Banks need to upskill and adopt a “hiring for potential” mindset as part of their digital transformation journey, according to a new report by Eightfold AI (Artificial Intelligence).
The new Eightfold Talent Insights Report ‘How Banks Can Become Future Ready’, identifies that to be successful, banks’ digital transformations should focus on three principal areas: technology and processes, culture, and talent.
The report outlines that, according to the Harvard Business Review, 78% of transformations fail, often due to a lack of attention to the critical role of culture and talent.
Eightfold AI finds that by analyzing who has the potential to learn the most in-demand skills, banks will find that the pool of talent increases sharply.
According to the report, banks tend to fill a job with a job requisition and a job description, and search for candidates from within the industry.
However, it calls on banking institutions to rethink how they calibrate roles to “future-ready” their organizations and compete with FinTechs.
A bank’s IT department may account for up to 15% of its workforce, while at a FinTech, an IT department could exceed 55% of the workforce, the report finds.
Meanwhile, front office functions, like sales and the support operations, are typically much larger at banks versus FinTechs.
The report recognises that banks have made “significant strides” in meeting the digital demands of customers, but says the industry “continues to face challenges when establishing digital-first talent strategies”, given that only 15% of the top in-demand skills are currently being employed within their IT workforces.
Kamal Ahluwalia, president of Eightfold AI, says: "Considering the role that banks will play in a global economic recovery, they must become more diverse and draw from a larger pool of talent to continue their momentum. They are now competing with entire ecosystems of tech organizations for the same pool of talent.”
"Future-thinking institutions must scale their investments in talent in order to maintain their strategic advantage,” adds Ahluwalia.
A report published earlier this year by Information Services Group revealed that banks are embracing digital services as they seek to compete with the FinTech industry and improve customer service.
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