BrazilSolving the talent shortage in banking through a skills-powered approach
The banking sector in the Middle East has a dire shortage of talent, while at the same time, talent profiles and requirements are shifting to meet the tech-savvy and ever-evolving nature of the sector. Robert Richter, Financial Services leader of Mercer, outlines how banks in the region can better navigate the talent shortage by embracing a skills-powered approach.
Approximately 150 banks currently operate in the vibrant GCC banking sector. Their disparate maturity levels mean they are grappling with a breadth of different challenges, including managing profitability, maximizing efficiency, providing interpersonal customer experience, cyber security threats, regulatory scrutiny and digitalisation. But one common challenge across the sector is the need for talent.
According to Mercer’s 2024 Global Talent Trends, a staggering 50% of HR professionals in the Middle East see skills shortages as a top threat to their businesses in the coming year. Banks are trying to understand, define, grow and attract the talent they need to realise their commercial ambitions and the need to find the right skills poses a consistent hurdle.
This shortage is likely to be further exacerbated by accelerating advances in technology. In the latest Future of Jobs Report from the World Economic Forum, employers surveyed estimate that 44% of workers’ skills will be disrupted by technology in the next five years, and six in 10 workers will require additional training before 2027.
New fintech skills are required
Traditionally dominated by financial experts with a foundational understanding of technology, the financial services sector now requires people with a blend of sophisticated financial acumen with advanced technical proficiencies.
Key transformations in the fintech skills landscape include a pronounced shift from traditional financial modelling to data-driven insights. This has elevated the demand for professionals adept in machine learning, artificial intelligence (AI) and big data analytics. Concurrently, the imperative to safeguard sensitive financial data has intensified the need for cybersecurity experts with a deep understanding of threat intelligence and risk mitigation.
The emergence of blockchain technology has created a new skill requirement, with expertise in blockchain development, smart contracts and distributed ledger technology becoming highly sought after. Additionally, the proliferation of digital payments and cryptocurrencies has amplified the demand for professionals skilled in payment processing, digital wallet systems and the complexities of cryptocurrency trading and regulation.
Peer-to-peer (P2P) lending, a disruptive fintech innovation, has rapidly gained traction across the Middle East. This surge is driven by the region’s burgeoning entrepreneurial ecosystem, coupled with a growing demand for alternative financing sources. As P2P platforms facilitate direct lending between individuals and businesses, they bypass the constraints of conventional banking systems.
Navigating the intricate and dynamic regulatory environment demands professionals with a keen understanding of cultural nuance, financial regulations, compliance frameworks and risk management. As banks vie for market share, the ability to design intuitive and user-centric digital experiences has become paramount, driving the demand for UX designers and customer success specialists.
The generational gap
The Middle East is experiencing a demographic ‘youth bulge’, which occurs when young people make up a disproportionately dominant part of a population. That large and hyper-connected youth population has hugely different expectations of banking capabilities from the more mature executives who are making directional decisions.
Digital natives expect an engaging and seamless experience while they bank from anywhere, at any time. The younger customer’s loyalty is capricious, but the cost of acquiring them is high, so financial institutions are always trying to meet their needs. They do so while simultaneously satisfying their more conservative older customers, who hold more wealth. Extra resources and people are needed to bridge that gap.
The generation gap within financial institutions is also creating talent retention challenges. As baby boomers retire, Generation X and millennials are increasingly assuming leadership roles. The transition to executive management can be demanding. And while younger generations bring fresh perspectives, technological proficiency and more acceptance of work-life balance practices, they might find it challenging to establish organizational cultures that engage everyone – from boomers to Generation Z.
Talent retention challenges can also stem from generational differences in communication styles and values. The gap can create friction within the workplace, necessitating changes to employer value propositions as well as further investment in leadership and behavioural skills.
Finding a solution
On a unique foundation of regional wealth, economic growth and government support, the GCC banking sector is replete with opportunities. To maximise that potential, GCC banks need to solve their talent challenges. They can do so by becoming skills-powered organisations.
A skills-powered organisation is one that systematises work into projects, tasks and gigs and deploys employees to opportunities based on their individual skills and experiences. It’s a much more fluid mode of work than traditional role-based approaches. Employees in skills-powered organisations are able to demonstrate and acquire a broader scope of experiences. They also have better and more democratic access to opportunities.
Skills-powered banks are:
- Interpreting how the future organisational requirements translate into future skills required in, for example, digital payments, UX, customer intelligence, programming languages and cryptocurrency.
- Using skills to infuse multi-disciplinary teams that can move quickly and adapt to changing customer demands such as blending product development, marketing, customer intelligence and UX skills to build and iterate financial products.
- Systematically using reskilling and upskilling pathways to facilitate core transitions such as retail to omnichannel, AI-enabled business processes and personalized banking financial products and services.
- Continuously re-designing jobs to ensure they maximise the use of emerging technologies and are adopting skills that provide a competitive edge in the market.
Aside from addressing an organisation’s talent needs, a skills-powered approach offers multiple benefits for both employers and employees in any sector. Employers can optimise overall labour costs and build stronger recruiting and retention capabilities while increasing workforce productivity and agility. For employees, additional upsides are more transparency around career progression requirements as well as improved training to acquire the skills needed for the future of work.
Banks are an essential player in economic activity as well as a fast-moving microcosm in which we can see how skills-powered organizations can succeed.
