Banking on change: the people, skills and teams needed to deliver the financial services of the future

Across Europe, banks are struggling to meet the ever-growing expectations of their customers. Consumers today manage their lives on their smartphones. They expect a flawless online interface, underpinned by flexible access to knowledgeable advisers. It’s a wish-list that too few banks can fulfil.

In Britain alone, more than half a million current account holders complained to regulators in the first half of 2022, marginally up on the previous half, despite banks’ efforts to improve their digital services.

The financial crisis of 2008-10 triggered an extraordinary period of ultra-low and even negative interest rates. Driven to wafer-thin margins between rates paid to savers and those charged on loans to borrowers, retail banks raced to cut costs, reducing branch networks and staff, and moving services online. With mixed results.

The roll-out of online services was often hampered by disjointed and clunky legacy systems. Agile, digital-only neobanks exploited this vulnerability and started to seize market share, building tailored low-cost, transaction-based systems.

Yet, despite being used by one Briton in five, neobanks are rarely profitable. That is because many customers use both neo and traditional banks. They keep a traditional retail bank account for important transactions – paying bills, mortgage borrowing, rents and salaries – and use neobanks for everyday purchases and travel. This split deprives retail banks of valuable data about customer lifestyles and habits.

To deal with both poor customer satisfaction and neobank competition, traditional banks need to retain, recruit and train enough high-quality staff to meet the heightened expectations of their customers.

On the one hand, they need personable customer advisers, expert in the bank’s products and evolving market conditions, to guide clients through critical moments in their financial lives, such as setting up a home, starting a business, marriage, divorce and inheritance.

On the other, now that customers have acquired an online-first reflex, banks are in desperate need of highly skilled digital specialists to design, pilot and maintain customer-focused digital services that will work as intuitively and smoothly as those of online retailers, while remaining as secure as the Bank of England itself.

These two kinds of specialists must be backed in turn by staff, at every level and in every role throughout the organisation, who understand that the success of financial institutions – and deposit takers in particular – depends upon trust, and that their actions either build or destroy it.

Success will be down to having the right people, with the right skills, to make both online and offline services effective and competitive.

How can financial institutions ensure they:

• Have the right digital specialists driving their digital transformation?
• Focus relentlessly on customer satisfaction in a hybrid world?
• Attract or train the tech talent they need in a red-hot market for those with digital skills?

Driving digital transformation

Banks are running their digital services on a hotch-potch of legacy systems that struggle to interact effectively and cause frequent problems for customers. Some digital technicians might enjoy the challenge, but many would prefer to work on more rewarding, future-focused systems elsewhere.

To move from batch-processing to real-time transactions is going to require big investment in state-of-the art systems – and people with the skills to set them up, maintain them and develop new services on them.

Artificial intelligence, robotics and other emerging technologies are enabling automation of increasingly complex tasks. Robo-advisers, automated fraud checks and network monitoring are becoming the norm.

Banks will require different kinds of staff: digitally adept, with a mindset favouring continuous learning, strong cross-functional skills, creative thinking and problem-solving abilities.

Achieving customer satisfaction in a hybrid world

To stem the encroachment of digital-only banks and woo back customers, retail banks must develop teams driven by enthusiasm for solving customer issues. This demands empathy and understanding, creative thinking, a willingness to innovate, knowledge of possible technical solutions and even entrepreneurial skills.

Few individuals combine all these qualities, so banks must assemble teams that bring together varied skillsets, that also reflect the diversity of their customers and understand their behaviour. A rounded team will be of all ages and of different ethnic and cultural backgrounds but will share a desire to be the best at what they do.

The digital team must build a flawless online system that is easy to navigate and enables customers to achieve their aims. That must be backed by employees who can help customers find their way around it and solve their problems when they can’t or need services that are not available online. These advisers must be easily accessible, with flexible contact options to meet individual customer needs.

Hiring or training the right people amid the war for talent

To compete effectively for non-traditional talent, firms must dramatically change their employee value proposition (EVP) to match those of leading technology firms. Millennials say they are more motivated by a sense of pride and purpose than by money, so banks should keep this search for meaning front-of-mind when creating packages designed to attract this generation.

Our 2022 report, The People Experience Advantage, supports this and also finds that the key to retaining talent is to address challenges around career progression and skills development, as well as ensuring effective communication channels and robust relationships with leadership.

Companies must demonstrate their values, their belief in diversity and inclusion, a digital-first approach, open communication and flexibility, and contribution to society. Today’s employees need to feel aligned with their organisations, they want to be challenged, have their efforts recognised and have portfolio careers shaped by their own choices. Businesses need to understand the motivations of younger employees and set out their stall to attract able people based on shared values.

“The consequences of an extended pandemic loom large over the industry and retaining talent has become one of the biggest priorities for financial services firms. The ‘Great Resignation’ saw millions of workers quit their jobs every month in 2022. We must counteract this trend by placing a focus on employee wellbeing and technology-centric value propositions.” (Desré Sheen, Vice-President and UK Head of Financial Services, Capgemini Invent)

The time to act is now. The ongoing recovery in bank profitability, enabled by rising interest rates, at last gives financial institutions the headroom to invest in upskilling and reskilling their workforce. They must take it.

• https://www.fca.org.uk/data/complaints-data
• https://fintechmagazine.com/venture-capital/why-one-five-uk-consumers-are-now-using-challenger-banks
• https://www.forbes.com/sites/tomgroenfeldt/2022/05/19/neobanks-are-plentiful-but-rarely-profitable/
• https://fintechmagazine.com/venture-capital/why-one-five-uk-consumers-are-now-using-challenger-banks