Fintech continues to disrupt the financial services sector. A KPMG report released this summer found that global investment in fintech in the first half of 2018 had already surpassed total 2017 investment levels. Non-financial companies are entering the space becoming nimbler and more agile in the marketplace and focusing on different hiring criteria than traditional financial institutions.
In response, traditional financial services organizations are investing in fintech startups or acquiring their competitors outright in an effort to gain access to new technologies, gain the cutting-edge cachet of fintech, and achieve a modern makeover.
In this blog, we’ll uncover what’s impacting the digital transformation in the financial sector, along with what brands need to do to keep up.
Courting Customers and Employees
Branding is crucial in the fight for market share – not only to burnish customer perceptions of the financial institution but also for how current and potential employees perceive the brand. As traditional financial services companies deploy advanced technologies like AI and blockchain and explore new markets, they’ll need the best and brightest employees on board if they’re to compete successfully.
Banks adjusting to the digital revolution need to not only make inroads into the fintech customer base, they must also keep current customers satisfied. AI and blockchain can allow financial institutions to streamline service delivery and improve security. However, these organizations are acutely aware of how deploying new technologies may affect customers who value the service they receive at brick-and-mortar locations.
To accomplish the shift without alienating customers or potential hires, financial services companies will have to be conscious about how the moves they make affect their workforces and the consequences of those impacts. Maintaining a positive brand image requires careful attention to how workforce restructurings, employee communications, and alumni sentiment affect overall perception of the brand among customers and workers. While organizations have traditionally laid off employees in one area while recruiting new staff who have the technical skills or expertise in another area, financial institutions will need to consider alternatives to fill open positions while retaining a positive brand image. Redeployment, career development and upskilling will be among the types of HR initiatives that are being employed by employers of choice in this industry.
While reductions in force might become necessary, financial institutions continue to have a growing need for people who understand the sector. Career development programs can help financial services companies attract and retain employees with in-demand skills while retaining institutional knowledge. Development programs can also help employees who are transitioning from traditional roles to new and emerging positions.
Outplacement Services as Brand Insurance
Some industry experts predict that AI and automation will wipe out half of traditional banking jobs within a decade. Others point out that emerging technologies will require employees with the latest skills, so jobs will be created as well as lost. But in either case, financial services companies will need brand ambassadors rather than brand detractors.
So, how can banks ensure that they maintain a positive brand image in a time of significant change? Outplacement services can serve as brand insurance while financial services companies evolve to meet changing demand. Displaced employees who receive assistance during their transition to another job — those who receive both emotional support as well as practical advice — are much more likely to become brand ambassadors.
From a public relations standpoint, banks that are retooling to succeed in the 21st century economy must show that they have a vision for the communities in which they operate. Helping displaced employees land successfully is not only the right thing to do from an employee relationship perspective, it’s a positive step the bank can take to preserve its brand image.
Helping Employees Transition Helps the Company Transition
In a time of historically low unemployment rates, it can be tempting for company leaders to assume that displaced employees will find a new job quickly and bear no ill-will toward their former employer. While this may be true for some employees, individuals who have not been in the job market recently may find it hard to transition from a job they’ve held for years to a new role and possibly a new industry. At this juncture, it’s important to recognize that the relationship between employers and employees has evolved.
The ability to maintain positive relationships is a key factor in company success as individuals change jobs and careers more frequently. An employee who was displaced last year may return as a consultant next year. Employees acquire new skills and return to the same industry and even the same company in different capacities — perhaps as a prized customer or prospect whose business the company wants to win.
In the emerging employee relationship economy, companies must be mindful of their image with current and former staff to ensure that they can compete and win in the future. They can’t just rely on the marketing department to create an external brand image; the internal brand is important, too. Firms that make sure their workers know the company cares as much about employees when they leave as it did when they came on board will have an advantage in the future.
Offering services like career coaching will help employees who are transitioning to new roles within a company or seeking new positions outside the organization do so with greater success. To support new redeployment and career development initiatives, career coaches can work with employees to develop their strengths to match new responsibilities. When layoffs are necessary, coaches can help displaced employees create a personal value message that resonates in their target job market, assisting them with landing successfully — and sending the unmistakable message that their former employer is socially responsible.
As fintech grows, traditional banks will be competing for the same pool of talented employees. It may not be enough to outbid smaller firms in terms of salary for desirable talent; in a near full-employment market, employees have their choice of companies, and many are looking beyond salary at culture and brand reputation. A company that takes care of its people will rank higher on the list than a business known for cutting employees loose without adequate assistance.
Financial services companies should therefore monitor their internal and external brand carefully. Giving employees opportunities to redeploy so they can expand their skills and providing career development opportunities are ways to send a message that the company is a place where professional growth is possible. Outplacement services can serve as brand insurance, letting employees know that even if things don’t work out, the company will take care of them.