CEOs at financial services (FS) firms need to consider building the rights skills for their organisations to compete in the future. Doing so will likely require making investments that won’t generate a return for some years, according to a new report from PwC.
The report – The upskilling imperative for financial services firms – was conducted before the outbreak of the Covid-19 pandemic, however, many of the insights are still relevant, if not pertinent to the current climate. The findings from the report form part of PwC’s 23rd annual Global CEO Survey 2020. The Covid-19 pandemic has accentuated and accelerated the need for digital transformation and upskilling initiatives aimed at improving internal processes and customer engagement.
Costa Natsas, PwC Africa’s Financial Services Leader says: “Digital transformation has been underway in the financial services industry for some years. Financial services firms are modernising their technology systems, boosting innovation, automating to drive down costs, and adapting the user experience to meet the changing needs and expectations of consumers. No amount of investment in digital technology, however, can help them fully attain their financial and productivity goals if the industry is still rife with fragmented technologies and data that is hard to obtain.”
The Covid-19 pandemic, having shown the value of well-developed digital capabilities, could provide fresh impetus for accelerating digitisation.
Developing new skills, workforce transformation and digital transformation go hand in hand. The crisis has also underlined the importance of ensuring that employees have the right skills and the willingness to continually learn and embrace change.
According to the survey results, financial services firms are less likely than their peers in other industries to say they have made significant progress across a range of upskilling efforts, and more of them acknowledge that they haven’t made any progress at all.
Key findings from the survey are:
· 7% of financial services CEOs say their organisation has made significant progress in areas such as improving workers’ and leaders’ knowledge of technology and its implications, compared to 20% of the full CEO sample.
· 24% say their upskilling programmes have led to greater innovation and an accelerated digital transformation, compared to 30% of CEOs across all industries.
· 16% say they have been effective in reducing skills gaps and mismatches, compared to 20% of all CEOs.
· Financial services firms struggle to retain employees who have learned new skills (15% of CEOs say this is their biggest challenge) and to find the resources to conduct upskilling programmes.
· Nearly 40% of CEOs say their firm has made no real effort to partner with the sort of institutions in academia or government to help them develop the skills that their business will need in the near future.
Unfortunately, people with both digital skills and core skills are in desperately short supply andnot just in financial services. As described in the 2019 PwC report The productivity agenda: Moving beyond cost reduction in financial services, research has found that the biggest barrier to digital innovation isn’t technology, process or data, but a lack of skilled teams.
Francois Prinsloo, Banking and Capital Markets Leader for PwC Africa adds: “The financial services industry is changing at an unprecedented rate. Financial services firms must keep pace – not only at an organisational level, but also in how they upskill their people. In a relentlessly changing market, success demands nothing less.
“According to our annual Global CEO Survey, business leaders who have made more progress on their upskilling agendas tend to be more optimistic about their company’s growth prospects than those who haven’t.
“If events so far this year have anything to teach CEOs and the companies they lead, it’s that the era of worldwide disruption is firmly here. Digital tools and new ways of working should be on the agenda for all organisations – including financial services firms. The creativity and innovation needed for success requires both new technology and new ways of work – which in turn call for upskilling initiatives.”
Building a successful upskilling strategy calls for management to focus on six aspects:
1. Focus on digital tools and news ways of working: Digital tools and new ways of working should be on the agenda for all organisations – including financial services firms. The creativity and innovation needed for success requires both new technology and new ways of work – which in turn call for upskilling initiatives.
2. Tell a powerful story about the value of upskilling: Company leaders and ‘digital champions’ in the workforce need to reinforce messages on upskilling and other initiatives, to ensure the organisation is aligned around the plan.
3. Pilot within a segment of the workforce: Rather than launching company-wide initiatives, identify a narrower base for early stage measures.
4. Integrate the upskilling initiative with existing talent and training programmes: Upskilling needs to be linked to processes such as performance management, recognitions and rewards and other elements of HR already in place. This kind of alignment will reinforce the company’s commitment and help boost employee participation.
5. Prepare for obstacles: Financial services firms should expect common concerns to arise, especially anxiety from employees. Organisations should undertake to reskill any staff that may be affected by restructurings or headcount reductions in order to create future employment opportunities for them.
6. Ensure longevity: Organisations need to strike the right balance between productivity and employee well-being. The right approach to upskilling optimises both.
The Covid-19 pandemic has accelerated changes in how and where we work. For many organisations, including the financial services sector, the crisis has brought to the fore the discrepancy between the skills people have and those needed for jobs in the digital world. A well-designed strategy to deliver a workforce with the digital skills, resilience and agility is critical. Taking steps to upskill helps organisations build confidence because it shows a clear, practical course of action in an increasingly uncertain world.
