Two and half decades after India embraced economic liberalization, today with a GDP of USD 3 trillion we have emerged as the world’s fifth-largest economy bypassing the UK and France. In Purchasing Power Parity (PPP) terms, India has eclipsed Japan and Germany. Its powerful motors of urbanization, aspiration and wealth generation since 1991 have leveraged its eventual emergence as a mighty economic power.
Elephants in the room: Rich, poor & middle-class
To reach the USD 5 trillion milestones, the Indian Banking, Financial Services, and Insurance (BFSI) sector is playing the role of a catalyst in the country’s economic makeup. With growing household income across T15 and B15 cities and beyond are growing, its affluent middle class is slated to spend ₹335 trillion by 2028, estimates Boston Consulting Group (BCG), a top management consulting firm. India’s rich population which is growing faster than the US, Japan, and China is participating higher than ever in the capital markets. Also, to bring the financial weak to the mainstream and trigger demand, the government has adopted a series of financial inclusion measures. The World Bank’s 2018 Global Findex Database shows that nearly 80 percent of Indians had a bank account at the time of the survey, up from 40 percent in 2011. Despite occasional hiccups and empty inactive accounts, aggregate deposits in 38 crore beneficiary’s accounts stand at 1.15 lakh crore. It has provided a launchpad for enabling financial products transcending banking. To crack the code of this new dawn, a growing set of banks and FIs with a range of solutions are enabling productive credit growth to small and medium businesses from the informal economy.
BFSI keen to hire, But Skill Gap Scarce
To put this economic and financial dynamism in perspective, BFSI in India is valued at Rs. 81 trillion ($ 1.31 trillion) and despite inflation and mild growth is likely to become the fifth-largest in the world by the year 2020 and third-largest by the year 2025. By 2022, the sector will require 27 lakh employees, estimates a study. To acquire, retain, and nurture this sea of demography while enabling them with the digital intervention will be a giant talent management challenge for the sector.
What it means, huge manpower opportunities are set to revolutionize how banks and financial institutes would reengage with society and consumers. From digital payments to P2P lending, instant money transfer to low-cost stock trading, new age interventions have presented banks and financial institutes with a world of new opportunities.
We would need skilled candidates in large numbers, across locations and levels. But the scarce supply of talent coupled with low availability of appropriate skills are proving to be serious constraints. Recruiters routinely complain of graduates gaining the theoretical knowledge at the cost of practical job-related skills. That’s just about the new hires. Reskilling and upskilling are areas making 79% of CEOs worried about their workforce competency, thus states a recent CEO survey by PwC.
And why not. The impact of disruption is knocking traditional BFSI jobs out of the floor. As per a global consulting firm’s 2022 prediction, in India, 25% of today’s jobs will simply vanish, 15%-20% of BFSI workforce will have to migrate to new functions by 2022.
According to the FICCI-Nasscom and EY – Future of Jobs – report, by 2022, 20-25% of existing jobs in banking, financial services, and insurance (BFSI) sector will face an existential threat, while 15-20% of the workforce in the sector would be deployed in new jobs that do not exist today.
Filling the skilling gap: A happy blend of old and emerging curriculum
The need of the hour is to identify and groom a highly-skilled talent pipeline, enroll bank officers into onboarding and induction program, enable digital learning for sales and distribution team, and plugin intensive functional training for mid and senior leadership. We need to develop an agile learning solution to guide banks, NBFCs, and insurance companies through transformation. Within the sector, businesses are not exactly homogeneous and are multidimensional; so to identify the right learning partner that can focus on the delivery of knowledge in both the physical or digital environment is critical. An industry-leading education partner should be able to generate required RoI for its L&D efforts. While some fundamental training mandates are timeless, the demands from training partners are expanding:
- Building talent pipeline: A distraction-free, intensive 6-8-10 month on-campus program coupled with an internship can work wonders in nurturing and preparing a pool of talent ready. Not only chances of dropouts are minimal in residential programs but also living, socializing, and studying together enhance the opportunities for learning complex core banking products, processes, and technologies. Customized, learner-driven training blended with digital technologies can prepare students to be job-ready from the first day. Since the demand for such resources is high, the training providers can work out a guaranteed employment arrangement with leading banks and insurance companies to offer the course effectively free to the students.
- Onboarding & induction for probationary officers: Raising the skills of fresh probationary officers – tomorrow’s leaders – with requisite banking knowledge, skills and attitude is critical. A bank cannot afford to onboard a PO with half-baked knowledge. Not just hands-on, target-based learning, a learning partner will also train a probationary officer with soft skills, communication skills, regulatory requirements, etc.
- Digital learning for retail: Retail training for last-mile distributed teams is a missing component in the BFSI education space that addresses the friction between education and distance. Growing teams spread across locations are at the cusp of this which leads to knowledge deficiency, dissatisfaction, and attrition. The endeavor is to offer effective solutions to address the key challenges faced by the sales and operations teams. Solutions around ‘anytime anywhere’ learning with online tracking of progress and analytics-based deep insights are need of the hour.
- Analytics Competency: According to an IBM study, 89% of CEOs from banking and financial companies say that their top priority is to harness the power of data with analytics and rebooting banks’ analytics capabilities. Today, without establishing analytics as a mandatory business discipline, BFSI companies cannot grasp the enormous potential that the new economy has to offer. A forward-looking rich curriculum should impart training around Analytics Democratization, Statistics, Programming, Machine Learning, R, Python, Big Data, et al.
- Technical, behavioral capability: 50% of CXOs rank competency building among the top three priorities in their organizations, and 56% link learning to individual performance, states a McKinsey study. Though behavioral, technical, and core competencies that companies need to have evolved, but methods of imparting these skills have not. Training partners can play a critical role in imparting the nuances of tackling daily functional problems and bottlenecks across verticals.
- Learning & Development (L&D): 75% of managers are dissatisfied with their company’s Learning & Development functions, informs a Harvard Business Review study. The dynamics of the workforce are changing, so is a need for complex learning and performance. Not only is the majority of today’s training vastly different than yesterday, but the purpose, timing, and curriculum are also evolved to great deeds. The L&D in-sourcing program can be designed to deliver all core functions that an in-house talent management team does. From competency assessment to training need analysis, it can take care of cost-effectiveness, performance improvement, employee engagement and ensure everything is synced to achieve the organization’s mission.
- Leadership development: In a report titled ‘Leadership Development Trends 2019‘, Mercer|Mettl, a talent assessment firm revealed that 80% of firms in India are facing a leadership talent shortage. The importance of developing leadership across the BFSI functional domains is well recognized. From exceptional young individuals to experienced managers, training institutes can help their clients by building and expanding leadership capabilities at scale across all levels.
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