Mahesh Dutt Kolar, Vice President & Head - APAC, Infosys Finacle)