How HR is driving digital transformation in banking

THE adoption of digital banking transactions among Filipinos continues to accelerate even when face-to-face dealings are already back. According to 2021 Financial Inclusion Survey (FIS) of the Bangko Sentral ng Pilipinas (BSP), 60% of those with mobile phones and internet access in 2021 performed financial transactions online, such as fund transfers and payments, jumping from 17% in 2019. The survey also showed that the number of Filipino adults with financial accounts increased from 20.9 million in 2019 to 42.9 million in 2021, growing by more than double. The convenience of transacting online truly shifted the financial behavior during the pandemic, with more Filipinos saving and using online banking and digital payments.

The consumer today is truly digital! But is the banking industry keeping up with the Filipinos digital transactions appetite?

In my conversations with bank executives, the biggest challenge of the industry is how to augment and retool its workforce as fast as how Filipinos are consuming digital banking services. The skills of bank employees need to stay abreast with digital technologies and tools, digital sales and marketing, and new ways of delivering services. Banks now need capabilities in cybersecurity, digital product design, user experience, and data science, which are not easy to acquire or develop.

To satisfy the digital demands of customers and compete with fintech companies to remain relevant, banks need to rethink talent and transform, and do so quickly. It’s not an easy road ahead. But not an impossible one either.

According to a global study by Boston Consulting Group, a typical bank today employs up to 90% of its workforce to run day-to-day operations, with only 10% dedicated to change and innovation. This talent and skills crunch will be further aggravated by the entry of six digital banks, where three of them — Overseas Filipino Bank, Inc., Tonik Digital Bank, Inc., and Maya Bank, Inc. — are now fully operational, while the rest — UNObank, Inc., UnionDigital Bank, Inc., and GoTyme Bank — are operating under limited capacity prior to fully launching their services to the public.

Therefore, human resources technology (HR tech) is becoming an important part of the incumbent banks’ digital transformation agenda. One such HR tech platform is a human capital management (HCM) software. This allows HR departments to automate key tasks, providing seamless access to data and information, and facilitating the creation of analytics-based insights. In short, HCM technology can enhance a bank HR team’s effort to attract, engage and nurture their most critical resource — talent.

With the analytics-based insights from an HCM platform, HR teams can handle many of the functions and processes needed to develop the capabilities needed to meet the demands of digital customers. This is going to be the next wave of digital transformation across the banking industry.

To unpack what HCM excellence means today and how HR leaders can extract the best out of HR tech platforms, Darwinbox — the number 1 rated HCM on Gartner and trusted by JG Summit, Shakey’s Pizza, Robinson’s Bank and other leading enterprises and conglomerates in the region — is organizing a roundtable for Chief Human Resources Officers from the Banking industry. The by-invitation-only roundtable with Nic Lim and the Darwinbox leadership team will be conducted on Sept. 14 at The Gallery by Chef Chelle in Bonifacio Global City.

Reynaldo C. Lugtu, Jr. is the Founder & CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Chairman of the ICT Committee of the Financial Executives Institute of the Philippines (FINEX). He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com