Unskilled staff threaten banks’ ability to adapt to digital transformation

Only 4% of bank business and IT executives believe that the impact of technology on the pace of banking change has stayed the same over the past three years, while 96% said it has either significantly accelerated or accelerated, according to a new report from Accenture.

This technological disruption has a large effect on how banks operate, and it seems unlikely that the pace of change will decelerate anytime soon.

Here’s what it means: Some technologies will have a bigger impact than others, but it will require substantial work from banks to stay on top of them.

• AI is the most promising technology to transform the banking space. Forty-seven percent of respondents said AI will have the biggest impact, followed by just 19% saying the same for quantum computing and 17% for distributed ledgers and blockchain. The disappointing outcome for blockchain appears to be in line with recent announcements from banks: Citi has abandoned its plans to launch a crypto and Bank of America’s tech and operations chief has expressed skepticism on the benefits of blockchain.
• Banks’ workforces appear to be at different stages in terms of tech savviness.Seventy-four percent of banking respondents either agree or strongly agree that their employees are more digitally mature than their organization, resulting in a workforce waiting for their organization to catch up. However, 17% of respondents said that over 80% of their workforce will have to move into new roles requiring substantial reskilling in the next three years, compared with only 5% saying the same for the last three years.
• Additionally, banks don’t know as much about third-party partners as they perhaps should. Over 1 in 10 banking respondents believe that their partners’ security posture is extremely or very important, as well as that their consumers trust their ecosystem partners. However, only 31% of respondents say they know that their ecosystem partners work as diligently as they do, while 57% of them simply trust their partners and 10% hope that they are diligent.

The bigger picture: Banks need to prepare for a future that will require them to put in a lot of resources, and some might struggle.

• To make the most of AI opportunities in banking, incumbents need to upskill their workforces. While AI is the most promising technology to transform the banking space, this promise can only be realized if banks have the necessary talent in-house to adopt new AI solutions. As such, they should make it a priority to upskill their staff to make AI transformation a success — which may be difficult for those players that have to upskill a majority of their workforce.
• And banks need to up their security efforts since open banking is becoming a global trend.Open banking makes working with third parties more frequent. This will force banks to double down on their security efforts, as a security breach with their partners could affect customer trust in a bank’s overall services. If employees aren’t up to date with new technologies — including application programming interfaces used for open banking, and AI — they can’t keep a bank’s network secure.