Ian Pollari explores how financial institutions can evolve their workforce to enable tech innovation and growth.
No one in financial services is unfamiliar with the disruptive forces shaping the future of the industry. With massive changes in technology, increasing competition on multiple fronts, evolving customer expectations, and ever-greater regulatory demands, financial institutions must walk a careful line between maintaining current services and embracing the technological, cultural and structural innovation that will be required to survive and thrive over the long term.
Just as legacy technology can pose a stumbling block to innovation, so too can legacy talent strategies and mindsets. It has become clear that financial institutions must attract and retain (or develop) a new breed of talent to create the capacity to support scaling their innovation initiatives. Yet how organisations approach this challenge – and the type of talent companies are looking to attract – can vary widely. Companies must engage critically with this reality and implement forward-thinking strategies to position themselves at the forefront of the coming workforce revolution as an employer of choice.
New and evolving technologies are shaping the future of the financial services industry on an unprecedented level. Current activity ranges from investigating specific uses for technologies such as blockchain, through to combining multiple automation technologies such as AI, cognitive and Robotic Process Automation (RPA) into an Intelligent Automation (IA) strategy to solve complex business issues. As organisations investigate potential applications of these and other technologies – and as fintechs, insuretechs and 'hyperscales' make greater inroads into the industry – access to the talent necessary to drive a robust innovation strategy becomes a strategic imperative. As a result, many financial institutions have made it a priority to hire 'top tech talent', competing with the likes of Google and Amazon to attract the best and brightest.
These challenges contribute to some organisations' decisions to create innovation labs in separate offices from the main business. These labs are often located in trendier locations, with more relaxed environments and greater freedom to innovate. However, the results of this innovation culture must ultimately be embedded into the core business as part of long-term transformation.
Despite the need for critical technical skill sets, organisations can focus on technical hiring to the detriment of their overall talent strategy. While much of the current disruptive change is technology-driven, future success in this new paradigm cannot be achieved through deep technical competencies alone.
For example, many financial institutions are seeking to re-imagine their customer experience. The bar for great customer service is being set from outside the industry, often by digital interactions with companies like Netflix, Uber and Airbnb. While using emerging or digital technologies is a critical component of engineering this change, companies also need to look to the skill sets that will help them understand, contextualise and derive greater value from customer interactions. As a result, some financial institutions are seeking everything from data scientists and psychologists who can provide insight into the customer mindset through to sourcing individuals from companies already delivering peak customer service for their 'on the ground' knowledge.
Employee mindset is also a critical success factor. While specific skill sets and competencies can be supported through training, individuals who lack a 'change mindset' can hold an organisation back, regardless of what appears on their resume. Financial institutions should place a priority on attracting, hiring and retaining individuals who are agile, adaptable and eager to learn, regardless of their role.
The shift in the workforce toward newer skills and approaches must also be carefully balanced against the needs of the traditional business. Many current advancements involve finding ways to digitise and streamline traditional financial services, such as creating a simple online mortgage application process or providing a hybrid wealth management solution for low-value portfolios.
At the same time, traditional lines of business – and their associated core skill sets – must be maintained. While innovation is critical, it is equally important not to miss out on hires that possess industry-relevant skills in accounting, asset management, risk assessment and underwriting. For some organisations, the ideal strategy for the current market may be to maintain the traditional business while seeking to acquire or partner with a fintech, or set up a separate digital model and workforce to run in parallel.
For financial institutions looking to evolve their workforce and to help facilitate change associated with technology-driven innovation, we recommend:
Financial institutions need to strike a balance not only between the need for technology-driven innovation and maintaining the current business, but also with the evolving needs of employee groups, customers and regulators. Prioritising hiring for a single background or competency area, including tech talent, is challenging. Organisations need to foster an environment where innovation can thrive, for which a talent strategy that focuses on hiring for a growth-oriented mindset, agility and openness to change will be critical to organisations' long-term success. See our interview with Aileen Tan, Chief Human Resources Officer, AIA – Preparing the insurance workforce of the future.