PwC and IBBM study finds that banking trends are reshaping the face of talent in Malaysia

Talent makes the competitive difference

KUALA LUMPUR, 16 June 2014 - Four trends are redefining the talent requirements in the Malaysian banking industry, forcing banks to review their talent management practices to remain relevant. Regulatory changes, the radical shift in technology, an increasingly affluent group of customers, and their appetite for innovative products are driving banks to rethink their training channels and talent management strategies.

A study conducted by PwC Malaysia and the Institute of Bankers Malaysia (IBBM) titled “Study on talent and skills requirements for the banking sector in Malaysia” highlights what banks are doing to attract and retain the best talent in response to these trends. It also describes the areas which are facing talent shortages, and the way forward for banks in aligning their talent development practices to their corporate strategy as they grow and expand regionally.

“Banks are under increasing pressure to review their talent management practices and innovate across the entire value chain, or risk becoming irrelevant in this volatile marketplace”, said Kartina Abdul Latif, Senior Executive Director, who leads the People and Change practice at PwC Consulting Services Malaysia.

“Technology is empowering those who can adapt and flex according to the needs of the market, but it can also be a risk, particularly to those who are more cautious about change. But growth and comfort don’t go together. Those who are proactive in strategic talent management planning will wield a crucial competitive advantage over other industry players in our knowledge economy”, she continued.

Changing banking regulations are impacting the ways banks operate, develop products and engage with customers. 62% of respondents from investment banks stressed that the tightening of overall risk management measures is affecting their business in many ways. Talent across banks are expected to interpret risks (e.g. liquidity, credit, market, interest rates, foreign exchange and investment risks etc.) in relation to the various regulatory requirements, while developing products and conducting day-to-day operations.

There is also a clear business case for technology as banks are catering to an increasingly affluent population while serving a younger generation of customers. This diverse group of customers are demanding more value from their banking experience. Advancement in technology will see an increasing investment in digitised distribution channels and enhanced customer engagement through data analytics and social media.

67% of Retail/Commercial bank respondents highlighted the need for a greater emphasis on multi-channel integration. Talents need to understand how to implement new technologies, for example, online and mobile platforms, cyber security, data analytics, and social media as the very success of the customer engagement experience depends on the effective use of these technologies.

Banks are not only developing innovative products in response to these increasing demographic shifts; they are changing their ways to manage this new set of customers who have different expectations and values on investment. More than ever now, banks require talents with critical skills in cross-selling varied product offerings and the ability to apply complex customer analytics to understand this discerning group of customers.

However, despite the proactive steps taken to manage talent especially in the area of training, Malaysian banks are still finding it difficult to attract and retain the right set of talent.

Clearly, banks cannot afford to work in silos. In order to build the industry’s capabilities as a whole, banks have a shared responsibility to develop the next generation of talent, especially those who are entering the industry after graduation.

The study recommends the following avenues of collaboration including:

• Developing strategies to attract, retain and develop talent through specialised training in encouraging continuous professional development (CPD)
• Enhancing collaboration between banks and universities to develop curriculum and structured internships
• Establishing a dedicated banking institute as a platform to develop talent
• Developing talent through certifications from an independent certification body

While the focus is on specialised technical trainings to upskill talent, the study acknowledges that banks also recognise the need to invest in non-technical skills training to ensure that their talents are developed holistically.

“As talent proficiency in English is undoubtedly still the main lubricant for the conveyance of business on the move, there would be no limitations as to what talent can achieve in bringing their dreams and ambitions to realisation as long as they are successful communicators and innovative problem solvers who can generate workable solutions and resolve complaints. Ultimately employability skills and personal values are the critical tools and traits you need to succeed in the banking industry,” said Tay Kay Luan, CEO of IBBM.

The challenge is for banks to be agile, innovative and adaptable in rebuilding their organisation around the customer, with a view on the latest market trends, economic developments and regulatory requirements.

ENDS