Aug 12 2020

Digital Transformation Presents New Talent Shortages for Banks

As financial firms make the shift to digital-first services, talent gaps have occurred. How do banks bridge the gap and deliver on transformative process potential?

To meet emerging client expectations, banks must embrace the need for digital transformation at scale. Current conditions are partially responsible for this shift: As noted by the J.D. Power 2020 U.S. Retail Banking Satisfaction Survey, banks must find a way to engage the 52 percent of clients still classified as “branch dependent,” but who are no longer willing (or able) to attend branches in person. According to another recent survey, meanwhile, 43 percent of firms are now focused on leveraging Big Data, artificial intelligence and cognitive computing to improve banking processes and customer satisfaction.

As noted by research firm Gartner, however, there’s a growing transformation disconnect: talent. While banks report an increased need for financial data analysts and technology innovation experts to drive digital deployments, 80 percent of banking CEOs cite emerging skill shortages as the biggest threat to effective IT innovation.

What’s driving this growing talent gap? How can banks attract IT experts to improve digital outcomes — and what’s the alternative if they can’t secure skilled staff?

Digital Transformation in the New Normal

Financial firms aren’t the only ones struggling with the lack of available technology talent. The cross-industry demand for cybersecurity professionals is considerable, according to Security magazine. The need for infosec expertise is now twice as great as supply, and the gap continues to grow.

Thanks to the evolving impact of COVID-19, meanwhile, digital job capacity is rapidly increasing as primarily in-person businesses such as banks, insurance agencies and even medical providers make the shift to online, on-demand services. In fact, recent data from Microsoft suggests a worldwide digital job capacity of 51 million by 2021 — but accelerated need doesn’t automatically translate to an uptick in available talent.

With 75 percent of banking executives now convinced that deploying digital technologies will separate top-performing firms from the competition within the next three years, it’s no surprise that existing expert outlooks are a cause of great concern.

What Banks Can Do to Attract Expertise

When it comes to shoring up staff skill sets and expanding digital impact, three strategies can help banks succeed:

  • Support from senior managementAs noted by Forbes, one of the biggest barriers to financial digital transformation is a lack of buy-in from organizational leaders, and the same holds true for talent recruiting. Attracting the best in the business starts at the top by prioritizing the autonomy and assets IT pros will require to fundamentally transform current frameworks.
  • Problem-solving potentialRecent survey data found that top priorities for skilled tech talent include growth potential and the presence of interesting problems to solve. Capturing IT interest means highlighting opportunities rather than obligations.
  • In-house talent upskillingIt’s also possible for banks to bolster tech skill by improving current staff education. According to ZDNet, this is now common practice for many companies, as 38 percent of CIOs are spending on in-house IT education, up from just 20 percent late last year.

MORE FROM BIZTECH: Ready or not, financial services must embrace digital.

How to Modernize Without Staff

Despite best efforts, banks may still find themselves struggling to solve skill gaps and drive digital growth. In such cases, it’s worth considering managed IT services, which can help firms modernize without boosting their payroll. Managed services may include:

  • Comprehensive security assessments — Where are current infosec practices working as intended? Where do they need improvement? Security assessments can help focus spending without the need for increased staffing.
  • IT infrastructure consulting — Every bank has unique digital transformation needs and priorities. Professional IT infrastructure consulting can both highlight current process improvements and suggest specific technologies to streamline digital initiatives.
  • Physical framework support — Banks can’t ignore the need for in-branch technology as part of end-to-end customer satisfaction. From digital signage to self-service kiosks and videoconferencing solutions, the right in-situ infrastructure can help mitigate the need for skilled IT manpower.

Digital transformation drives both banking innovation and customer satisfaction, while the growing talent gap fuels financial frustration. But it’s not all bad news — banks can solve for skill shortages by targeting professional priorities, upskilling current staff and adopting digital best practices with strategic provider partnerships.

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