The biggest barrier to digital innovation is a lack of skills
Economy / 17 October 2019, 5:00pm / Supplied Content
CAPE TOWN – Financial Services (FS) firms are modernising their technology systems, boosting innovation, automating to drive down costs and adapting the user experience to meet the rapidly changing expectations of their customers.
Yet no amount of digital investment can help them to fully attain new financial and productivity goals when the workforce is stuck in analogue. This is according to PwC’s Fit to compete: Accelerating digital workforce transformation in financial services report.
PwC’s Fit to compete: Accelerating digital workforce transformation in financial services report, which forms part of our New world, New skills series, highlights the need for digital upskilling across FS sectors (insurance, banking and capital markets, and asset management) across the globe.
FS firms are modernising their technology systems, boosting innovation, automating to drive down costs and adapting the user experience to meet the rapidly changing expectations of their customers. Yet no amount of digital investment can help them to fully attain new financial and productivity goals when the workforce is stuck in analogue.
Costa Natsas PwC Africa’s Financial Services Leader, says: “Globally, FS firms are transforming their ways of working seeking to enhance innovation in the products they create, the experiences they offer their customers and employees, and their ways of doing business. The institutional boundaries that defined the FS industry for years are dissolving, with banks and insurers embracing new kinds of customer offerings, new channels through which to offer them, and new types of journeys and experiences.
“As a response to all these factors, many FS companies are transforming their business models and processes. They are embracing artificial intelligence (AI), data analytics and design thinking. But for some, their existing workforce, may not have the skills needed to keep up. FS firms are doubling down on a commitment that might not have been on their radar a few years ago – a commitment to digital upskilling.”
With banks and funds no longer holding an edge in graduate recruiting, a sharper focus on employee experience and the organisation’s professed purpose is imperative. The technical skills, data analytics proficiency and design thinking that FS firms need right now all call for highly skilled people. These individuals, whether long-standing employees or new recruits, tend to be impatient with legacy infrastructure and increasingly want to work for companies that incorporate high-tech values – companies that are agile and digital.
While no one region has solved the problems of finding and (re)training skilled workers; each region has their own area of focus such as; increased investing in startups and training of skilled workers in the Asia-Pacific region, upskilling the existing workforce in North America, and Europe’s strong technical education system.
Natsas adds: “In South Africa, the major banks are making use of advanced technology and innovation such as ‘bots’, analytics and artificial intelligence to make their operations more efficient, leaner and discover deeper insights to improve the end-to-end customer experience.”
Barry Vorster PwC Lead for HR Technology and Culture, comments: “People with both digital skills and core skills are in desperately short supply, not just in the FS sector, but in the labour market at large. PwC’s 2019 report The productivity agenda: Moving beyond cost reduction in financial services, has found that the biggest barrier to digital innovation isn’t technology, process or data, but a lack of skilled people.
“As the future of work becomes ever more digitised, FS companies will have new opportunities to make a commitment to their employee’s success. These investments will pay off in the short run in a more energised business. And in the long run, they will also give employers a strong competitive advantage – with their employees, customers and the community at large.”
Six foundational steps to workforce transformation
In the early years of digital workforce transformation, development costs will be high. The return on investment might not be as compelling as it will be in later years. Managing these expectations with key stakeholders is an important part of the process. Our research found the six steps that are common among all FS organisations as they transition from an analog to a digital workforce.
Determine clear digital workforce goals – Explicitly articulate the business benefits you expect to achieve through your digital upskilling investments. For many firms, the primary goal is to optimise the value of these investments by equipping the workforce with the skills needed to effectively engage with and apply digital tools.
Tell a powerful story about the value of digital upskilling – All levels of the organisation should understand the vision and benefits of digital transformation. The narrative about the purpose and efforts of your transformation is critical to its success. When employees fully grasp ‘what’s in it for me,’ an organisation can better establish a culture of digital curiosity, self-learning and innovation.
Choose a focused launch point – Most firms select a limited segment of the workforce to pilot digital upskilling initiatives. Consider assembling a pilot group that reflects appropriate levels of diversity across the organisation in terms of, for example, gender, age, tenure, seniority, skill set and location. Additionally, consider alternative models to segment stakeholders beyond seniority, demographics or other common behaviours and traits.
Connect the programme with the rest of the organisation – It’s critical to connect the digital upskilling effort with existing learning and development and talent programmes across the organisation to help drive employee participation.
Prepare for headwinds – Launching a successful programme can prove challenging, and obstacles will inevitably arise. Look in advance at the concerns people may have, and other possible unintended consequences of your efforts. Put in place thoughtful contingency plans so that you can deal with these ‘side effects’ and challenges in a timely way when necessary.
Measure your progress and drive towards sustainable results – It is key to establish a long-term digital workforce strategy with interim milestones and success measures. Also, key to this is having employee involvement communicating progress early and often.