Banking on People

Even before COVID-19 struck, the Hayne Royal Commission, billion-dollar AUSTRAC fines and technological disruption had created a landscape which was driving significant changes in the banking and finance sectors. 

Trust was low, with Accenture’s Financial Services Consumer Study showing 33% of Australians reporting a loss of faith in our banks in 2019, compared to just 12% in the US. Important to the banks was recovering to their previously high levels of customer trust, a commodity that is the lifeblood of Financial Services. 

Changes were going to be made.  Many of those changes involved digital innovation, improving accessibility and creating and evolving products to drive greater financial literacy.

The pandemic has undoubtedly fast-tracked some of these changes, moving from in-person to digital banking to meet demands for 24-7 accessibility. Lower reliance on cash and complex tracking tools has meant face-to-face, bricks and mortar banking continues to decline.

Tellingly, an estimated 175 branches from the Big 4 have shut in the past 12 months and 2,151 ATM's were removed in just a three-month period from April to June. PayPal Australia reports that since the start of the pandemic, 2.5 million adult Australians have shopped online for the first time. Banks understand a branch has value, particularly in regional and rural areas, but in light of these consumer changes are increasingly expensive to open, staff and maintain.

As James McIlvena, the Managing Director of Lee Hecht Harrison in Australia and New Zealand, explains: “We are seeing a significant shift. People are thinking differently about how they work and bank." 

“We are also seeing a wave of processes being automated. Almost all the Big 4 and the digital disruptors are focusing on making financial transactions more user friendly."

“The banks want to provide us with tools that enable us to better budget and make better financial decisions. They don’t want their customers to default"

“The question for the banks is how do they restructure and how to do it in a socially responsible way. What is the balance between retaining their talent and retraining them or restructuring and exiting employees responsibly?”

“It starts with a mindset shift - looking at employees as renewable, not replaceable.”

"Investment and focus on reskilling, retraining, support and guidance during any redeployment periods is a start, but often organisations don’t allow enough time to get optimal outcomes. Better results can be generated by providing coaching and advice to give employees the very best chance of landing another role internally."

“Not getting this right holds a great risk for employers, well beyond just the legal ones. Damage to your employer brand, damage to employee morale and in turn productivity are all risks that could do much greater harm. If you want to continue to attract talent and minimise business impacts, there must be a deliberate approach. We’ve worked with businesses that see an improvement in these measures because people are treated as valued assets rather than unwanted possessions.”

“Unfortunately, there won’t be roles internally for 100% of the people who want to stay despite the best intentions,” he said.

Reskilling staff to enable them to transition to a different career is vital in this process. Guidance is needed to ensure that effort is well placed and in a direction that is future focused to secure not only the next job, but the next career. The most progressive organisations will help support the re-education of their employees, not just while they are employed but as part of the separation process. The recent budget announcement regarding application of Fringe Benefits Tax for training opens a sensational opportunity to do more.  

The advent of COVID-19 has seen the majority of education institutions offer more courses online which makes it easier for courses to be undertaken in a transition period. 

“It is important at the start to provide career coaching for employees to give them some idea of what is out there. This usually involves assessments and once a direction is chosen, the retraining begins,” Mr McIlvena said.

“Not all options are around reskilling. There are also pathways to entrepreneurship. People often get a reasonable payout which gives them the opportunity to chase a long-held dream. Some may also decide to go into semi-retirement and do a shortened number of hours. It is important to provide your workforce with options and not have a blanket approach.”

Mr McIlvena said an additional hurdle for the banking sector was often the long tenure that employees tended to have. “The average tenure is 10 to 15 years, but some have been there 35 years. They may have walked into the branch after their final day of high school, been taken on as a bank teller and been there even since."

“Some won’t even have a CV or know how to write one. We provide career coaching and guidance, from detailed career coaching through to help getting the basics in place, a CV, practice mock interviews – we want to make sure the person is as best prepared as possible but need to meet them at their current level of readiness.”

If considering reskilling Mr McIlvena said it was vitally important to get buy-in from staff. “You need people’s willingness to take the next step. It might begin with an assessment on preference or capability. What do you really want to do? Will you be able to complete the training?"

“You might take someone who understands the retail bank system and products and retrain them to do some analytics or operational risk. Some of the best people for some of the hardest to source jobs are sitting right under your nose. It is about understanding each individual’s strengths and what skills are transferable.” 

“The financial sector is undoubtedly changing at a rapid pace. Banks and other financial organisations need to be thinking about what they will look like in 2, 3, 5 years. This will provide them with plenty of opportunity to prepare.”