One of the key attributes of many of the firms I’ve talked to about doing digital transformation is that there are lay-offs but, whenever possible, these banks support people to change careers. Sure, there may be significant lay-offs if it is a heavily branch oriented bank as getting rid of thousands of branch staff is clearly on the agenda, but generally the banks try to retain people wherever possible. After all, they recognise that these people have invested years in the bank, have years of experience, have strong knowledge of the banks’ culture and operations, and want to keep and encourage their people, not just lay them off.
This is because the digital transformation program is not all about getting rid of staff but it is more about improving the customer experience, and doing this means bring all the people with you. Creating happy customers requires happy people and how can you have happy people if they are being made redundant every day? How can you create a motivated work environment if there’s blood on the floor?
These are challenging questions, but the consistent theme of banks transforming is that they don’t get rid of staff, but they reskill them. They turn traders into coders, and they turn customer service staff into social media staff.
A good example I encountered was in one bank where everyone was encouraged ot visit the innovation lab. Once they arrive at the lab, they get to see all the new ideas being developed as well as being offered a chance to reskill. If you take that chance, you are then offered a smorgasbord of opportunity from learning to code in Python to being trained in how to respond to customers on Facebook and Twitter. If you take that opportunity, then you have to commit and this may be as much as two hours a day for some courses. But the bank is keen to allow people to change career direction and support that change, not just lay people off because they are surplus to requirement.
Now this is challenging, as I’ve seen some pretty dramatic changes in the last two years. For example, I put the numbers up the other day that JPMorgan Chase had reduced staff by a third in the last two years, and I’ve seen that in many other banks. To put that in context, a football stadium size chunk of people has been taken out of the business. Who are these people? I’m not sure, but I think that former CEO of Deutsche Bank John Cyran hit the nail on the head. Talking at a conference where I was also a keynote two years ago, he said:
“In our bank we have people doing work like robots. Tomorrow we will have robots behaving like people. It doesn’t matter if we as a bank will participate in these changes or not, it is going to happen” and if you “spend a lot of time basically being an abacus”, then your job will disappear.
This means the people leaving the bank are those who cannot or will not reskill but, almost consistently, the banks that are succeeding in digital transformation are those who motivate and support their people to reskill. I’m not saying that these banks are charitable institutions, keeping everyone around even if they’re not needed. But they are banks making hard choices, supporting people to reskill when possible, and showing the door to those who cannot.