Talent and transformation: New strategic approaches for banks
Around the world, #banks are engaged in the transition to what we at Accenture call “the New”; they are undertaking initiatives to digitize operations, reduce costs and create previously unexplored revenue streams.
The transition to the New is based upon the twin pillars of #technology and #talent. The technology—in the form of cloud, big data and analytics, #blockchain, robotic process automation, machine learning and artificial intelligence—is readily available, and although it may not be easy to identify the right solutions and to graft these solutions onto the existing computing and data framework, it can be done.
However, as banks are discovering, it is just as difficult to build and maintain the talent pillar as it is to develop or acquire needed technology. Banks are competing for new talent, not only with other banks but with technology start-ups, internet giants and a variety of digital players. Indeed, digital players interested in making inroads into the banking market are poaching talent from the banks themselves.
Banks have not helped themselves on the talent front with their unrelenting focus on cost reduction. They have announced staff reduction objectives connected to plans to digitize and automate. This may please shareholders, but it can hardly be expected to please staffers worried about being displaced by digital technologies. Banks will be unable to compete with the Googles and Apples of the world if they are not seen as valuing the major asset (along with capital and liquidity) embodied in the competency and customer focus of their people.
There are, in my view, three key steps banks need to take in dealing with the “people problem” and the impact of digital #transformation upon the workforce:
- Banks should figure out where they stand on workforce issues. This means either admitting that the workforce is, in effect, a commoditized asset to be managed for optimal efficiency at the lowest possible cost, or making it clear that talent is a competitive differentiation point and that people are central to the success of the organization. Depending on the bank’s overall strategy, either approach might be valid, but claiming that people are vital and then treating them as interchangeable parts is a recipe for failure.
- Banks then need to take actions appropriate to the people strategy they have adopted. Banks’ actions should match up with their stated objectives; for example, few banks have increased their training budget in recent years, even though training might be an excellent path to creating the intellectual property and people asset that distinguishes one bank from another in the marketplace.
- Banks need to acknowledge that they (and their people) live and work within a larger social context. In modern industrialized societies, large employers have obligations to their workers that extend beyond compensation and benefits. Banks contemplating major restructuring or reductions in staff due to digital initiatives should be working with an ecosystem of partners—including universities, government agencies and other potential employers—to develop coherent solutions leading to retraining and employment for displaced workers.
Banks have not yet come to grips with the full impact of digital transformation, including automation and artificial intelligence. In my next blog, I will look more closely at how artificial intelligence will affect banks, and how banks can create a powerful new force by combining AI with human insight and judgment.
For further reading about the impact of technology on the workforce, read Whose Customer Are You? The Reality of Digital Banking.
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