NAVIGATING TALENT

CHALLENGES IN THE
BANKING SECTOR
A People Matters and Oracle Point of View
 FOREWORD
Shaakun Khanna, Head of HCM Applications, Asia Pacific

The world of banking is undergoing

disruption. Both in India and the world
over, banks are navigating challenges
due to the rise of digital technologies –
which is having a direct impact on business
models, government regulations and the
expectations of the end customer.

With a range of new technologies including Artificial Intelligence, Machine Learning, Fintech and
Cryptocurrencies transforming the world of work, there are a number of new and emerging talent challenges
that business leaders need to account for.

In this exclusive People Matters – Oracle point of view on “Navigating the challenges of the Banking Sector”, we
study the change in the sector, the underlying drivers and the implications on everyday talent functions that
need re-thinking – right from talent acquisition to performance management.

In addition to the insights, there are three expert views from leading banks in the region on how they are getting
their workforce future ready, how they are planning to attract and retain the right mix of talent and how to deal
with the shortage of digital talent in the financial services sector. We hope this report equips you to reflect on
your own challenges and to ideate on the possible solutions.
 EXPERT YES Bank
On attracting and retaining

PERSPECTIVES: the right mix of talent

Kotak Mahindra Bank

On the shortage of digital
talent

AU Small Finance Bank

On embracing resilient
people practices
INTRODUCTION
It’s been over a decade since the
2008 financial crisis, the challenges
in banking and financial services
have transformed.
Today’s challenges are focused on meeting the expectations of
the modern-day consumer, who is expecting greater
intuitiveness and convenience in their everyday banking
services. Banks are reimagining their business models not only
to attract customers through digitally differentiated
experiences, they are also adapting themselves to new rules in
information, communication, and technology, compelling banks
to relook at the talent pool which can drive a new digital normal.
A TECHNOLOGY-LED
BANKING ERA
Modern-day banking organizations must keep pace with the unprecedented technological
advancement. On the one hand, Robotics, Cloud, Artificial Intelligence, Machine Learning, Fintech, and
Crypto currencies etc. are changing banking-basics. On the other hand, strict regulations, cyber
security, legacy systems, and failure to recognize the digital-potential are emerging challenge areas
that have the potential to limit growth. Here are the top factors that are changing the sector.

Individualized experiences by intelligent customer-targeting based on their individual lifestyles, values, aspirations, etc., data &
advanced analytics, Artificial Intelligence and digital communication platforms such as APIs and chatbots are enabling a high
degree of personalization for segments such as millennials, HNIs, SMEs etc. allowing banks to optimize costs and add more
value.

Open banking networks will be made possible through innovative collaboration networks and platforms, allowing customers
control over their own data. Intuitive APIs allow customers access to extended services, such as third party payment apps or
wallet apps. Banks will have to collaborate with bigtech and fintech firms.

Internet and mobile banking apps and facilities such as identity enabled payment system and unstructured supplementary
service data, not only provide convenience, but give more power to the underbanked society. Cloud computing platforms,
mobile wallets, point of sales instruments, micro-ATMs, internet banking, mobile apps are delivering financial choices in the
hands of such customers.

Cyber security and agile risk management: Technology has a flip side, growing threats of hacking, AI-based attacks etc., pose
a serious threat to the financial world. Banks must therefore invest in security tools and risk management solutions.
TALENT PERSPECTIVES:
TRENDS AND CHANGES
EXPECTED
New capabilities, strategy and mindset
will be in demand in the future. The need
for data scientists, automation experts,
cyber security specialists, governance
personnel is on the rise.

Financial institutions will seek talent that is not just well versed with the
knowledge of banking but also possess industry insights, an
understanding of consumer expectations, and an awareness of the
latest technologies. The banking workforce will also see a huge change
with a demographic shift as the Gen Z and Millennials join the workforce.
Apart from technology skills, banks will also focus on bridging the
soft-skills gap by providing access to continuous learning tools. This calls
for a mindset shift from the traditional way of working to a new culture
that appreciates and embraces digital.
RETHINKING
TALENT STRATEGIES
Banking leaders must re-align the talent management strategy, to stay ahead of the digital curve:

Talent Acquisition Learning & Development Organization Development and

Technology roles are gaining
mainstream attention, with banks
roping in technology professionals.
High hikes, ESOP offerings and
leadership changes are not
uncommon, as banks vie for top talent.
NBFCs and fintech companies are
going as far as to offer equity stake1.
While many banks are looking
outwards for top-notch leaders, the
approach for middle leadership is
different.
Leadership development at every level
is a priority, and banks are proactively
hiring and investing in Millennials and
Gen Z workforce to leverage their high
digital-quotient and high learnability.
70% organizations in a BankDirector
research said their bank has expanded
its internal training programs to
develop younger leaders within the
organization2. Apart from digital skills,
soft skills such as customer-centricity,
critical thinking, problem solving are a
must for frontline banking
professionals. Managers are being
trained to encourage adoption of
new-age work apps and to foster a
mindset of continuous learning and
adaptation to the new-age work ethos.
Culture:
Organizational structures and
processes are being rejigged to
incorporate new ways of working such
as remote, virtual, part-time,
gig-workers etc. Banking organizations
are going hi-tech by incorporating
AI-led global platforms which enhance
the employee experience, giving
impetus to anytime-anywhere-any
device working. Organizations can
expect to cater to the digital demands
of tech-savvy customers only when
their own employees are adept at
using systems which reflect the
digital-reality.

These are some key talent realities that the banking sector is waking up to. A plethora of allied HR processes
are aligning with the new talent paradigm to make digital-commitment an ongoing leadership priority.
BANKING IN THE
Region- wise distribution - India

DIGITAL ERA 27.0%

A SNAPSHOT OF THE TRENDS AND FACTS (37375) 38.8% Urban and Metro Rural
(53808)

Semi-Urban
34.2%
Global bank branches (47443)

India 126337 Source: RBI

Volume of digital payments in the last five years in India

China 95680
(in millions)

25
Colombia 94074 24.13
19.2
20

USA 80331 14.32

15

10.6
Russia 38758 10 8.56
6.99

5
50000 100000 150000

Source: IMF 2013 2014 2015 2016 2017 2018

Source: RBI
 97% 43%
of payment transactions of all bank working
for public sector banks hours can be
are paper based as automated with
compared to 60% for India current About
private sector banks. to become the third technologies 50
largest domestic roles drive
banking sector by
2050 after China 80%
and the US. of business value
in Banking

Banks will need to rely on the power of data to:

Recruit Retain Motivate Promote

(Source: “The Future of Banking” Report by McKinsey, PwC, EY)

HOW TO ATTRACT AND RETAIN
THE RIGHT MIX OF TALENT?
Deodutta Kurane, CHRO, YES Bank
What is the one big talent
challenge in the era of digital
banking?
Financial institutions today are struggling to
attract and retain top talent. Banks are
working hard to update their legacy systems
and use technology to improve operating
effectiveness and customer experiences. To
enable this, Banks will need significantly
deeper and broader technology expertise
than what they possess today. Emerging
technology applications, particularly
intelligent automation, are already changing
the workforce and are expected to have an
increasingly profound impact in the near
future.
Hence, the biggest challenge facing the
banking industry (and also one of its biggest
governors of success) is the ability to bring in
the right mix of technically skilled people,
integrate them into the business and keep
them engaged enough to be retained. An
equally important and related challenge
would be to inculcate a culture of continuous
learning and upskilling amongst the existing
employees to help them stay relevant in the
digital era.
As financial institutions undergo their digital
transformations, they need to ensure that all
employees are equipped with requisite skills
to effectively apply new technologies and
navigate the changes that will result. Also,
Banks will have to fight for skilled people not
only with their traditional sector rivals but
also against a new wave of competition from
technology giants and start-ups.
How is your company solving
this above challenge?
At YES BANK, we make every effort to
understand future talent requirements and
then fine-tune our strategies accordingly.
It has been our constant endeavor to analyze
talent gaps and develop a plan to plug these
gaps. It is a known fact that technology and
broader trends are reshaping our workforces.
Technologies such as robotic process
automation, machine learning and adaptive
intelligence are already beginning to have a
significant impact. In this dynamic scenario,
our main recruitment and training focus is on
equipping the Bank with employees with
requisite skillsets to effectively leverage these
technologies.
Also, it is estimated that a smaller number of
key roles will drive a majority of the bank’s
business value in the future. We ensure that
these key roles are identified based on data
analytics and information rather than by
traditional hierarchy. Then, we match the best
performers to these roles and actively
manage their continuous development.
We base our decisions extensively on the
power of data and technology to Recruit,
Retain, Motivate and Promote. Some of the
initiatives that we have implemented to
recruit and manage our talent include:
YES Talent Radar: An Artificial Intelligence (AI)
powered tool that uses Natural Language
Processing (NLP) and Deep Learning
algorithms to increase recruitment efficiency
and accuracy.
Taleo – An online hiring tool that makes the
hiring process completely paperless from
Candidate Registration to New Hire
Onboarding, Post Hire Background
Verification and Analytics & Reports for Better
Decision Making.
Fusion: An HRMS application used for the
automation of payroll file extracts with no
manual intervention. Our HR operations have
completely moved to being paperless in
terms of maintaining employee records,
Leave management & Full & Final Settlement
outputs.
My Learning@ YES: An AI enable Learning
Experience Platform that helps our
employees acquire cutting edge knowledge
through a predictive recommendation
journey model.
By actively implementing initiatives like these,
we constantly endeavor to enable our
employees with a fulfilling work experience.
What steps does the industry
need to take to address this
talent challenge?
Studies indicate that 62% of senior leaders in
the banking industry believe that there is a
digital talent gap and the demand for such
candidates has been widening in recent
years. As the needs of banks change, they
must sharpen their focus on recruiting people
with specific technology expertise.
In addition, given that retention of employees
is increasingly valuable, Banks will need to
have a different mindset in the way they treat
employees. It is not just money that today’s
talent is after—it is meaningful work, flexible
methodologies (like letting them work in
smaller groups and across groups), and
being challenged by working with more agile
teams.
The question is not whether Banks can hire all
the digital people that want to work in our
industry. The question is whether we can
attract the people to transform these
businesses at a rapid rate, and those are
actually very different skillsets.
While every bank is promoting its innovation
efforts, and may have interesting problems to
solve, few have demonstrated that they can
effectively integrate those efforts into their
organization. They must ensure that they can
develop a vision and then take that vision
and turn it into a set of initiatives that can be
acted upon.
Banks must focus on three primary areas to
address the talent challenge:
1.Prepare for technology driven disruptions
that could require widespread reskilling
2.Identify the skills and expertise needed to
compete in the future
3.Attract and retain talent with those key
skills.
Overcoming the talent challenge also
requires a leadership mindset change since
establishing an environment that is receptive
to new ways of thinking starts with the tone of
the leadership at the top. “In a calm sea,
every ship has a good captain”. Banking
needs leaders who have a strategy to deal
with the change agenda as well as the vision
and ability to drive transformation and
manage the change effectively.
Banking leaders today need to demonstrate
ambidextrous leadership to lead the core
business while also thinking about innovation
and how the world is transforming.
Management of Human Capital will be a top
challenge and to keep up with rapid change,
Banks will need to bring HR to the forefront –
or risk being left behind.
THE SHORTAGE OF DIGITAL
TALENT IN FINANCIAL SERVICES
Sukhjit Pasricha, Group CHRO, Kotak Mahindra Bank
The advent of disruptive technologies, coupled with
ever-rising consumer expectations, the growth of the
fintech sector and a tightening regulatory landscape,
means that the recruitment and retention of quality digital
talent has emerged as a key strategic challenge in the
financial services industry.
This shortage of digital talent arises, firstly, from a
fragmented digital approach that does not prioritize digital
transformation as an organization-wide strategy. This is
further compounded by the lack of a long-term vision,
wherein digital initiatives are implemented on a
project-to-project basis to fulfill near-term milestones, and
not integrated with a comprehensive roadmap for the
future. Lastly, a lack of investment in upskilling employees
diminishes an organization’s competitive edge over the
years.
According to a recent study by Accenture, Realizing the Full
Value of AI, 54% of banking executives state that the
widening skill gap is the primary factor influencing their
workforce strategies, but only 3% of them plan to significantly
increase their investment in reskilling over the next three
years.
Furthermore, as financial institutions invest in
state-of-the-art technology to improve operational
effectiveness, they compete for digital talent with the
new-age tech giants that may be perceived as more
technologically savvy by the millennial population, thereby
necessitating a focused approach towards cultivating digital
talent from within.
Hence, the emergence of a younger workforce with new
skillsets in the digital age means that even banks must not
only customize their recruitment and retention strategies,
but also invest in enhancing their brand image to be
perceived as an employer of choice.

BANKS MUST EMBRACE
RESILIENT PEOPLE PRACTICES
AND DYNAMIC PLATFORMS
Sai Suryanarayana, Chief of Human Resources,
AU Small Finance Bank Limited
The tumultuous changes taking place all around are going
to place unprecedented demands on all of us.
There have been multiple discussions on the challenges in
the era of digital space and while this is the need of the hour
undoubtedly, Banks are gearing up to set new benchmarks
in the area of digital. HR Leaders are constantly making
untiring efforts to be digital; and not just to do digital. Digital
technologies and its applications are expected to have an
increasingly profound impact across people initiatives.
There is no “one” single talent challenge; however, it is a
combination of several pointers. Organizations are
constantly looking for newer approaches to tap talent.
Banks must embrace new and dynamic platforms and
people practices that are resilient to the shifting priorities.
Structures have become more agile. It is imperative to have
employees with multi-disciplinary skills, networked together
to go for the stretch targets and remain agile with a sharp
focus on Impact. In a nutshell, SPEED + SCALE + DIGITAL
TECHNOLOGY = IMPACT.
The topmost priority is to provide employees with
experiences that can enable a collaborative and result
oriented philosophy. Leaders must Inspire and become
challengers and create similar environment in their teams.
Data needs to be leveraged to drive insights for objective
decision making.
Industry focus areas for the future should include:
Trainings need to be relooked for better focus
Business and organization acumen, Re-skilling and focus on
internal mobility for wider exposure will enable employees for
higher levels of performance.
Flat structures, skill enhancement and periodic surveys to get a
pulse from Employees needs to be further strengthened.
Partnerships and relationship building skills will be the new
paradigm.
Our Small Finance Bank is at a nascent stage, having started
Operations in April 2017; but we are well prepared on the
digital front. Being a new-age differentiated Bank, AU
recognizes the importance of digital for providing customer
centric and quality services at optimized costs. Leaders are
gearing themselves for digital readiness & critical thinking
towards institution building. Alternate modes of acquiring
talent using social media etc. have been quite positive.
Rewards & Recognitions (R&R) are an important initiative of
people practices that enables our leaders to appreciate and
drive desired behaviors and results. We devote significant
time on L&D and equip Employees with multi- disciplinary
knowledge – to enable them to do more with less.
Appendix:

1. https://www.financialexpress.com/industry/banking-finance/digital-push-banks-woo-it-talent-with-fat-paychecks/1555113/

2. https://talentorganizationblog.accenture.com/financialservices/talent-management-crossroads-for-banks-top-three-hr-
trends-to-watch