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Banking & Finance

Banking HR management benefits from digitalization

Released at: 11:08, 03/08/2019

Banking HR management benefits from digitalization

Photo: Viet Tuan

The digitalization of human resources management is also being given greater attention at local and foreign banks.

by Nghi Do

Global HSBC conducted “Project True North” in 65 countries and territories, including Vietnam, in August last year, impacting on 26,000 employees. The project was not only its largest human resources (HR) transformation to date, but also the largest HR transformation of its kind globally. Mr. Nonoy Nuyles, HR Director at HSBC Vietnam, explained that the era of Industry 4.0 means digital transformation is unavoidable. Change is taking place more quickly than ever in all fields, including banking and finance. As a global bank, one of its advantages is having the opportunity to learn from colleagues overseas and studying what has been applied in other markets and then adjusting and applying them locally.  

At HSBC, the HR function, just like its business, has begun a transformation through the reformatting of its backbone systems infrastructure. The bank has embarked on a massive change towards process simplification with elements of global consistency. HSBC’s HR systems using cloud-based platforms have allowed its people to access the same types of applications and data through the internet instead. “The move to SAP Cloud-Based technology combined with an integrated front-end portal was a major investment to replace the legacy platform,” said Mr. Nuyles. “In HR management, the digitalization journey has reached HSBC’s shores.” 

Other banks have also witnessed the changes taking place in the banking sector and recognized that competition is not just coming from other banks but also from outside players. “There will be a workforce shift overall and for our bank also, so the top priority is to attract and build up ‘3D Talent’ (digital mindset, data, and disruption),” Ms. Tran Thi Huong Anh, Director / Head of Human Resources at CIMB Bank (Vietnam), told VET. “Roles like UI / UX (user interface / user experience), scrum master, data & analytics, and partnership / business development are in increasing demand instead of conventional banking roles.”

As such, CIMB defined its original strategy from its first day as being “branch lite and digital led” and this is one of its advantages over well-established banks along the digital transformation journey. “Our organization is change-capable and we can readily adjust our business model as needed,” she added. “Having nimble, agile infrastructure is also critical and helps our organization execute our strategy more quickly, innovate faster, and swiftly respond to changing customer needs. Our HR staff have been equipping themselves with knowledge and understanding about Industry 4.0, digital transformation, and agile methodology, and their impact on the banking and financial services industry.”

Local analysts have noted that many banks in Vietnam are transforming their strategies towards digital banking, including internet banking, mobile banking, and digital banking services. The current operational model and workforce size also requires banks adopt new strategies to cope. A number of international banks have invested in moving from the HR software solution “People Force” to the new solution “Workday”. 

“The trend towards digitalization in the HR management process has taken hold in Vietnam’s banking industry, especially in retail banking, which demands the digitalizing of the HR system,” said Ms. Nguyen Thi Bich Hong, General Director of HR2B, a Vietnamese HR consulting company. “Ninety per cent of all banks have a huge number of employees and HR is a top priority. Thus, 

digitalization in the HR system is in keeping with the digital transformation of the bank in order to boost productivity and efficiency.”

Transformation barriers

Many major banks still face transformation-related obstacles when digitalizing their HR system. Due to high recruitment demand, a third party - HR consulting companies - is normally engaged to conduct the process. But integrating the third party’s recruitment management software with the highly-secure operations system of the bank is not good for either, according to Ms. Hong. “This is a limitation on banks moving to a comprehensive digital system.”

With experience in many industries, Ms. Tran Ngoc Tran, Head of Human Resources at  fintech startup Finizi Vietnam, said local banks share a concern over information security and so don’t outsource recruitment, despite the rather high cost of completing the task internally. Multinational banks, meanwhile, are in a position to engage a trusted third party. 

The trend towards digitalization in the HR management process has taken hold in Vietnam’s banking industry, especially in retail banking, which demands the digitalizing of the HR system.”
Ms. Nguyen Thi Bich Hong, 
General Director of HR2B

Fully connecting any new HR system to its predecessor to transfer data is also problematic. Conversely, Ms. Tran said, this is actually an advantage for newly-established organizations. “Large companies will face difficulties as a huge volume of staff data is put on the cloud,” she said. “They need to ensure that data is not lost and must manage it daily, while uploading old data to a new system. When building a HR system’s digitalization strategy, planning must be thorough and done slowly and carefully. It’s just not possible to change a system overnight.” Ms. Hong said that while all banks should have a HR management strategy, the larger banks are able to invest more into it. For all, however, transformation takes time and will impact all manner of things. 

Agility required

CIMB is currently seeking digital delivery professionals (system architect, scrum master, devops engineers, software developers, etc...) but finding it quite a task as the field is new and talent is thin on the ground. Ms. Huong Anh forecasts increasing demand in “3D” positions in the banking industry, such as UI / UX, cloud, agile, data & analytics, and sales & revenue generating roles, and falling demand in traditional positions such as tellers, operations-based staff, call center agents, and clerical / admin roles and even conventional credit roles.

Routine tasks are being weeded out as everything is automated and replaced by digital systems. This requires employees develop themselves and promote their capacity. Automation inevitably results in fewer personnel and, hence, for the bank, lower costs. 

From the perspective of a global bank, Mr. Nuyles from HSBC said an efficient process is the cornerstone of customer experience management and improvement. The success of any technological innovation is therefore underpinned by a strong understanding of customer potential, the engagement journey, pain point solutions, and overall proposition. 

The transformation demanded of each individual encompasses both mindset and skill, 

he went on. Workforces must be agile. Behavior expectations include learning quickly and applying new knowledge immediately. Change demands quick solutions and the ability to fine-tune and improve during the process, with a capacity to navigate and create through ambiguous and limited givens.  

Ten years ago, only around half of CEOs of financial services (FS) companies saw skills shortages as a threat to their growth prospects. According to the new “Industry Trends 2019, Financial Services Talent” report, 76 per cent now see it that way. This lack of key skills is affecting everything an FS organization does, including staff costs, innovation, and customer experience.

So how can FS organizations create a more cost-competitive talent model without stifling innovation, impeding growth, or undermining customer service? To provide answers to this pressing question, PwC recently released a new report based on the results of its 22nd Annual Global CEO Survey.

“As traditional talent strategies are struggling to keep pace with disruptions, there are a variety of approaches that companies can take,” said Mr. Nguyen Hoang Nam, Assurance Partner and Financial Services Leader at PwC Vietnam. “Some of them are self-contained. Others will involve participating in broader industry-wide efforts, often with government input. On the whole, they point to an end result where people and technology work together more effectively.”

PwC researchers have identified the four Rules of Talent Attraction: 

1. Forge a renewed sense of purpose 
Although FS organizations have found themselves weighed down by process and regulation over the past ten years, digital transformation has set off a fresh wave of innovation. Pushing a business to the forefront of that wave and creating an environment where it can prosper can help make it a magnet for talent.

2. Get workforce planning up to speed
Effective data analytics can give businesses a critical edge in anticipating future talent needs and creating a compelling people experience. Priorities include ensuring you have people within your HR team with the necessary data modelling skills, as well as the ability to interpret data and understand its business implications. 

3. Managing the real impact of technology
The impact of technology on a workforce is often misunderstood. Far from whole divisions being automated out of existence, we’re seeing parts of jobs being replaced and augmented. The resulting priorities include learning how to best use digital tools and making the most of the time they free up. 

4. Operate as part of a wide ecosystem
Contract, contingent, joint venture, and other forms of partnership or independent talent should be at the center rather than the fringes of workforce strategies. The move to a platform model in which the most appropriate products and services are brought in would accelerate the move to partnering and provide more flexible talent sourcing. Key priorities include the identification and engagement needed to create a reliable network of independent contractors.

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