Technology vs. People in Banking
Recently, HSBC announced a reduction of 30,000 staff worldwide alongside a 3% increase in profits. As a Christian leader was telling me, technology is replacing people big-time.
Pretty much ever bank is going through some kind of cost-cutting regime. Lloyds recently announced 15,000 job cuts as their chief exec announced that they were losing money. Not to be outdone, profits at Barclays dropped by a third with warnings of 3,000 job cuts.
What does this mean for banks, their customers and the people that work for them?
It all means streamlining operations, withdrawing from certain channels and reducing discretionary spend on things like training, learning and development. For HSBC this staff cut represents 10% of their total workforce. For Lloyds it means selling 632 branches. For Barclays, their job cuts will be 3% of their global 145,000 workforce.
One of my banking clients recently said they cannot afford to bring BBB in to train their people, yet they needed our expertise around networking, referrals and winning switcher business. They asked for ideas on how they could access our methods and content through 'alternative means', namely webinars, teleseminars, online learning...
Technology is replacing people big time.
While we're all for that (it reduces our biggest cost, which is face to face delivery), there are some things that can only be done with people. Take relationships. People matter. Most banks would claim to have excellent service and customer-centric offerings. Many banks claim to be 'relationship banks' with people at the heart of their proposition.
But when it costs more and takes longer to process a cheque than on online transaction, customers are taken down the technology route. It costs more to have bank clerks, cashiers and tellers than it does to run call centres and online banking. Relationships are becoming stretched and more remote. People are less connected. It's cheaper. And it's often quicker. But is that always good?
Much of our work with banks is around winning switcher business - essentially poaching accounts from other banks. You can't do that with technology. It's a relationship-based thing. It's a reputation-building thing. It's more of an emotional than a logical decision to switch banks. And those kind of skills are best built face to face.
Our banking clients are pushing to professionalise and accredit their people in the many disciplines of their banking role. This includes KPIs around prospecting, networking internally and externally, selling and winning switcher business.
These skills do not come naturally to many technically strong banking professionals.
As costs are driven down, the concern reflects much of the general population in these austere times of cuts - will services go down with them? What will happen to people development and customer experiences?
The honest answer is that nobody knows. What is clear is that the banks that continue to invest in training their people in critical skills with measured ROI and expert partners will develop a competitive edge. And that will bring in substantial bank income through switchers, greater share of wallet and a more compelling customer proposition.
You do the math...