Keeping pace with digital change in banking – can your skills keep up?


What is the definition of being old?

Whether you still use the word digital.

While I show my own age with that introduction, the speed of technological change continues to be a principal driver in financial services, alongside the rest of the PESTLE analysis. Organisations like the challenger banks show that technology does not have to be branded as digital now: it is just how things are done. The longer established organisations are evolving and adapting, sometimes with legacy systems, and other historical hangovers like branch networks.

In the early 1970s ‘mechanisation’ was introduced to Barclays Bank, featuring the Burroughs TC 500 computer.

While this desk sized marvel, powered by hole punched paper tape, predates even my own retail banking career, it was at the time cutting edge. The advert includes a smiling female – alas a clue about its intended user demographic, not a sign of equal opportunities. In Barclays, ladies had only been allowed to stay working if they got married (they were supposed to resign to become housewives) in 1963. The men, meanwhile, we are supposedly the managers of tomorrow.

But this was – at the time, from what I was told – revolution. The move away from handwritten statements and ledgers was felt to be a threat to jobs, and some thought the new technology would not be as accurate or as reliable. On occasions it was not. Skills needed to evolve in handling the technology and managing the way people used it.

Skills development will remain unlimited – we will always be able to improve. I suggest we concentrate on three high level areas: technological, technical, and soft skills.

This history lesson shows that while technological change today may be considered revolutionary, even over whelming for some, its impact will not be fully appreciated for some time to come. Eventually it may well seem ordinary.

Technological changes under way now have helped the arrival of challengers such as Nutmeg, Starling Bank and Monzo, started on 2011, 2014 and 2015, respectively.  Seen as edgy, different, with impressive growth rates. But really so different from the opening of Firstdirect in 1989?

Yet technological changes will not just come from those we call challengers.

Arguably there is greater impact on banking from technology companies themselves, from M-Pesa in Kenya, PayPal, and the huge transformation in payment services in China through Ant Financial and Alibaba. Using Michael Porter’s Five Forces Model to capture all these also illustrates the breadth and depth of competition, despite traditional UK inertia around changing (or not) your current account banking relationship.

But this playing field is not level. Customers have much more power given the number of competitors. They need banking, not necessarily a bank. Despite come supermarkets entering the current account market (and like Tesco, now exiting it too) the overarching requirements of the regulator tilt the field.

What regulators like is control, and what keeps them up at night is systemic risk. The easier the system, the easier to keep systemic risk at bay. Regulator’s memories will also still be dominated by the financial crash of the late 2000s, and even a recent no consumer case situation such as Greensill Bank will influence their thinking. For regulators, they would prefer to control a market with   manageable competition.

Technology has enabled these changes to market, but what about your skills, and the skills required to keep pace?

Skills development will remain unlimited – we will always be able to improve. I suggest we concentrate on three high level areas: technological, technical, and soft skills.

Technologically, the good news (for me – maybe you?) is that we are unlikely to need to be able to code like Zuckerberg, just like you do not need to be a car mechanic to successfully drive a car. Technology interfaces will continue to be user friendly, and banks will retain specialist staff and contractors for the really cutting-edge elements. However, understanding how others find those interfaces will cross over into soft skills areas. Cybersecurity awareness will have to be a constant, even if this area is less driven by technology than by organised crime. But then banking has always seen crime driven by available technology.

There will continue to be a need to develop technical or ‘hard’ skills like analysis, lending appraisal, and strategy. These too have always been needed in banking, but technological developments mean data is (or should be) more readily available and improving skills in statistics and data interpretation. These may help where the use of artificial intelligence and algorithms manage data more quickly, but human intelligence is needed to programme them for the desired outcomes. In this sense, the development need is a faster and deeper version of learning how to use a Burroughs TC500 in the 1970s or see how credit scoring systems were developed in the 1980s. Going faster is easier though with the hardware available now.

Alongside technological and technical development comes the need to influence people about what they use and refine the interactions we have with technology. Softer skills can be seen as holding the competitive edge, as we still communicate with each other even if that communication comes across technology platforms as well as, let us say, actually meeting people. (Remember meeting face to face? It could be coming back into fashion over the coming months.)

There will also be an overlap between the technical, technological, and soft skills, highlighting the need for evolution on the types of leadership skills required. Leaders will have to shape the direction, and carry the regulatory responsibilities, while successfully engaging and delegating to management to ensure the rights things are done right. The next few years will also be affected by the outcomes of changed management during the pandemic, and the need for managing more flexible and flexible working employees, while using the technology to improve quality of work, not just increased output. By 2021 we should realise that Management By Walking About must be succeeded by greater delegation, teamworking and engagement.

Leadership skills will also need to feature a focus on financial outcomes alongside a realisation that technology is just one aspect of change in society, with discussions around corporate & social purpose forming a part of future strategy. This will require a blend of big picture strategic thinking alongside emotional awareness and intelligence, helping to engage staff and customers, not just rely on the technology alone.

The other skillset requiring continual development will be around the essentials of serving customers. Even challengers who are technology driven have customer interfaces, perhaps quaintly using the telephone where there is no branch network. More complex customer requirements will be found outside standard product offerings too, with some market segments valuing personal contact. Building trust in financial services cannot be left to the hardware and software alone. When I lost my Monzo password the personal email and telephone interaction is what brought reassurance even when my own human failings were letting the technology down.

Yet skills development alone will be insufficient. I use a development model of some vintage and uncertain origin, but simple enough to provide a framework – KASH. When examining your development, alongside Skills, you need to look at your Knowledge, Attitude, and Habits.

Knowledge required can seem limitless given the amount of data, books, and screens we look at. Knowledge of technological capability and trends will be desirable, even if you will not need to know your Unix from your Linux. An awareness of areas where technology meets social change – Clubhouse maybe? – means we can look for what could be signals for the future. In 2021 this inevitably includes include an awareness of what is happening with digital currencies, and the fluctuations in the fortunes of Bitcoin and its holders.

Another crucial arena of knowledge – which will delight readers and clients of T-C News – is regulation. This remains both a key driver and constraint on banking and financial services, even if at times regulators appear to move some way behind the curve. How long can it take to resolve something like London Capital & Finance?

Your Attitudes will be shaped by your knowledge, but also work to influence what knowledge you acquire and how you acquire it. While we can look at the connections between say personality type and attitude, one area which enables your development is curiosity. How are you viewing the latest financial news – feeling dismissive about new social trends or looking at evidence to which may point towards new products and services? Could something in today’s news be a threat to your own existing offering?

Attitude also shapes the way you go about development. From the perspective of a Learning & Development professional having a structured, regularly reviewed development plan shows an aspect of attitude. Yet plans and reality will always diverge – and development does not need to be confined to what you planned 12 months ago. Stay curious.

What connects our development of knowledge, attitudes and skills is our habits. Our reading habits, whether of dead tree press or social media scrolling, will affect our knowledge. Understanding not just what we read but an awareness of who has written it and why will help our analysis. Your own plan for Continuing Professional Development will also show your habits – are you going to the same meetings, watching the same webinars, listening to the same podcasts? There is a balance between consistency of approach and curiosity about news things.

Whatever your age there will  still be the opportunity and the need to develop your skills. Just dropping your use of the word digital will not be enough to ensure your contribution remains relevant.

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I help businesses to develop and grow by delivering high quality, interactive and tailored training workshops that give managers & business leaders the knowledge, skills and confidence to build their services, brands and people to achieve greater success.

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