Now, more than ever, Banking must proactively assess its future workforce needs
Banking is an industry ripe for automation and because of these automation possibilities, many people fear a large decrease in the number of banking jobs. But it’s not so much that jobs will vanish through automation. It’s more that certain tasks will disappear freeing up employees to work on improving customer service and investing in new capabilities. Just like the manufacturing industry, the banking industry is seeing the need to “skill up” its employee base. Systematically planning for these needs is a classic application of strategic workforce planning.
Automation in banking is not as simple as it appears, so the pace of change will not be as rapid as people think. A few years ago, McKinsey reported that a large universal bank took a detailed look at its processes to assess the opportunities for automation. The bank categorized more than 900 end-to-end processes into three states: fully automated, partially automated, and “lean” manual. At the time, less than 50 percent of these processes were automated in any way. They projected that an ideal level of automation would relieve 50 percent of their employees in operations of their current back-office tasks.
While the automation sounded promising, McKinsey had this to report:
… achieving it is easier said than done. This bank did some due diligence to determine whether there was a viable business case to automate each process within a reasonable time frame. It concluded that only half the opportunity (measured by the automation business cases completed on each manual process) could actually be captured.
So, while large quantities of automation are theoretically possible, it doesn’t always make good business sense to move forward with these opportunities. In this regard, the impact of automation on the workforce is greatly reduced.
In an August 2016 article , Business Insider interviewed leaders from companies like Bank of America, IBM, PWC, MoneyLion and Techstar about the impact of automation on the banking workforce. Each one shares similar views, specifically that the focus of automation is on eliminating mundane tasks to free up banking personnel to:
Improve customer service
Provide services that are more customized and personalized
Provide coaching and mentoring services
It is highly likely that banks already know which processes they will automate next and when. Therefore, some of the background information from these technology transition plans can be used to assess the impact of automation on certain job roles. Which roles will be fully automated? Which roles will be partially automated?
Once that is determined, banks can work on assessing whether the staff in the automated roles can be retrained for new role. While it may seem simpler to downsize staff in fully-automated roles, many of these employees already have strong relationships with existing customers. It is worth the time to determine potential training plans to migrate these employees into other roles which can leverage these customer relationships.
Planning your future workforce takes time, effort and a great deal of thought. It requires gathering experts from multiple business areas to determine the true impact of changing technology and then determining how you should address the impacted workforce.
By aligning a workforce planning project with your technology transition plans and reimagining the new computer-employee interface in impacted jobs, banks can better prepare for a world where people and machines interact. In this way, banks have a much better chance of obtaining their goals of better customer service and customized service.
Traversing this path isn’t easy. The sooner the banking industry begins planning, the less detrimental impact there will be for everyone, especially for those employees whose jobs will be impacted by automation.
 Dias, Joao et al. Automating the Banks Back Office, Digital McKinsey, July 2012.
 Wadhwa, Tina. This is What Might Happen when Robots Take Over Banking, Business Insider, August 2016.
Smith, Tracey. Strategic Workforce Planning: Guidance & Backup Plans. October 2012
Tracey Smith is an internationally recognized business author, speaker and consultant. She is the author of multiple books and hundreds of articles. Tracey has worked with and advised organizations, both well-known and little-known, on how to use data analytics to impact the bottom line and how to conduct strategic workforce planning. If you would like to talk to Tracey about consulting work or speaking engagements, please visit www.numericalinsights.com or contact Tracey Smith through LinkedIn. You can check out her books on her Amazon Author Page.