Implementing emerging technologies into businesses has not only transposed the conventional processes, systems, and operations but has also revolutionized the overall workforce strategy of most industries. The financial services industry is no different. Digital transformation in financial services is not just about technology upgrades; it has become a major business imperative.
Fueled by cutting-edge digital tools and technologies, banks and other financial companies have progressed from paperwork-laden processes to digital applications. Besides replacing traditional systems with digitally-led components to elevate customer experience, the companies have driven drastic transformations in their workforce models, giving rise to digitally empowered teams.This article will help you understand the major digital transformation trends driving innovation in the financial services industry’s workforce model. It will then discuss the benefits of fintech workforce transformation, the challenges associated with it, and the best practices for driving the transformation.
As Artificial Intelligence (AI) has popped up in the financial services industry, banks and financial institutions face the ease and convenience of automating human-led administrative and operational tasks and processes. This consumes less time and effort and decreases the chances of manual errors, leading to operational efficiencies.
From customer profiling to cybersecurity and fraud detection, big data analytics has stimulated every sphere of banking and financial operations. It helps banks identify and assess the expenditure patterns of customers, the nature of their transactions, and other essential factors, thus allowing them to offer differentiated services to customers and make proper lending decisions.
The COVID-19 pandemic has enormously distorted the traditional workforce models, thereby promoting a digital culture in every industry, including banking and finance. By exploiting digital tools for communication and collaboration, companies can now efficiently carry out their day-to-day operations with virtual teams. Thus, technologies have assisted employers in taking up a flexible leadership approach and holding up work-from-anywhere norms.
With millennials and Gen Z venturing into the financial services industry, there has been a large-scale shift in workforce demographics. Younger individuals tend to be technologically proficient and demand flexibility. Their skills, competencies, and ways of working greatly differ from those of the aging workforce.
The digital transformation in financial services offers a number of benefits to the workforce. These are:
Improved efficiency and productivity due to the automation of routine and repetitive tasks.
Seamless communication and collaboration among diverse team members due to the use of virtual tools and platforms.
Increased opportunities for employees to become more skilled and competent, elevating their creative abilities and innovative ideas.
Motivated workforce with an increased sense of morale due to a continuous culture of learning and innovation.
While the digital transformation in financial services proves to be highly beneficial for employers as well as employees, there are certain challenges that need to be addressed. These are:
Skill shortages and learning gaps: The drastic pace of technological advancements in the dynamic business environment coupled with the aging workforce results in deficiencies in skills and knowledge required for digital transformation. Besides that, there may be learning and development gaps in the existing workforce of financial service companies, leading to a barrier to transformation.
Improper planning and resource allocation: Efficient use of digital tools can turn out to be costly in the absence of careful planning and optimal resource allocation.
Resistance to change: When companies attempt to support technological innovations and bring a change in their business practices, existing employees usually oppose the change if they do not have the desired skills and knowledge.
Risks related to data security and privacy: Digital transformation in financial services requires implementing a powerful cybersecurity infrastructure. The reliance on digital platforms and applications makes companies vulnerable to data breaches.
It cannot be denied that human resources are the pilots of driving transformation, and as such, banks and other financial institutions must deploy a digitally empowered workforce led by tech-savvy leaders. Here are the steps that financial service providers can take to establish a full-fledged digital-savvy workforce.
Firstly, financial sector companies need to evaluate their existing teams’ capabilities and competencies. This will help them identify and fill skill and knowledge gaps by hiring the right individuals. It is equally important to demonstrate the digital transformation goals and objectives and ensure they are consistent with the company’s mission and business objectives.
Besides communicating about the changes in business processes and practices that might occur due to digital transformation, financial service companies must spend adequate time and money in designing and implementing upskilling and reskilling programs. They should also encourage peer learning, on-demand training, and mentorship programs.
Financial institutions must communicate with and keep every team member informed about technological transformations or changes in business processes that are planned, whether they involve permanent employees or contractual staff. The employees should also be provided with regular feedback on their performance throughout the change management process.
One of the best ways to fill the skill and learning gaps in a company’s existing workforce is to integrate them with contingent staff hired on a contractual basis. Contingent staffing comes with many benefits that can help banks and other financial institutions maximize their business potential.
Contingent workers may be independent freelancers or temporary staff hired through a staffing agency. A specialized staffing agency like Denken Solutions holds a vast network of pre-screened, skilled, and diverse candidates who might be the right fit for navigating digital transformation in financial services. By entrusting the responsibilities of screening, sourcing, onboarding, and training potential candidates to staffing agencies, financial service companies can save time and costs and divert their focus to other major business processes.
This article concludes that the digital transformation trends driving innovation and change in the workforce strategies of financial service providers are the emergence of Artificial Intelligence, big data analytics, virtual teams, work-from-anywhere norms, and transformation in workforce demographics. Digital transformation in financial services delivers certain benefits, including improved productivity and efficiency, enhanced communication and collaboration in teams, and empowerment and motivation of employees. However, there are some challenges that companies ought to consider while undertaking digital transformation, which are deficiencies in skills and knowledge, improper planning and resource allocation, resistance to change, and cybersecurity risks.
The deployment of a digital-savvy workforce is essential to mitigate the challenges associated with digital transformation in financial services and boost operational efficiency. Banks and other financial service providers are recommended to establish a robust and clear digital transformation strategy, encourage a culture of continuous learning and innovation, maintain transparency in communication, and switch to contingent staffing solutions.
You need the right strategy and technology system to develop and manage a digital-savvy workforce with contingent workers. Denken Solutions can offer you the much-needed support to ensure that you successfully establish and manage a strong contingent workforce that drives innovation and change in your organization.
Talk to us for further information.