Creating the AI-powered banker - Home - Efma · 2019-04-08 · 6 Creating the AI-powered banker And yet Accenture’s survey found that only 3% of banking executives are investing

DIGEST

Creating the AI-powered bankerHow banks should prepare themselves for a hybrid human-and-machine workforce

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Creating the AI-powered banker: How banks should prepare themselves for a hybrid human-and-machine workforce is part of a series of digest publications from Efma, examining topics which are having a significant impact on the financial services industry. This Efma digest provides a collection of insights into how technology is reshaping the workforce, and in what ways financial institutions should develop their talent pipeline and internal skillsets to work alongside machines. It includes the latest research along with case studies that highlight related success stories, and observations from experts that work within this field.

Compiled by:

Anne-Laure JozanHead of content management APAC, Efma [email protected]

Images from www.istockphoto.com

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Foreword

Vincent Bastid CEO, Efma

Fifty one years ago, at a Barclays branch in Enfield, north London, the world’s first automated teller machine (ATM) was unveiled. Comedy actor Reg Varney withdrew money from the cash machine dispenser, spelling the beginning of a new era of banking – one which didn’t rely purely on humans to manage transactions.

But the impact of the ATM machine was not to destroy tellers. Instead, they actually increased as banks shifted their tellers from purely transactional activities to sales and advisory roles.

Today, we are on the cusp of another revolution in the industry – something which promises to have long-lasting ramifications on our workforce. We’re talking about machines and the rise of artificial intelligence (AI). For banks, AI offers the tantalizing prospect of huge productivity gains and customer service improvements. But many also fear that the rise of AI threatens countless jobs and undermines individual roles like no other technology before it.In this Efma digest, we highlight some of the most prominent challenges and considerations banks face as they gear themselves up for managing and developing a digitally enabled workforce. Over three parts, we look at how technology is reshaping the way people will work, including some of the ways banks are developing exciting and engaging ways to train and future-proof their workforces; what banks need to do to help their workers build resilient careers; and how they should rethink existing job roles, including some of the best ways to effectively introduce AI.

Ultimately, the report seeks to provide clarity on the matter of how banks should ready their workforce for big changes in the years ahead. And that banks’ aims should not be to simply replace their workers with technology, but rather to explore how they can take the best of both machine and human attributes, and bring them together to realize their full potential.

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05 | A new workforce in a digital economy: the current state of play

05 | Job cuts but not as many as expected05 | Rethinking existing jobs06 | Supporting future talent

11 | Relevant skills for creating the future banking workforce

11 | Developing new skills and competencies 11 | Reskilling/upskilling the workforce13 | Organizing for agility and automation 14 | Fighting resistance

15 | How to redesign jobs in a hybrid human-and-machine environment

15 | Taking a people-centric approach to digital transformation16 | Focusing on what AI and humans do best together16 | Shifting from workforce planning to work planning17 | Pivoting the workforce to areas that create value 18 | Transforming recruitment and career management

19 | The future workforce

07 | How technology is reshaping the workforce 07 | Providing the right tools08 | Finding the balance10 | Where the value of technology lies

INTRODUCTION

TRANSFORMING TALENT

REIMAGINING WORK

CONCLUSION

UNDERSTANDING THE BANKER OF THE FUTURE

CONTENTS

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A new workforce in a digital economy: the current state of play

INTRODUCTION

Banks are digitizing their processes, products and services, but they must also consider how the digital economy is impacting their workforce. What will the banker of the future look like, and which tasks will they perform?

Machines are poised to take over 30% of work at banks, claims the 2017 McKinsey report Cognitive Technologies in Capital Markets. Indeed, cognitive technologies – applications and machines capable of performing tasks once requiring human thought – are now being used by banks to facilitate trades, serve customers and make sense of vast libraries of data. Does that mean machines are set to take over our existing workforce?

Many say no. Companies already making the transition to digital aren’t slashing their workforces, says the McKinsey report.

Job cuts but not as many as expected“[Automation] helps free up valuable subject experts to do more,” says Jared Moon, a McKinsey partner who co-wrote the report. “It will require people to use new skillsets, taking away manual work but allowing more around analytics, transformation and change.”

The Boston Consulting Group (BCG) paints a more bleak picture. In its 2018 report, The Impact of Artificial Intelligence on the Financial Job Market, it predicts there will be 1.04 million job losses

by 2027, and that to start off with, AI will mainly affect marketing and sales, risk control and audit, customer management and services in the front and middle office.

But according to American Banker, the future is more nuanced.

“There is no question some jobs will be lost,” says the May 2018 article ‘How artificial intelligence is reshaping jobs in banking’. “But others will be created, and still others will morph into something different — bot designer, bot supervisor, soother of the most irate customers. In some cases, AI will just take on extra work nobody wants to do.”

Rethinking existing jobs Indeed, some observers suggest that it is the boring jobs which will disappear first, leaving humans to focus on more interesting, enriching tasks. In a 2018 Accenture report, Future Workforce Survey – Banking Realizing The Full Value Of AI, of 1,300 non-executive bank employees, 67% said they believe AI will improve their work-life balance, and 57% expect it will expand their career prospects.

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And yet Accenture’s survey found that only 3% of banking executives are investing in retraining their workers to prepare them for the AI workplace. Speaking to American Banker, Alan McIntyre, one of the report’s authors, says that this is because the technology is still new and banks are just testing the use of AI in areas like trading, lending, and customer service; they are not yet looking at the bigger picture.

Supporting future talentIt is now up to banks to understand how they can take advantage of both technology and their existing workforce. It will require a rethink of how they design jobs and organize work to how they think about future workforce and skills planning.

Some are ahead of the game. Scotiabank announced an investment of US$250 million over ten years to give its employees the tools and opportunities that they need to adapt and thrive in a digital economy. And DBS plans to hire up to 100 of the brightest tech sparks through its Hack2Hire program.

Those that do it well will gain the ability to solve complex challenges, develop new products and services, and break into or create new markets. Accenture’s analysis indicates that between 2018 and 2022, banks that invest in AI and human-machine collaboration at the same rate as top-performing businesses could boost their revenue by an average of 34% and, critically, their employment levels by 14%.

Key facts from the Accenture report

Source: Accenture, Future Workforce Survey – Banking Realizing The Full Value Of AI, 2018

74%

of banking executives believe the industry will be completely transformed by

intelligent technologies

67%

expect AI to result in a net gain in jobs in their

organization in the next three years

of banking employees expect intelligent

technologies to create opportunities for their work

26%

Banking executives say only 1 in 4 of their employees are ready to work with intelligent technologies

54%

say the growing skills gap is the leading factor

influencing theirworkforce strategy

3%

But hardly any say they plan to significantly increase their investment in reskilling over

the next three years

67%

A global non-profit organization, established in 1971 by banks and insurance companies, Efma facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. Over 3,300 brands in 130 countries are Efma members.

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Creating the AI-powered bankerHow banks should prepare themselves for a hybrid human-and-machine workforce

July 2018