Every year, Cornerstone Advisors conducts a survey of community-based financial institution CEOs that asks what their top concerns are. The 2022 survey produced the biggest one-year change we have ever seen. A full 63% of executives identified the ability to attract qualified talent as a key concern, up from just 19% the year before.
No doubt this focus on talent is at least partially the result of the sheer number of new topics requiring industry expertise. Think digital currencies, embedded finance, BaaS, buy now pay later, gen 3 core systems, artificial intelligence and machine learning… How many of these would have been on any FI’s training curriculum even two years ago? Yet every one of these are now topics that boards are asking about in terms of the FI’s strategy.
However, attracting qualified talent won’t be enough. Every financial institution has knowledge and expertise that can only be developed internally, simply because the knowledge build is so unique to the industry, including:
In short, there is no university diploma that can be obtained for many areas of the bank – and, in my opinion, the further you get into the back office, the truer this is.
At Cornerstone, we’re observing a need to focus on the “build or buy” of key skills and knowledge at the bank for the next generation of leaders and managers. Some thoughts about what we see working:
Everybody will have a different list, of course, but four areas where we consistently see the biggest “build” need are:
In all of these areas, and in other key identified “build” areas, there is one big overriding theme: these people will need to have a deep understanding of how banking works – P&L, delivery, money movement, etc. – combined with strong knowledge of the peculiarities of the markets, products, and systems at the bank.
Most leaders at FIs can point to on-the-job training they received early in their careers that has been the basis of their success. The apprenticeship model has worked for centuries and still works well at the modern bank. One key to future success will be the formalization of this approach in the career pathing and goals of both the teacher and the pupil.
On the one hand, leaders at FIs would correctly note that much of the “build” effort will require in-person, face-to-face training. On the other hand, in a recent Accenture study, over 60% of employees surveyed felt their productivity had increased due to working at home, and only 13% definitely felt it hadn’t.
Whether it is a new hire or re-skilling of an existing employee, the message of “five days in the office” won’t sell. Getting the right amount of face time for development while giving the new generation of stars an appealing office/home work-balance will be a key challenge for HR groups going forward.
A clear, disciplined, focused plan for development of the next generation of talent is more crucial than ever. There are times when buying talent just won’t be an option due to cost, availability, or the risk of retaining those same people. The good news? Some of the best opportunities might be right in front of you in your existing workforce.