Many things can worry a Treasurer at night, however, one of my biggest concerns isn’t funding or financial market moves. My worry is whether banks can continue to attract their share of talented staff. Competition for talent has always been tough among banks, but it is getting tougher with the rapid development of parallel service providers.
Today, non-bank and financial technology companies are providing customers with the service they want, and at times appear better positioned to meet the needs of the future. It is a fast and dynamic industry and promises young, talented citizens with a fulfilling career. The risk for some banks is that they get stuck with the same staff base, are unable to adapt and respond to these challenges, and become resigned to a role more like a utility company.
Recently, I had the opportunity to attend the induction programme for our new class of Management Associates. Looking across the room, full of bright, young UAE Nationals, I found myself wondering why people would choose to be a banker in this day and age; given all of the challenges. If you talk about banking to veterans in the industry, who have been bankers for more than 25 years — some of them will reflect on the glory days of the past. Some of them will also mention how hard business is now, under the mountain of rules and compliance obligations. Competition is rampant and it seems that every week brings a new regulatory challenge. Cyber criminals constantly prowl the cables searching for vulnerabilities; with a recent report by Juniper research predicting that the cost of data breaches will increase to $2.1 trillion (Dh7.7 trillion) globally by 2019. Another challenge is that customers are better informed, sharper and willing to change banks or share their business when presented with a better deal.
Yet, despite this dim reflection, before me was another group of fresh faces at the induction of our MA programme — an encouraging sign, that young people still see banking as a worthy career. However, as mentors, we can’t rest on our laurels. We need to retain and extract from them, the passion and ideas, which will keep banks competitive against the increasing range of providers challenging us, for a share of the pie.
Guiding the next generation
This recent influx of new young staff don’t carry the baggage of the global financial crisis and they have no “good old days” to reflect on. The challenge is ensuring that they don’t become overly influenced by those of us who have. Understanding lessons from the past is fine, but shutting down creativity will drive them away. At our disposal is a generation that has grown up with an electronic device in their hand, transacted most of their life without cash and are more prepared than any previous group to challenge the status quo.
It’s important to break down the barriers that could restrain these young stars from running free of bureaucracy, and creating the next great thing. How can we safely navigate them through the myriad of processes and controls, creating an environment where it is healthy for them to take risk and experience failure?
Continuing on the innovation path
The concept of reducing controls and lifting restrictions doesn’t fit too easily into the way most banks think today. It seems, unfortunately, that for some institutions, the response to failings of the past may have encroached on their ability to be creative. However, some banks are changing this and even appear to be doing it very well.
I am heartened that initiatives such as the creation of innovation labs, within forward thinking organisations, are willing to extract staff from their daily roles to incubate new ideas. Being brave enough to take measures like this, will, in my mind, differentiate the future banking champions from those destined to become utilities.
Damian White is Treasurer at Noor Bank. The opinion expressed here is his own and does not necessarily reflect that of Noor Bank or the newspaper.