Developing Financial Talent for the 4th Industrial Revolution

Source: WEF

Digital Revolution

Convergence of Digital and Physical Worlds

Physical Revolution

Features of the 4th Industrial RevolutionFeatures of the 4th Industrial Revolution

Digital technologies that will transform finance

Financial Innovation Through Digital TechnologyFinancial Innovation Through Digital Technology

Source: Nomura, Hana Institute of Finance

We Are Here!

IT FacilitatorIT Facilitator

Advancements in digital technology

Impact onFinancialServices

Online P2P loan service, launched in 2005

Paypal customers have grown rapidly since 1999

API-based bankBitcoin launched (2009)

Financial institutions

Personal computer Internet

Financial institutions Financial institutions Non-Finance Financial institutions Non-Finance

Mobile IoT

Service provider

Digitaltechnology

Overseas remittance service, launched in 2011

API

API….

API

APIAPI

APIs ExpandAPIs Expand

RebundlingRebundling

UnbundlingUnbundling

2.93

3.26

2.57

2.89

1.8 1.82

US EU

Pre-crisis 2015 2025

Projected Cuts to Full-Time Financial JobsProjected Cuts to Full-Time Financial Jobs Tellers Are Slowly DisappearingTellers Are Slowly Disappearing

Source: Citigroup

Impact of Automation on Financial Services (by Job Type)Impact of Automation on Financial Services (by Job Type)

Source: Mckinsey & Company

Impact of Machine Learning on Bank Settlement ProcessingImpact of Machine Learning on Bank Settlement Processing

Source: Mckinsey & Company

15 min

Creative, Innovative Work

Repetitive, Routine Work

AI, Robotics Human

Employees

Alliance partners, contractors

AI, Robotics

Tasks that require a human touch,

creativity

Non-routine tasks that require some

level of insight

Routine cognitive or manual work

Types of work Who/what does the work

Employment Outlook and Skills Stability (By Industry)Employment Outlook and Skills Stability (By Industry)

“Skills stability”: The degree to which, by the year 2020, particular occupations and job types are expected to require competence in new skills that have hitherto not been part of that occupation’s core skill set today

Source: WEF, ‘The Future of Jobs’, 2016

Demand for Skills in Financial Services (2015 versus 2020)Demand for Skills in Financial Services (2015 versus 2020)

Skills Definition 2015 2020

Complex Problem Solving Skills

Developed capacities used to solve novel, ill-defined problems in complex, real-world settings 35 39

Social Skills Developed capacities used to work with people to achieve goals –coordination, persuasion, instructing, negotiation 32 23

Process SkillsDeveloped capacities used to understand the points being made and monitoring performance of yourself, other individuals, or organizations

36 34

Systems Skills Developed capacities used to understand, monitor, and improve socio-technical systems 23 22

Resource Mgmt. Skills Developed capacities used to allocate resources efficiently 20 20

Technology Skills Developed capacities used to design, set-up, operate, and correct malfunctions involving application of technological systems 5 16

Cognitive Abilities Abilities that influence the acquisition and application of knowledge in problem solving 15 23

Content Skills Developed capacities used to communicate information and ideas in speaking, writing 22 24

Physical Abilities Abilities that influence strength, dexterity - -

Source: WEF, ‘The Future of Jobs’, 2016

Creativity• Apply resources (knowledge, data, technology) to

create new business models, products/services, knowledge, and ways of working

• Analyze and evaluate information in the digital environment really explicitly

• Use logic and reasoning to identify strengths and weaknesses of different solutions and approaches

Digital Literacy Critical thinking

Collaboration• Communicate information and ideas effectively

• Work collaboratively with peers, experts, or others employing a variety of digital environment

Attract Develop

Operate Engage

Shifting demands on the workforce

PredictDigital Technologies

Changing business model

1

2 3

4 5

5 Steps to Manage Talent

1

Traditional Capabilities Digital Capabilities

New Talent Portfolio for the Digital FutureNew Talent Portfolio for the Digital Future

Digital Business

Digital Marketing

Digital Dev.

Advanced Analytics

Digital transformation

Streamlined and automated

fulfillment processes

Targeted digital media

Digital customer lifecycle

management

Marketing automation

Digital product management

Customer centric

experience design

Omnichannelexperience

design

Comprehensive data ecosystem

Robust analytics and

data infrastructure

Business intelligence

Operational excellence enablers

Business Strategy

Financial Mgmt.

Risk Mgmt. Under-writing

Product Mgmt. Pre-Sales

Sales Customer service

27% of Goldman Sachs’ staff work in technology

1

FIs Recruit Tech Talent from Silicon ValleyFIs Recruit Tech Talent from Silicon ValleyGoldman Sachs’ Tech Talent RatioGoldman Sachs’ Tech Talent Ratio

9,000

33,000

9,1996,897

3,638

GS Facebook LinkedIn Twitter

Engineers Full-time emplyees

Source: Business Insider, Goldman Sachs is a tech company, 2015

People are changing…

•They want work that is interesting and meaningful

•They want to work for companies that are open and innovative

•They want personalized careers that ignite their passions

2

Why today's most promising young people are choosing to work in tech instead of finance

45

17 15 1410

4 3

The popularity of each industry as a career choice (%)Millennials, Gen Z

2

Create a Talent-Friendly WorkplaceCreate a Talent-Friendly WorkplaceRedefine the Recruiting StrategyRedefine the Recruiting Strategy

1. Reinvented EVP (Employee Value Proposition)

2. Built an engineering recruitment team- Hired a former executive of Square Inc. to recruit tech talent

3. Raised compensation levels- Offer higher entry-level pay packages to compete with tech giants

4. Worked to make employees happier- Develop wish lists to raise the satisfaction levels of engineers

(better hours; casual dress code; larger, curved computer monitors)

• Created a Silicon Valley-like work environment separate from the more traditional culture of the bank

• Appealed to programmers, data scientists, engineers, etc.• Adopted a casual dress code• Offers in-office chefs, exotic retreats and benefits extending to

employees' pets

J.P. Morgan established technology hubs for millennial tech talent

Goldman Sachs redefined talent recruiting practices to lure young talent

Fintech knowledge is not a “nice to have,” but an essential asset for anyone working in financial services

FS professionals are bluffing about their digital skills without understanding their meaning – Blockchain, AI

94%

3

Source: FINTECH Circle Institute

22%Putting off developing digital skills out of fear that it’s too late to build them

Lack of training for digital skills within financial services organizations

69%

3

Digital Transformation Learning ProgramsDigital Transformation Learning ProgramsTalent Development FrameworkTalent Development Framework

Day 1 Day 2 Day 3 Day 4 Day 5

Workshop to adopt digital working methods

Hackathon to create prototype mobile apps with startups

DBS create ‘triple-E’ framework for digitalizing their workforces

Using action learning programs to develop digital mindset

AXA redefine systematic learning curriculum for digital transformation

[ In-house Digital Academy ]

[ Hackathon program ]

• Offer extensive programs covering IT skills, digital mindset & culture

• Apply emerging learning techniques –e.g., gamification

4

Traditional Organization

Hierarchy

Command & control mechanism

Silos between departments

Digital Organization

Decentralized, simple layers

Autonomy based on personal responsibility

Network-based flexible structure

4

ING’s new agile organizational model has no fixed structureING’s new agile organizational model has no fixed structure

ING builds its organization to adapt rapidly and steer itself in new directions

5

Customer-centricity Experimentation

Collaboration Agility

Innovate ContinuouslyInnovate Continuously

DigitalCultureDigitalCulture

• 360-degree view of customer• Outside-in approach

• Risk-taking culture• Trial & error• Failing fast

• Teamwork• Information sharing • Networking across boundaries

• Constant adaptation to change• Real-time decision making

Thank you