The “Future of Work” in Banking Is Right Around the Corner
April 19, 2021
By: Paul Schaus
Faced with the pandemic’s sudden economic challenges and rapid shifts in customer demand, banks have turned to automation technologies like chatbots and robotic process automation (RPA). Many, for instance, utilized RPA to speed up processing when they were inundated with PPP loan applications earlier this year. Massive jumps in call center volumes also led some, including TD Bank, to adopt call center automation and chatbot solutions.
This may have been driven by sudden circumstances, but it’s not likely to slow down any time soon. Automating routine processes will continue to be high on leaders’ agendas for the foreseeable future. Automation capabilities provide speed and cost efficiencies that will be crucial as banks maneuver through uncertain market conditions into a post-COVID world.
Growing reliance on automation will also have significant workforce implications. It will accelerate the oft-discussed “Future of Work,” in which machines take on an increasingly significant role in handling tasks traditionally performed by employees, such as data entry, forms processing, events monitoring, and resolving customer queries. This will trigger a fundamental shift in the skills banks will need, the tasks their employees will perform day-to-day, and how they will perform them.
That shift was already in its early stages before the pandemic. Banks had previously reported a growing digital skills gap that threatened their ability to succeed in the future. With automation swiftly taking center stage amidst the pandemic, this “Future of Work” will arrive sooner than previously thought, making workforce transformation an urgent priority throughout the industry.
Many banks are still unprepared for this transformation though. In one survey conducted after the onset of the pandemic, 72 percent of industry executives reported a moderate or significant digital skills gap in their organization. However, 75 percent of them said they had made little or no progress in closing that gap by reskilling and upskilling employees for the digital world. Only three percent reported significant progress in this area.
To kickstart this transformation, banks will need to identify where they must foster new skills among their workers. That will require an understanding of what skills will be in high demand and won’t be made redundant by automation that will increasingly handle repetitive work like data entry, processing, and analysis; events monitoring and reporting; and responding to simple customer queries like checking balances. Banco Santander is one institution that already embarked on such a large-scale workforce planning exercise to identify what skills it would need to cultivate among employees to succeed in 2025.
As automation increasingly tackles repetitive work, banks will need to devote human resources to more creative and customer-facing work. That will include innovating new products, services, and business models, as well as building closer relationships with priority customers. Experts also point out that the growing role of technology will generate demand for new skills in areas like AI platform support, data science, solution architecture, and cybersecurity.
Banks will need to invest heavily in training programs to upskill employees for such work and close the aforementioned digital skills gap. Even tech giants often considered the leaders in digital business are investing in such programs. Amazon announced it will invest $700 million in training 100,000 workers in technical skills expected to be in-demand in the future.
Improving internal mobility to make it easier for employees to move into new internal roles should be a top priority. Banks are already getting some practice during the pandemic, converting employees to new roles in response to changing customer needs and behaviors. Bank of America, for example, moved 3,000 employees to call center customer support to handle higher volumes.
Additionally, banks will need to reskill and upskill employees to work hand-in-hand with automation technologies. Banks that maximize the potential of humans and machines to work together and boost each other’s productivity will get the most from their investments in both.
For example, call center automation capabilities can handle large volumes of simple, routine interactions, allowing agents to devote more time and attention to handling exceptions and complex requests to customers’ satisfaction. And automation self-service capabilities can help wealth management customers easily onboard themselves, minimizing administrative work for financial advisors so they can instead focus on building relationships.
Getting the people part right in these human-plus-machine instances is just as important as delivering the technology components. Banks should plan to invest accordingly when rolling out automation capabilities. Morgan Stanley invested in reskilling 16,000 financial advisors to utilize a machine learning system that generates recommendations for client investments, alerts on market activity that advisors can personalize and share with clients, and automated advice related to major life events like a diagnosis of a severe illness in one’s family. Advisors can review these recommendations and make the call on which might be appropriate for specific clients.
COVID is widely expected to accelerate the growth of digital technologies in banking. Automation will be a key enabler of the speed and efficiency required to operate in an even more digital world. Banks that invest in workforce transformation to complement their automation efforts will be best positioned to compete in this environment.
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