The Most Important Resources in Digital Transformations Are People
Digitisation has become an integrated part of the financial sector, and that might mean fewer employees. However, lessons from the best digital bank in the world indicate that people must be at the centre of the transformation. Moreover, with a combination of employee training and national effort, the sector can become a job-creating stronghold.
The best digital bank in the world is The Development Bank of Singapore. That became clear last year, when Euromoney handed out its awards to various categories of banks. Moreover, when Finansforbundet (Financial Services Union Denmark), visited the bank last year, alongside a delegation of representatives from the Danish financial sector, it was revealed what makes the bank such a robust digital player: People.
With regards to digitalization we are at the forefront in Denmark, but Singapore is home to large banks like DBS, which was awarded the best digital bank last year. As an organisation, they think holistically to keep customers and employees at the core. They have recognised that human resources are the most important resource for the organisation,” says Sune Lundtoft, business policy consultant in Finansforbundet.
The financial sector is a great asset, partly because Denmark has a well established digital infrastructure, a lot of skilled employees and not least our innovative spearhead in fintech
Steen Lund Olsen
The bank has already trained a number of its traditional employees – like cashiers and advisors – to take on new roles within digital services. An example is the bank’s classic ATMs, which have been transformed into digital service stations that fulfill the bank’s promise of “Live More, Bank Less”. At those service stations, advisors can interact with customers virtually and issue credit cards on the spot. In that way, customers get much faster and more efficient service when contacting the bank.
Though Singapore is geographically far from Denmark, Lundtoft believes that, due to the similarities between the two nations, the latter can learn from the former.
“We are both relatively small nations and very export-focused countries, and we both have open economies that have to act proactively on the innovation arms race. We are conscious about the fact that we have to be curious about the changes happening in the sector – and act on the trends that affect our members in the end,” he says.
Developing the financial sector isn’t just about new technologies and digitisation. It’s also about customer solutions that require the skills of an actual human being.
Technology is coming – and creating new possibilities for people
Self-service, automation and robots are coming. Finance and technology are very much two sides of the same coin. The financial sector has experienced a 12 per cent reduction in the number of employees since 2008. That trend must change if the Danish financial sector wants to remain competitive globally.
“The largest resource banks have are their employees – and the example from Singapore shows that it’s also true in a digital bank. If aying off your way to growth is the strategy, I don’t think it’s sustainable in the long run. Long-term growth demands collaboration between human skills and technologies,” Lundtoft says.
Automation has found its way into businesses, and digital tools are making employees more efficient. Thus, the need for human value injection and skills is moving elsewhere. That’s one of the findings in a mapping of the financial labour market that Finansforbundet has made. This mapping shows that a combination of, and collaboration between, different skills – economic, social, cognitive, digital and personnel – will typically be required across job functions in the future.
“You don’t have to master it all, that’s clear, but digitisation creates new conditions and requirements for the employees. For that reason, we encourage our employees to be open, curious and up-to-date with the new opportunities that are constantly on the rise in the industry.
The skills of financial employees have great value both today and tomorrow and companies have to make use of it as a key asset – also in the future, which becomes still more digital,” Lundtoft says.
Humans will drive digital growth and innovation
It’s no law of nature that digitisation means fewer employees. Singapore has set a national goal of creating 5.000 new positions per year within finance – and fintech is a way to make the sector a national stronghold.
Finansforbundet has projected that fintech has the potential to create 10.000 new jobs in Denmark before 2025. For that reason, to strengthen innovation in the sector and support job growth, the union has co-founded ‘Copenhagen Fintech’, which is currently home to 60 financial entrepreneurs.
“Copenhagen Fintech is a great example of what demand-driven business policy and partnerships can be a part of creating – where public and private stakeholders collaborate to lift a very ambitious agenda in creating jobs and growth. We’re happy to participate as a union, because of the opportunities for job creation and growth. I don’t believe that Denmark should try to copy Singapore one to one, but we have to learn from their key findings in broad collaborations, targeted training and focused job creation. The financial sector is a great asset, partly because Denmark has a well-established digital infrastructure, a lot of skilled employees and not least our innovative spearhead in fintech. For that reason, it’s also important that the government creates the right frameworks and has the needed focus,” says Steen Lund Olsen, vice president of Finansforbundet.
Through an exercise initiated by ‘Danmarks Erhvervsfremmebestyrelse’, in which the business support system is being rethought and consolidated in a series of flagship industries, he thinks it has become obvious that finance and fintech should be prioritised as a significant cluster in Denmark.
New commission for entrepreneurship with people at the center
New fintech solutions and partnerships between established players and startups are becoming more widespread in Danish businesses. For that reason, it’s important that we create the necessary understanding between the two parties and how they can support business while developing employees.
“In the fintech scene, we often hear that there’s a growing demand for employees with a financial background and experience from the sector – because it’s employees who have the necessary insight and understanding of the infrastructure, development in the sector and, not least, customer understanding that newly established startups need. We need to be much better at understanding and taking advantage of those dynamics to create future growth and jobs in Denmark,” Lund Olsen says.
To learn more about the dynamics, Finansforbundet has established an entrepreneurship commission in cooperation with the organisation Akademikerne. In 2019, the commission will develop legislative proposals to help foster an attractive startup community in Denmark.
“As a union, we play a significant role in ensuring that development in the startup community has people and talents as a key focus point. We need to emphasise the urgency of prioritising topics such as the importance of interdisciplinary collaboration in startup teams; the relevance of smart capital; the gain from working with experienced mentors; the development, attraction and retention of qualified labour; and internationalisation. These are topics that have one thing in common: People are at the centre,” Lund Olsen says.
Member of the Danish parliament Mette Reissmann (S) is anchoring the initiative. The combined solutions will be presented and debated with politicians from different parties at Christiansborg at the end of 2019.