Skills gap in the Indian banking sector

Mobile banking and the digital revolution have changed the face of banking in India. The Covid has further intensified this evolution. Bankers are no longer expected to be just good bookkeepers or cashiers or even customer service agents. If a customer needs to withdraw money from her bank account, ATMs have long become the default. But now, with the advent of UPI and mobile payment solutions like GPay, even the need for cash has all but disappeared. If a customer needs to transfer money to a colleague or buy household items online or pay school fees, it is again rare for a customer to walk into a bank branch and ask for help from a official. Today, most banking transactional requirements have more or less migrated online and are self-service. In fact, banks have further developed this channel and now also sell their products online. From savings bank accounts to fixed and recurring deposits, online investments and mutual funds, retail loans, such as personal loans, are currently sold online, some even primarily.

So what are today’s bankers doing? On the one hand, they must be digital evangelists, guiding their customers to meet their banking needs using one of the online solutions provided by the bank. This role for bankers is particularly critical given the risks associated with digital fraud and the trust that the common man always has in the security of his money with the bank. Despite its importance, this is probably less of a skills challenge given that today’s generation is far more digitally native than at any time in the past.

However, the critical gap in the education and training of our banking aspirants is their need to have a fuller understanding of the range of banking and financial products and more importantly how they fit in with the needs of their clients. at different stages of their life. Most Indians today have a basic savings bank account. They also have a basic understanding of fixed deposits, even recurring deposits, and most retail lending products. But most clients need help when it comes to other forms of investments in mutual funds or stocks or even various government programs such as PPF, Sovereign Gold Bonds or NPS. Similarly, clients will benefit from advice on many aspects of financial life, such as the need for life, health and other forms of insurance, retirement products, complex products such as ULIPs, currencies, corporate finance, trade finance, cash management solutions and other complex activities. Needs.

The penetration of financial products in our country is far below global averages, which has a negative impact on both the financial freedom of our people and the economy. On the other hand, it is a huge market opportunity for banks and other financial service providers to increase penetration, expand the market and improve profitability. Given the important position that banks have in a predominantly poor and developing economy, it is also very, very crucial to do this all the right way, without any wrong selling.

Besides the great need to hire these financially savvy young bankers, the other equally important challenge is to hone the existing workforce that was needed when banks were still largely transaction hubs. This is a great need in older banks. Another visible change concerns the evolution of digital marketing, data analysis and reliance on virtual channels of interactions. There is a growing need for remote relationship managers who manage engagement with their customer base primarily over the phone. Anyone who has done both phone and face-to-face sales will tell you that distance selling is by far the most difficult to manage.

So how will this skills gap be filled? While the best banks have the knowledge and the people to meet this challenge, often the best companies are not interested in a training career. The problem may be even greater for many small banks. With higher attrition rates similar to what is seen in the tech world, banks’ motivation to invest in training is also not high. This brings us to our higher education system which continues to struggle to produce graduates with employable skills whose curriculum falls far short of what they need to know to start their careers. Clearly, all partners in this ecosystem will need to come together and work towards a more sustainable talent solution.

In the meantime, it’s important for today’s young banking aspirants to look beyond their formal credentials and add the right skills to their resumes.



The opinions expressed above are those of the author.


Michael J. Birnbaum