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 Revolution

Digital technologies

that will transform finance

Financial Innovation Through Digital Technology

Source: Nomura, Hana Institute of Finance

We Are Here!

IT Facilitator

Advancements in

digital technology

Impact on

Financial

Services

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 institutionsNon-

FinanceFinancial institutions Non-Finance

Mobile IoT

Service

provider

Digital

technology

Overseas remittance

service, launched in 2011

API

API….

API

API

API

APIs Expand

Rebundling

Unbundling

2.93

3.26

2.57

2.89

1.8 1.82

US EU

Pre-crisis 2015 2025

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

Source: Citigroup

Impact of Automation on Financial Services (by Job Type)

Source: Mckinsey & Company

Impact 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)

“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)

Skills Definition 2015 2020

Complex Problem Solving

Skills

Developed capacities used to solve novel, ill-defined problems in

complex, real-world settings35 39

Social SkillsDeveloped capacities used to work with people to achieve goals –

coordination, persuasion, instructing, negotiation32 23

Process Skills

Developed capacities used to understand the points being made

and monitoring performance of yourself, other individuals, or

organizations 36 34

Systems SkillsDeveloped capacities used to understand, monitor, and improve

socio-technical systems23 22

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

Technology SkillsDeveloped capacities used to design, set-up, operate, and correct

malfunctions involving application of technological systems5 16

Cognitive AbilitiesAbilities that influence the acquisition and application of

knowledge in problem solving15 23

Content SkillsDeveloped capacities used to communicate information and ideas

in speaking, writing22 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

LiteracyCritical 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 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

Omnichannel

experience

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

SalesCustomer

service

27% of Goldman Sachs’ staff work in technology

1

FIs Recruit Tech Talent from Silicon ValleyGoldman 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

1715 14

10

4 3

The popularity of each industry as a career choice (%)

Millennials, Gen Z

2

Create a Talent-Friendly WorkplaceRedefine 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 ProgramsTalent 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 structure

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

5

Customer-centricity Experimentation

Collaboration Agility

Innovate Continuously

Digital

Culture

• 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