Digital transformation is more than just a technology refresh. A successful strategy will be built on new skillsets and ways of working, as well as a flexible workforce. 

Digital workforce

Digital transformation is just business transformation under a different name, according to pundits. However, focusing on the word ‘digital’ has led many organisations to concentrate on replacing legacy technology and re-engineering legacy processes, ignoring the people component of a large transformation project – or worse, signalling their intention to shed legacy staff.

“Many multi-year digital strategies fail to mention the role that employees will play in driving change,” says Carole Berndt, senior strategic adviser at career development accelerator Transition Hub and a former transaction banker. “Yet a sign of a truly transformational organisation is when the digital programme starts and ends with people.”

The people factor

According to a 2016 McKinsey cross-sector survey, six of the top 10 challenges to meeting digital priorities and making digital transformations successful were related to culture and talent. “The biggest issue was cultural and behavioural challenges, followed by lack of understanding of digital trends; lack of digital talent; lack of alignment in organisational structure; lack of internal business alignment; and lack of senior support. Clearly, it is not only about a digital transformation but [also] about a cultural, organisational and talent transformation,” says Dana Maor, senior partner at the consultancy.

Today, financial institutions are waking up to the importance of new ways of working to attract talent, as well as training the existing workforce to address the growing skills gap. “Closing the skills gap requires not only firing and hiring – as there is no way to do so fast enough – but must include a combination of upskilling, reskilling and redeploying,” says Ms Maor. “In addition, organisations must be thinking of new and different ways of employment, as well as hiring new talent, and with that goes building a different value proposition for employees.”

A few banks, including Singapore's DBS, were ahead of the curve in their people strategy. According to Paul Cobban, chief data and transformation officer at DBS, the bank decided early on (and “counter to advice at the time”) to bring its whole workforce on the journey to becoming a digitally transformed bank. “Our hypothesis was that if a bank could create a climate for learning, then most people would get on board,” he says. “We wanted to create an environment to ‘unlock the curiosity’ of our people.”

Leading from the top 

An ambitious transformation such as DBS’s begins at the top and permeates the whole organisation. Mr Cobban reports tremendous sponsorship from CEO Piyush Gupta and the executive team, while he also has a 200-strong team whose job is to drive transformation across the organisation. “Technology, processes and workplaces don’t change themselves – it is the people,” he says. “Having a team that takes the digital strategy and turns it into a serious transformation programme across the bank is a key ingredient for success.”

Embedding a digital mindset across an organisation requires different leadership skills and ways of working. Many banks are experimenting with agile methodology, which is an iterative approach to development that is performed in a collaborative environment involving smaller cross-functional teams. Some are already seeing the benefits of breaking down organisational silos, but such a structure requires clear guidelines regarding goals.

To address this issue, SEB created the SEB Leadership Foundation, which sets the framework to help business leaders understand and translate the digital plan to their group. “People are free to move within these boundaries without having to get approval up the hierarchy chain, because working this way is too slow. We empower teams by giving them clear mandates and ensuring they understand where we are going,” says Jeanette Almberg, head of group human resources (HR) at the Nordic bank.

“We are also blending skills to create strong teams and promote empathic listening, whereby managers are taught to listen to all the different perspectives,” she adds. “If people [are listened to and] feel accepted in their team, their creativity goes up.”

Paula da Silva, head of transaction services at SEB, adds that this new way of working needs to be continually exercised. “It is like a rubber band – we stretch it at the meeting, but immediately it goes back to its original shape. We need to repeatedly stretch the organisation, so that over time people will grow accustomed to working this way. It takes both patience and persistence but also a deep understanding of what we are doing.”

US Bank is also focused on equipping its managers to operate in the new environment. “This is about coaching feedback, relationship management and emotional intelligence, because they are engaging with both customers and employees and need empathy as they navigate situations,” says Susan Avelluto, the bank’s head of enterprise talent.

Unlocking creativity

Many banks are using internal competitions to empower their workforce and unlock creativity. For example, one client of The Meyer Partnership, which specialises in global financial services recruitment and retention, encourages employee teams to submit business plans for digitising workflows, entering new markets or creating new strategies to better serve their clients. The company set up an internal review committee, which then funds the successful initiatives. “This programme has had a huge impact not only on the business but also on morale and a feeling of empowerment; that helps retain good people,” says Nicole Meyer, CEO of The Meyer Partnership.

She adds: “These large organisations have the brain power and the wherewithal to change things, but frequently people don’t feel empowered to develop or create the answers. This financial services company’s incentive is that it will fund the projects and put the person on a trajectory and/or the firm’s radar for taking on increased responsibilities and a leadership role.”

‎Société Générale launched a competition for 'intrapreneurs', where all employees could submit proposals for developing fintech solutions across Europe, says Susanne Chishti, CEO of global fintech network Fintech Circle and founder of Fintech Circle Institute, a fintech learning platform. The chosen teams got a six-month sabbatical, fully funded by the bank, to develop their fintech proposition. “Afterwards, the bank could buy into their idea or prototype, or not. If not, they could go back to their day jobs,” she says.

Ms Chishti believes banks must be willing to experiment to transform the workforce. “A bank should assemble a toolkit, which consists of training, competitions, external accelerators and internal incubators. It should try several things at the same time, then evaluate and fine-tune,” she says. “Banks often have HR divisions who plan training for the whole year in January – but it should be assessed every quarter.”

Training fitness

Ms Chishti is not alone; many banks are now looking at ways to modernise training, recognising that the traditional methods are no longer fit for purpose. “Almost all banks have learning and development budgets and are investing in management training – but these initiatives remain part of a legacy mindset,” says Ms Berndt. “They need to let people determine what development they want by, for example, giving them money to use for personal development of their choosing. This gives employees empowerment, ownership and personal responsibility for their development.”

DBS has run hundreds of experiments around how to teach staff and pique their curiosity. One example, the Gandalf scholarship (Gandalf is DBS’s internal digital transformation programme) encourages employees to apply for a S$1000 ($738) grant to learn any subject any way they want. “The only ask is that they teach other staff when they return. We then film the peer-to-peer teaching sessions and put them online,” says Mr Cobban. “Two things happened: we were overwhelmed with applications – people love the idea of teaching and being viewed as an expert; and we got a massive return on investment in terms of views of the online courses and teach-back sessions.”

Pan-African Ecobank approaches social and employee-driven learning in three ways: promoting tuition assistance support for staff willing to develop themselves, whether internal or external courses; ensuring the e-learning catalogue is 100% accessible to every employee, effectively democratising access; and leveraging internal experts and expertise.

Five years ago, it launched its corporate university, called Ecobank Academy, which has become a critical pillar of its digital strategy, according to Simon Rey, the bank’s group head of talent, learning and organisational development, who also heads the academy. “Ecobank designs its courses centrally at the academy and then deploys them locally, whether as virtual learning experiences or instructor-led [courses], or a blend of the two. This allows us to achieve scale and efficiency, as well as the quality and speed of delivery that we require,” he says.

Ecobank ensures that each programme has a built-in action-learning process. Staff come to the academy with business challenges, go into the classroom to learn and apply the learning to solve the challenge in real time. “The real-time action-learning model allows us to see impact much faster, so we adapt quickly if something is not working,” says Mr Rey. “The old way of learning doesn’t work in the digital world because a bank may have to develop completely new skillsets within a few months: for example, if the bank acquires new technology and people have to reskill quite quickly.”

Learning platforms

Banks are also making significant investment in digital learning platforms. “[Many banks have] digital academies and certificates that, in some cases, are even externally known and respected,” says McKinsey’s Ms Maor.

US Bank, for one, is focused on “delivering digital learning experiences that our employees can take advantage of anytime they want, accessed through mobile phone, tablet or desktop, as well as discussion forums and peer sharing initiatives,” says Ms Avelluto. “We kicked off our new learning ‘journey’ – no longer called training – in November and it will continue throughout 2020, engaging more than 10,000 employees. It will be a combination of engaging with digital content for both context and understanding what new skills will be needed to operate in a digital environment. And then we will bring them together in a forum – no longer a classroom – where they can engage with one another.”

For its digital learning platform, SEB Campus, the bank partnered with Combient, a cross-industry network of 30 companies in Sweden and Finland aiming to drive digital transformation through shared knowledge and co-development. “We created a community learning experience platform, built on curating both new and existing content,” says Torgny Gunnarsson, deputy CEO at Combient. “The shared platform has also made the group of companies attractive to engage with universities in Sweden, such as the Stockholm School of Economics and KTH Royal Institute of Technology, as well as internationally, for example MIT, Stanford and the International Institute for Management Development.”

SEB Campus is accessible to all 15,000 employees, as well as for collaboration with other non-competing companies, with the aim to get all employees to take responsibility for upgrading their skills on a regular basis. “We will curate content and put a green SEB stamp on it,” says Ms Almberg. “We can share our professional skills internally and create a networking opportunity where employees can share their experiences with peers from other companies.”

Engaging new talent

For banks, investing in the existing workforce is one thing, but attracting new talent is quite another. And their competitors for talent are not only other financial institutions but also fintechs and big technology platforms. Zubin Taraporevala, senior partner at McKinsey, believes that to win the war on talent, banks need to articulate their recruiting value proposition to the new and fundamentally different talent pool. “While there are parts of banks’ proposition that some may value more than being at a 24/7 fintech, banks also need to expand on how they will invest in employees’ careers – for example, through continuous learning and even publishing their work, which is quite different to what has happened historically,” he says.

DBS made a conscious decision early on to tell its story to attract talent. “We continue to explain our ambition to be a technology company, rather than a bank, and the kind of environment we work in,” says Mr Cobban. “We also came up with creative ways of hiring, using hackathons very early on.”

For example, when DBS decided to in-source its technology, it launched its second technology innovation hub, located in India, and wanted to attract the best talent but its brand was not particularly strong in the country. “So we came up with the idea of ‘hack to hire’,” explains Mr Cobban. DBS publicised the programme through social media channels, and applicants went through an initial coding test before the top 300 were brought into DBS’s Hyderabad centre.

“We gave them a real problem to work on and sat them with some of our own developers for about 48 hours. At the end, they pitched their ideas and 50 walked away with a job offer,” says Mr Cobban. The initial programme attracted 12,000 applicants. “We get an incredible depth of talent with that kind of approach.” 

Ms Avelluto points out that the war on talent is incredibly competitive, from entry-level skillsets, especially in digital and technology, to senior positions. “For US Bank, culture is very important and we want to ensure our new recruits understand our commitment to ethics, doing the right thing and their development. We need to understand the important drivers for new employees and adapt as we go,” she says.

Both US Bank and Ecobank are planning to use advanced analytics in HR to better understand staff. Mr Taraporevala says: “Companies are using advanced analytics to determine how to recruit the best engineers, or identify people who might make better managers. They are looking at the traits of high-performing blended teams, and exploring how to more systematically build those traits into how they approach staffing. While this is cutting edge in financial institutions today, it has been seen within hi-tech companies for years.”

Career empowerment

Career development is also undergoing modernisation, as employees want to be more empowered in their choices. Ecobank, for example, launched a career portal in mid-2019, following feedback that staff were not seeing enough career opportunities. The internally designed portal is fully automated and “demystifies talent, career opportunities and learning”, says Mr Rey. “We believe that employees must own their own career, and the bank needs to give the employee the necessary tools and support to achieve their goal.” This is especially important for a young organisation such as Ecobank, where almost three-quarters of the workforce is under 40.

US Bank is also revamping its career development policy, according to Ms Avelluto. “We are investing in helping our employees see where they can go in the company. In this way, they don’t have to make a jump to a big tech firm to get different experiences; they can get wonderfully rich and diverse experiences staying within the company,” she says.

The bank has begun piloting initiatives around letting employees move to another role within the company for a short period to gain a new set of skills. “The employee can continue to be employed with us, but they may want to test out new programming skills, for example. That is something that will become more common as we continue to transform,” says Ms Avelluto.

Fluid and flexible

In addition, Ms Meyer believes that banks need to be more fluid and receptive to a portable workforce, as the need for technical and digital skills prompt companies to go outside for talent, and suggests that the financial industry move to a plug-and-play model for employment. However, banks still struggle with the concept of a fluid workforce and she reports that many clients believe that “jumping around” is a negative sign. “Banks need to adapt to bringing people in on a part-time or project basis, or a shorter full-time contract,” she says.

Banks need to respond to how the next-generation workforce is changing, as well. “People are looking for meaning and purpose, and expect their jobs to provide that. It is not just about a pay cheque, but community, social value and so on,” says Ms Berndt. “In addition, they want to be involved in interesting work with interesting people. Therefore, to get the best people on projects, an organisation will need to have a collaborative, connected work culture. People will come in, work for three to six months on a project or initiative, and then they might move to another project in that organisation or they may move out for a while and return later.”

Mr Taraporevala adds: “The next few generations have different job expectations, which means that the traditional programmes around things like departures will need to be rethought. An organisation might have to think about a variety of secondments, rotations and returns. The talent management toolkit is getting dramatically expanded in terms of the flexibility that employers will need to show in future.”

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