Five predictions for banks as they prepare for new reality ways of working

It’s time to decisively accelerate workforce reshaping, increased automation, and digitization.

Evan Metter

Evan Metter

Principal, Human Capital Advisory, KPMG US

The pandemic proved that working in a different way is possible. To sustainably continue, financial services institutions and specifically, banks, are being challenged to think about their organization’s culture differently in order to decisively accelerate shifts that were already happening – workforce reshaping, increased automation, and digitization.

KPMG surveyed more than 350 Americans in financial services aimed at determining changes in perceptions, attitudes and preferences in the workplace during COVID-19. The following are some of our predictions for banks as they settle into the new norm. 

  1. Working models will change permanently as corporate real estate is also reimagined
    Significantly higher degrees of remote working than pre-crisis will persist in a hybrid model. We are working with two leading financial service firms at this very moment to establish a policy framework and then assess their current roles to determine what roles can/should operate as fully remote perpetually and the relationship of the remaining roles to a physical location. It is far from a binary decision and it is complicated by the compliance requirements inherent to the work some roles perform, the culture of the organization and the ability to measure performance. In Work anywhere, together, KPMG estimated a potential savings of up to $10,000 per employee per year, making the attraction of reducing real estate clear. However, organizations must be careful that they are thinking of long term outcomes and liabilities as they shape their policies and programs. We’ve found that, like so many things that there are often unintended consequences.

    On the worker side of the equation, while 33 percent of financial services workers are ready to trade in their home office and return to a real one, the remaining workers (67 percent) want some level of flexibility – whether it’s a hybrid model of a full-time virtual office. For financial services workers, the ability to individualize their working hours would be the most valued benefit of a flexible work model. That said, organizations are now re-engineering onboarding and training programs to address the isolation that can lead to skill atrophy and reduce internal mobility and growth. The short term adrenaline rush that is getting so many workers through this interregnum will not persist as we transition to a new normal.

  2. Offshore service center disruptions will lead to a changed approach
    The severe impact of lockdowns on offshore service centers in locations such as India – which were only equipped to function with staff on-site – will lead to a re-evaluation. Banks will work with more than one service provider to spread risk, bring more activity back on-shore in managed service arrangements, and drive up levels of automation and digitization.

  3. Automation will be used more widely
    Automation will be embedded more widely across the enterprise for repeatable, cognitive tasks – freeing staff up to focus on “moments of value” that enhance the customer experience. No surprise, 43 percent of financial services workers say they are worried about technology replacing their job. To alleviate these concerns, employers will need to invest in skills of the future and do a better job of communicating with employees how they can equip themselves to thrive in the new environment. Increasingly, the tasks that staff perform will be evaluated in terms of their upstream and downstream impact on the service delivered to customers.

  4. Leadership and management skills will shift
    In a more distributed working landscape, the capabilities and attributes that characterize highly effective leaders and managers will change. With less frequent physical proximity to teams, and fewer “hallway” moments, leaders need new kinds of skills in order to motivate team members remotely and be able to read and understand how people are reacting and responding to objectives, targets, and feedback on performance. The sensing ability to synthesize the new “signals” will be of prime value.

    The organizations that began to embrace the methods and build capabilities around workforce shaping before the pandemic are ahead in leveraging this opportunity to accelerate changes in workforce composition, attraction, retention, and development policies from both a physical/geographical perspective. They are also most likely to be ahead on shaping the employee experience and understanding if they have the level of inclusion and diversity necessary to set themselves up for future success. While American workers say their organization has a clear path to address workplace inequality, 70% of financial services workers say their organization should be doing more to address inequality. Some 65 percent also say that the leaders at their organization are part of the diversity and inclusion problem. There may be some ossification right now of labor mobility overall, but the most impactful contributors are still driving their careers forward and are looking to do so in environments that are inclusive, equitable and high-performing.

  5. Investing in the right support and training for staff in a challenging era will be key
    With challenging economic conditions likely to persist, banks will need to significantly invest in supporting their people. Upskilling or re-skilling may be required, in part due to lower levels of external recruitment and in part due to the more remote and digital environment. A focus on ensuring staff are aware of cyber security protocols and best practices will be important, as will investment in collaboration platforms that are highly cyber secure. Mental health and wellbeing support will be another crucial element due to the new conditions and dynamics in uncertain times.

Take action now

Leverage what your organization has learned from the pandemic. We’ve been working with a range of organizations on responses. With some we are writing playbooks based on the present experience to prepare for the next disruptive event – they see past as prologue. With others, they are focused on catching up and building the capabilities in workforce shaping and re-thinking the employee experience that they need to address the pressing questions of today. In this age of uncertainty and so much anxiety, one thing has become clear: the capabilities that were relevant pre-pandemic are now increasingly more essential. It may feel to some like the world is frozen and waiting this out, but that is not what we are seeing in our data and our work with financial services firms. The work being done now is going to widen the gap between the first adopters and the laggards. As key talent starts to decide where to spend the next chapter of their post-pandemic career, the choice between firms will be starker than it was before.

Uncover more insights from the KPMG American worker | Summer 2020 pulse survey.