Banks are now using Artificial Intelligence (AI) to transform bank operations, open banking is no longer a distant dream, and omnichannel bank interactions are commonplace. There is an influx of digital transactions, powered by an increasing number of digitally empowered customers. Banks are exploring innovative solutions to delight customers and make banking easier and more convenient for them. Banks are aggressively investing in digital products and processes because of a rise in competitive pressure and customer expectations. Fintechs and digital-only banks that offer superior customer experience are giving stiff competition to banks. An increasing number of customers are migrating to digital channels that now form the bulk of banking transactions. Huffington Post predicts that soon people can expect Siri to help them move funds and open a new fixed deposit account with their bank. In fact, such services are apparently already enabled by innovative banks globally.
While these trends increase dependency on tools and reduce reliance on manpower, banks continue to need technologically proficient personnel who can provide seamless customer experiences across devices. This translates into a huge demand for tech talent – from information technology engineers and security officers to guard against cyber threats to data scientists who analyze massive data and churn insights to personalize the digital experience of customers(Also Read - Tech talent trends in the banking & finance sector). It is not just commercial banks who are in dire need for tech talent; investment banks are hiring tech pros to analyze and build their digital businesses. CNBC reports that JP Morgan added hundreds of staffers in tech roles while it cut headcount overall. Goldman Sachs is looking for tech talent to work on its digital consumer lending and app bank.
Video killed the Radio Star
The banking industry has undergone a Cinderella-like transformation. What was once characterized by legacy systems and processes is now known for swanky offices, swift digitally powered transactions, and increased automation. Private and public sector banks are using artificial intelligence and analytics to automate back-office functions previously done by bank staff. In India, Axis, ICICI, and HDFC banks are implementing robotics to centralize operations and lessen the turnaround time in loan processing and selling financial products to customers. For instance, while HDFC Bank launched an electronic virtual assistant (EVA), State Bank of India (SBI) has introduced a chatbot to handle customer queries and offer details on retail products and services. ICICI Bank has deployed software robots in over 200 business process functions, reducing the response time by up to 60%.
What does this seismic shift to digital mean for banks’ manpower needs? While data entry jobs are slowly diminishing, there is a demand for a new kind of banker – the digitally savvy one. Traditional jobs such as updating the passbook, depositing cash, verification of know-your-customer details, salary uploads are going digital, leaving banks with no option but to reduce headcount. However, there is a growing need for bankers who know how to use these AI-powered systems. This means the existing staff either need to reskill or banks need to employ technical staff.
The future of banking is digital-first
Banks must have a digital-first approach to keep pace with customer expectations. The future of banking will be defined by digital transformations that help banks automate processes and lower costs, drive agility and quickly launch products and services, and provide personalized and superior customer service in near real-time across multiple touch-points.
Here are the top trends that will have an impact on the future of banking:
Banks are expected to adopt regression models powered by machine learning to deliver customized and better offerings to customers. This will result in an increase in demand for data scientists as more manpower will be needed to analyze big data and give insight into customer behavior, expectations, and predict responses.
We have seen above how banks are currently using artificial intelligence to improve customer experiences. This trend is expected to continue as banks will use AI to automate processes and improve customer experiences.
Bitcoin is blockchain’s gift to the world. It is a digitized, decentralized, public ledger of all cryptocurrency transactions. As blockchain is meddle-proof and immutable, banks are now looking at integrating this successfully into their ecosystem. NITI Aayog is already in the process of creating ‘IndiaChain’, India’s largest blockchain network, to reduce fraud, speed-up contract enforcement, and increase transparency,
Data is the equivalent of gold or precious metal in today’s world. The entity with the maximum data is essentially the richest. But with all this data comes the danger of hackers who are constantly looking at unique ways to penetrate the system. The future will see more robust security measures to protect customer data with the help of biometrics, facial recognition, and voice prints, which are harder to crack. IDC predicts that in the current year, spending will rise by 20 percent on next-generation security-based authentication methods to make transactions more secure and win customers’ trust.
How can talent assessments help?
According to a recent CareerBuilder report, five of the top 10 jobs that companies can’t find enough qualified employees for are tech jobs. So, regardless of the industry, unless the tech talent shortage disappears somehow, companies that can identify and hire the tech talent they need are going to have a major competitive advantage. To keep up with their technically savvy customers, banks must find ways to recruit and retain technical staff, and this can be done with the help of talent assessments.
Using pre-employment tests or talent assessments to recruit candidates can significantly reduce the time taken to hire a candidate. Talent assessments are also known to select candidates that are more engaged and have a higher likelihood of success on the job. With talent assessments, banks that have no previous experience hiring a technical staff can conveniently screen and select candidates to join them. (Also read - Automated skill assessment can save you $20000)
Assessments also provide the flexibility of testing candidates for a variety of skills, which is especially important for corporate and investment banks. Bankers need to possess a wide range of skills including excellent numeric/quantitative skills, high attention to detail, superior written and verbal communication skills, and good problem-solving abilities. This is needed to understand customer requirements, propose solutions, products, and services, provide advice related to M&A and markets, and prepare accurate reports. Investment and commercial banks can leverage talent assessments to test candidates for high technical, verbal, and numerical aptitude critical to superior performance as a banker.
Talent assessments are also used to assess the skills of existing employees. This can be matched with the banks’ future requirements to create a plan for training manpower on systems or processes, so their skills are not redundant and are continually growing.
How are banks currently using talent assessments?
Investment banks are notoriously tough to get into. They receive far more applications than they can employ. For instance, Goldman Sachs received more than a quarter of a million applications from students and graduates for jobs in 2016 and only hired 4% of them. JP Morgan claimed that it was hiring only 2 percent of graduate applicants to its investment banking division, and Citigroup hired 2.7% to its global investment banking division. Bank of America Merrill Lynch, reported that it had offered jobs to 3 percent of its investment banking applicants and that 90 percent of those that were offered jobs accepted them. This skewed ratio is because of the tough vetting process that banks use to select talent.
Banks currently use a variety of tests to recruit their staff. They use a mix of numerical tests to test the applicant’s number crunching abilities, logical reasoning to test critical thinking, and verbal reasoning tests to check for comprehension. Some also use situational judgment tests and personality profiling to check for company fit. With the increase in demand for data scientists and analysts, some tests also assess data analytical skills, mainly the ability to compile, structure, and make sense of data obtained from multiple sources. While numerical tests are more black-and-white in the sense that there are clear right and wrong answers, with the others, a scale is used to measure how close the answers are to the banks’ expectations.
Change with the changing times
Banks are evolving rapidly and so are their needs. If currently, the need for tech staff is not much, it is guaranteed to rise exponentially in the coming years. As the demand for tech talent increases across industries, corporate and investment banks will need to focus on a robust assessment process to quickly screen and select candidates. In this respect, talent assessments are the perfect tools to assess candidates for multiple skills per industry standards, in the shortest time and at a venue and time of your choice. These talent assessments can also be used to assess skill gaps for existing employees to devise ways to reskill and train them for the future. Banks must adopt a digital-first approach in their talent assessment to be ready for the next wave of transformations that are expected to hit them. (Read - How to begin with your digital recruitment strategy)
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