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The financial services industry has always been impacted by legacy technologies and skills gaps. According to a 2020 World Economic Forum report, 74 percent of companies are unable to find the right skills in the local labour market, and 43 percent report skills gaps in their present leadership teams. While top players in the industry like JPMorgan Chase have identified and invested in the need for reskilling, the majority of companies are still to take action.
Evolving customer habits, cost-related pressures and shifting regulatory policies are the major drivers of this skills gap in the industry. In 2020, the COVID-19 pandemic has only added to the list. Customer habits are changing, employees are being recognised as stakeholders, and governance, risk and compliance impacts due to the pandemic have added pressure to adapt to new rules of doing business within weeks. In the process, a growing proportion of existing roles are being rendered obsolete. Yet, new skill-sets and rapid digital transformation initiatives offer potential to replace legacy ways of doing work with greater agility, efficiency and resilience – and at lower costs.
New skills for tomorrow’s workforce
The need for digital transformation in financial services is being rightly acknowledged, but one of the biggest challenges in transformation initiatives is skills gaps in the current workforce – gaps that cannot be closed by simply making new hires. It’s therefore vital that transformation happens in sync with organisation-wide upskilling and reskilling initiatives.
So which skills should be prioritised? According to HCL research conducted in collaboration with the University of St. Gallen, the following six areas are shaping the skills profile in financial services employees:
How to synchronise transformation in practice
The urgency of closing these skills gaps and retraining the existing workforce is obvious. However, rather than hindering it, many financial services companies may not realise that technology can be an enabler of this reskilling revolution. Leaders in the finance industry are partnering with technology leaders to identify the right upskilling, reskilling and micro-skilling initiatives that can efficiently close these skills gaps. The problem should be recognised as one of social responsibility, which can be tackled by joining hands with competitors and investing in avenues that can impart key skills to the right people in the existing workforce – both in the short-term and long-term.
Another method to close the skills gap in financial services is augmenting the skill-sets of the current workforce with bootcamps and extended collaboration with top universities. Within organisations, creating team settings that are conducive to the transferral of skills is another effective measure for introducing new skills in the existing workforce.
Ultimately, then, legacy organisations need to realise that not only is technology changing the number and kinds of people working in banks and financial institutions, but the nature of their roles is also changing. While hiring new expertise will be unavoidable during demand spikes and urgent situations, the true value of digital transformation will emerge only when the workforce can run the ‘new machine’ smoothly. Until then, Finance 4.0 will be an aspiration that many companies fail to realise.