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14Sep
BY Laurie DeSalvo IN Uncategorized Filling the Digital Talent Gap

In my last letter, I looked at the need for speed to keep up with the digital revolution. I illustrated that with a few success cases from small community banks.

And I quoted Gartner: “Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.”

The thing is that “the use of digital technologies to change a business model” is anything but trivial. The tricky part is that “digital” is not only about overhauling technology but corporate culture as well. And it is people who define culture.

That is why EY in its recent study Transforming talent – The banker of the future says:

“Digital disruption will make tomorrow’s banking workforce unrecognizable from today’s. Banks must build a culture that nurtures diversity of thought and ensure bankers have the new skills they need to succeed.”

The necessity for new skills will cut across positions at pretty much all levels, from analysts and managers to directors and up to the C-level.

 

Agile Scrum versus Finance 101

So, what kinds of skills are we talking about here? Boston Consulting, looking at the Power of People in Digital Banking Transformation identifies no less than nine areas of digital skills. The terms banking or finance don’t even appear there.

To narrow that down a little I think that the immediate need will be greatest in the following areas:
  • Digital and Social Marketing/Engagement
  • User and Customer Experience
  • Digital and Mobile Product Management
  • Innovation and Strategy
  • Big Data & Analytics
  • Information Security
  • Digital Payments
While that list looks less daunting than the exhibit above, make no mistake: it is a tall enough order. Finding people to fill these new roles will be difficult. Already demand far outstrips supply and banks resort to the “triple B” strategy of building (i.e., training existing employee), buying (through M&A) and borrowing (i.e., freelancers) the workforce they need.
You want some numbers? According to EY, Millennials will constitute 72% of the global workforce by 2025. That will shape the world of work in the future. For instance, work styles will be more agile in the digital world. Already today around 34% of the American workforce can be classified as freelancers. And an eye-popping 47% of occupations in advanced economies are considered at high risk of being automated in the next 20 years.
Recruit Differently
So, clearly those responsible for staffing banks big or small need to hit the ground running now. EY identifies ten stages of the HR lifecycle in banking where a fresh outlook could lead the way. Let’s look at the first three:
  1. Broadening the talent pool… via accessibility. For instance, what roles in banking really require prior academic achievements? For those who should connect with the customer, perhaps local knowledge and people skills are more important? And it might allow you to hire more people from the local community.
  2. Attracting talent… with purpose. High-flying IT and engineering grads needed in the digital age do not turn to banks as their employers of choice. There are no banks ranked in the top 25 most attractive companies to work for and only two in the top 50. So, banks must restate their value proposition. And for Millennials that often means “purpose.” As I have pointed out in the past, luckily for Community Banks, they can point to a much clearer purpose proposition than anonymous big corporations.
  3. Recruiting… with new technology. If you want to appeal to employees who will lead your digital transformation, it is a tad contradictory to torture them with an antiquated online recruiting tool. Also, be aware that they are judging you as a prospective employer based on your current digital presence, and your willingness to change and evolve that strategy for the future.
What we have discussed here is just the tip of the iceberg. Developing a new generation of workers in banking and finance can be done, but it will not be easy, and will require a change in mindset from the top down. The best place to start may be at the leadership level – we are increasingly seeing new leadership titles at smaller to mid-sized institutions, such as Chief Experience Officer, Chief Digital Officer, Chief Product Officer, and Director of Digital Product, among others.
Consider investing in a leader who could define and drive a digital transformation for your institution, and you may be well on your way to joining and thriving in today’s digital revolution.

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