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The conundrum of banks and bankers in the 21st century

The conundrum of banks and bankers in the 21st century

By CNBCTV18.com Contributor Dec 9, 2021 5:42 PM IST (Updated)

Consumers' growing desire for convenience and hence the increasing access of financial services through digital channels has led to a surge in new banking technologies that are today reengineering the banking industry.

Two of the biggest challenges and envisioned changes among the mega trends in banking are—‘the new-age banking experience’ and ‘technology across devices’.

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Bank’s conundrum
The late nineties and early tens saw banks attempting to transform branches along the lines of the hospitality ambience, with the aim of providing a sophisticated and welcoming banking experience to its valued customers. But a decade later, banks are all at once forced to re-examine their banking experience proposition. They are now to give it a completely new dimension—one that appeals to the sensibilities of the millennials and Gen-Zers who view technology as something very essential and touching every aspect of their lives.
Consumers' growing desire for convenience and hence the increasing access of financial services through digital channels has led to a surge in new banking technologies that are today reengineering the banking industry. Surveys indicate that nearly 85 percent of respondents identify mobile banking as the primary mode of accessing their bank account. It is their go-to platform to make deposits, account transfers, monitor their spending and earnings.
Mobile banking is also a key differentiator service for banking leaders.
The growing emphasis on technology and customer experience is resulting in traditional hierarchy roles getting dismantled, and talent will need to be moved to roles based on data to drive business value.
In order to cater to millennials and Gen-Zers, who will dominate the new banking customer base, banks will need to retransform their branch as well as electronic experience. As the growth in branch network shrinks, the existing branches could undergo a transformation to look more like tech product stores of Apple, or even clone some tech campuses to win over the new-age tech loving customers.
So, does it mean that we will start seeing less of formal, tightlipped, suited environments and more of informal campus-like ambience and approaches?
Bankers’ conundrum
Bankers of the past lived in happy times. Equipped with sophisticated jargons and a preordained position of repute, the bankers were the second most admired professionals—yes, right after doctors! But the roaring digital transformation wagon has jolted the fraternity out of their hammocks.
They are now forced to upskill in order to keep up with their new-age customers, who are tech savvy and impatient. As a matter of fact, bank staff whose roles are transaction-based could soon find themselves staring into an uncertain future, if they choose not to reskill and upgrade for the new normal.
Customer relationship and satisfaction were the cornerstones of banks, just like the hospitality industry. Banks invested huge resources in terms of money, time and effort to differentiate themselves from their competitors and consolidate a distinct positioning. Talent hunting too placed increasing emphasis on soft skills—considered prerequisites to engage and retain customers, and acquire new ones.
However, things have changed. In the last five years, innovation has spurred rapid changes in the banking industry. As processes become further automated and digital, banks will need to fundamentally change how they manage/shift existing talent and acquire new ones. Requirements are shifting from basic cognitive skills to socio-emotional and technological skills. From identified abilities such as relationship management and administrative, the focus has shifted to a newer set of skills such as customer experience, collaboration, cost excellence mindset, and more. These new skills are becoming increasingly imperative, given that work attributed to 43% of bank’s working hours can be automated.
In this new world of bank jobs, people with digital skills are heading straight to the top of the hiring pile. This is only reflective of the speed of digital adoption by customers in the current times. ANZ's recent promotion of its Data Chief, Emma Gray to the executive leadership team is clearly a case in point. Tech and data skills will continue to be highly sought after.
In the new normal, the baton will pass from customer relationship managers—the original showstoppers—to product officers; and chief product officers might soon find themselves elevated to the corner offices. Today's product officers may not be extremely focused on pushing products out faster. But in the future, they will take centre stage as being the futurists. They will need to create new ways for customers to consume products in several ways that bring the 'entire bank' to the customer, either through digital, relationship management, or bundling and cross selling.
The nature of banking roles in institutional, retail and small business is also likely to shift. Rather than simply reacting to customers' needs and offering products, relationship bankers will need to be able to identify what type of information and insights could benefit a customer, and work with data analysts to produce the relevant data.
Hence, enter data analysts, data scientists, algorithm designers who create the data, ensuring it meets regulatory and customer needs; data translators who are the go-between for the data specialists and other parts of the bank, including relationship bankers, call centers, and product teams.
Let’s not forget, the other roles likely to be in high demand are user experience (UX) specialists and customer experience (CX) designers, who understand how websites and apps should be presented to customers, and behavioral scientists, who can provide insights into how customers will behave under certain circumstances. Some experts argue all companies, including banks, will increasingly move towards "agile" working, where teams are formed on a short-term basis to solve a problem or develop a new product or solution. That will be something to really look forward to!
Change is the only constant
The new environment of change demands a fresh approach. Themes like built vs. platforms or plug and play as well as diverse skills vs specialization are expected to intensify going forward. The change is here and so is an opportunity to transform into a more relatable, accessible and always on solution – which banking is fast evolving to be in this age of tech.
The author, Neeraj Sinha is the Head - Retail & Consumer Bank at SBM Bank (India). The views expressed are personal.
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