Is there a Digital Skills crisis for Banks?

The digital skills gap is making waves across the banking sector, and both institutions and their employees are feeling its effects. In a recent survey conducted by FDM Group in the UK, a staggering 91% of respondents expressed the need for improved digital skills to effectively implement technology within their organisations. This underscores the pressing demand for more opportunities in up-skilling and training, ensuring that businesses can fully harness the potential of emerging technologies.

The World Economic Forum has also taken note of this issue and released strategies aimed at helping businesses close the digital skills gap—a task made all the more urgent by recent revelations from the International Data Corporation, predicting that digital transformation investment will soar to a remarkable $3.4 trillion by 2026.

Today, banks heavily rely on technology to remain competitive and enhance the customer experience. However, without a workforce that possesses the essential digital skills, banks risk falling behind in the ever-evolving technological landscape, potentially leading to a loss of competitiveness. Employees who can design and maintain user-friendly digital interfaces, develop mobile apps, and manage online services are indispensable. A shortage of these skills can result in outdated and cumbersome customer experiences, ultimately leading to customer dissatisfaction and attrition. It is paramount to emphasise that advanced digital skills are not only pivotal for customer satisfaction but also essential for robust cyber security and regulatory compliance in this increasingly digitised industry.

The Positive Impacts of Investing in Digital Skills Include:

1. Innovation and Product Development: Banks require digital skills to innovate and create new financial products and services. Without these skills, opportunities to offer cutting-edge solutions aligned with evolving customer needs and market demands may be missed.

2. Operational Efficiency: Digital skills are crucial for automating and streamlining internal processes. Banks lacking these skills might find themselves mired in manual and inefficient workflows, leading to increased operational costs and reduced profitability.

3. Data Analytics: Data-driven decision-making is a linchpin of the banking sector. Digital skills are imperative for analysing large datasets, uncovering trends, and making informed business decisions. Banks without these skills may forfeit opportunities for data-driven growth and optimisation.

4. Talent Retention and Recruitment: The digital skills gap poses challenges in recruiting and retaining top talent. Skilled professionals are in high demand, making it increasingly difficult for banks to attract and retain individuals possessing the requisite digital competencies.

5. Adaptation to Market Changes: The financial industry is marked by rapid changes, including shifts in customer preferences and the emergence of new technologies. Banks with a digital skills gap may struggle to adapt to these changes and risk falling behind more agile competitors.

To address the digital skills gap, banks can consider investing in comprehensive training and development programs for their existing workforce. Collaboration with educational institutions and actively seeking out individuals with the necessary skills in the job market can also be instrumental in bridging this gap. It is paramount for banks to remain relevant, secure, and competitive in the digital age.

The Digital Skills Passport offers an effective means of providing personalised learning and development opportunities while supporting skills-first discovery for internal talent identification and promotion—an inclusive and pro-diversity approach.

The key to success lies in ensuring that the C-Suite, Heads of Learning and Development, Diversity, and Recruitment have visibility on where investments are required to bridge the skills gap. Measuring skills mobility ROI in real time is essential to future-proofing digital skills and reaping the benefits.

In conclusion, addressing the digital skills gap is not just a matter of staying competitive; it's about future-proofing and thriving in the digital era.