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    Navigating the Talent Landscape: HR Challenges and Solutions in Southeast Asia's Banking Sector

    December 22, 2023

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    Banking sector

    The Southeast Asian banking sector is experiencing rapid growth and transformation, necessitating a more tech-savvy workforce to compete with fintech companies. Banks should turn to HR Tech to streamline talent acquisition, development, and management while focusing on upskilling, diversity, and positive employee experience. HR Tech is pivotal in helping banks overcome talent challenges and remain competitive in the digital era.


    Southeast Asia's banking sector is poised to grow at a CAGR of over 18% between 2021 to 2031. This growth will be accompanied by rapid transformation driven by the rise of digital technologies, increased competition from fintech players, and the evolving demographic and regulatory landscape. 


    The growth and changing banking landscape would result in the need for a larger workforce that has more tech skills. These general trends and innovations in digital technology in the workplace create unique talent challenges for regional banks as they strive to attract, develop, and retain the skilled workforce they need to succeed in the digital era.


    Legacy challenges for the banking sector

    Outdated tech is the albatross around banks' necks, weighing down growth. McKinsey reports that only 30% of banks globally have undergone a complete digital transformation; the rest mostly struggle with decades of accumulated technology, creating significant technical debt. Most bank employees deal with data manually, leaving innovation gasping for air. Gartner predicts that 80% of traditional financial services firms will go extinct by 2030. Thus, upgrading isn't a "nice-to-have." It's a desperate lunge for breath in a race they're losing.

    This technical baggage is not uncommon for how banks manage their workforce. Most of the currently used systems continue to stay inflexible, disjointed, and non-transparent. These systems have obsolete security, challenge employees’ productivity, and hinder service quality, underscoring the critical need for the modernization of talent management.

    Southeast Asia's banking scene is booming, but its patchwork of rules holds back progress. Each country has data laws, like Singapore's strict PDPA or Indonesia's data localization mandates. This jumble slows down tech upgrades, trapping banks in clunky old systems. Imagine talented employees stuck with messy tools, unable to do their best work. They spend hours on paperwork instead of bringing fresh ideas to the table. This hurts everyone – banks fall behind in the digital race, and employees feel frustrated. For banks, adapting to these changes is vital. By embracing new tech and following the rules, they can unleash their workforce's potential and win big in Southeast Asia's exciting future.


    The Rise of Digital Technologies and the Impact on Talent Landscape

    The rapid penetration of digital technologies is transforming the banking industry, creating new opportunities for innovation and growth. However, it is also disrupting traditional business models and making new demands on the workforce. Banks must hire and develop employees with the skills and expertise to navigate the digital landscape, including data analytics, cybersecurity, and artificial intelligence.

    According to Accenture Research, over 54% of banking jobs globally could be automated, which will significantly impact the demand for traditional banking skills, such as branch telling and customer service. However, it will also create a new need for data analytics, cybersecurity, and artificial intelligence skills. A recent report by PwC identified data analytics, business analysis, and enterprise architecture as the scarcest skills for Southeast Asia's banking sector. In the past, banks primarily sought employees with strong financial and analytical skills. However, today, banks are increasingly looking for employees with digital literacy, technical expertise, and strong communication and customer service skills.

    The rise of digital technologies is also changing how banks recruit, develop, and retain employees. Banks are increasingly using online platforms to source and screen candidates, and they are investing in online learning programs to develop the skills of their employees. Banks are also using data analytics to track employee performance and identify areas for improvement.


    Increased Competition from Tech and the Talent War

    The banking sector in Southeast Asia is becoming increasingly competitive as traditional banks and new fintech companies vie for a market share. This competition is driving up salaries and making it more difficult for banks to attract and retain top talent. According to research by CXC Group, tech roles in the SEA region earn 38% more than their non-tech counterparts. This wage gap makes it increasingly difficult for banks to attract and retain top technology talent.

    The growing number of fintech companies also drive the talent war in Southeast Asia's banking sector. Fintech companies often offer higher salaries and more flexible working conditions than traditional banks. This is making them increasingly attractive to top talent. On top of the onslaught of talent attraction from tech and fintech companies, banks grapple with internal challenges that limit their potential to deliver a positive employee experience. Most banks in the SEA region operate on a legacy IT infrastructure, do not utilize the power of data analytics, and have a geographically distributed workforce. For survival, it's critical for banks to win the war for talent.

    Collectively, these aren't suited for a diverse and distributed workforce that needs continuous engagement and a convenient way to manage their day-to-day responsibilities.


    HR Tech: A Key Enabler in Addressing Talent Challenges

    The growth of Southeast Asian banks depends on how they unlock the full potential of their workforce. But clunky legacy systems and a regulatory maze stand in their way. However, using the right HR tech solution can solve banks’ challenges. Imagine AI identifying skill gaps, seamlessly sourcing diverse talent, and crafting personalized development plans – all while navigating data privacy regulations with ease. HR tech platforms like Darwinbox make it a reality.

    Banks can shed cumbersome systems and data complexities. Streamlined recruitment with AI-powered assessments, personalized learning journeys, and a robust HR ecosystem – including employee experience boosts like intuitive mobile accessibility – unlock the full potential of their workforce. Darwinbox’s digital workplace technologies equip banks with actionable analytics, fosters engagement, and promote D&I. Embrace the future of HR and watch your talent take flight, propelling your bank to the forefront of Southeast Asia's dynamic financial landscape. Regardless of location, from bustling hubs to far-flung branches, mobile-first technology empowers and engages every banker, unlocking a revolution in workforce potential.

    1. Identify Talent Needs and Gaps:

    The first step is to thoroughly assess the bank's current talent pool and identify the skills and expertise required for future growth and innovation. This assessment should consider the impact of changing demographics, digital transformation, and competitive pressures. The demand for digital skills is on the rise, and it would be crucial for banks to use the right tools to identify those required skills, map the skills relationship, and finally create a HR strategy that outlines the future roadmap.

    Darwinbox Capability – An AI-Based Skill Graph utilizing a Graph DB and integrating machine learning with NLP creates a dynamic framework for banks to understand and analyse skill relationships in the workforce. This advanced tool allows banks to customize skill sets, align them with specific roles, and adjust skill levels, ensuring a tailored fit for their unique needs. With a comprehensive database of 34,000 skills, the platform draws from established frameworks like O*NET, facilitating immediate implementation and reducing setup time. Moreover, the system evolves through use, improving its recommendations for critical skills required for various positions, thereby aiding HR leaders in identifying talent needs and addressing skill gaps efficiently.

    2. Digitized Talent Acquisition:

    HR Tech platforms help banks streamline recruitment, enabling HR professionals to efficiently identify and attract top talent. These platforms can utilize artificial intelligence (AI) to source candidates from diverse channels, automate candidate screening, and provide real-time insights into candidate suitability.

    Darwinbox Capability – Darwinbox revolutionizes talent acquisition with a robust suite that manages human resources planning, aligning skills ontology, budgeting, and compensation. Its streamlined requisition system utilizes centralized JD libraries and configurable workflows enhanced by a recruiter portal. The platform's recruitment marketing prowess includes multi-channel posting, tracking, and engaging career pages. In sourcing, it offers a rich talent pool, efficient IJP, and referral handling alongside bulk uploads. Evaluation tools like resume parsing, stack ranking, and video interviewing ensure quality hires. Offer management and digital signing are seamlessly integrated, while comprehensive analytics provide actionable insights, making Darwinbox a powerful end-to-end recruitment solution.

    3. Enhance Talent Assessment and Development:

    HR Tech solutions can provide banks with comprehensive tools to assess employee skills, identify areas for development, and track progress over time. This data-driven approach helps banks tailor training programs and development initiatives to address specific skill gaps and enhance employee capabilities.

    Darwinbox Capability – Darwinbox's talent assessment system and talent development capabilities for banks address workforce planning by understanding the demand-supply gap and aligning talent with business trends through visibility into skills and competencies. It fosters a culture of continuous feedback and reduces bias with multi-stakeholder assessments, nurturing talent through personalized and aligned learning journeys. The platform promotes growth, enables talent mobility, and prepares a future-ready leadership pipeline with dynamic talent profiles. Comprehensive succession planning and merit-based reward strategies are incorporated, ensuring alignment with industry benchmarks. Darwinbox's approach to talent development is rounded off with keen insights into employee sentiment, leading to the retention of high-quality talent within the banking sector.

    4. Foster a Positive Employee Experience:

    HR Tech can contribute to a positive employee experience by streamlining HR processes like payroll, benefits administration, and performance management. This can reduce administrative burdens on employees, allowing them to focus on their core responsibilities and contribute more effectively.

    Darwinbox Capability – Darwinbox transforms bank’s employee experiencesv with personalized onboarding, career development, and support services tailored to individual needs. Accessible anytime, it integrates with work hubs like MS Teams and WhatsApp, offering intuitive navigation for HR policies and trending topics. Its platform manages unlimited queries, delivering prompt, personalized responses through an intelligent knowledge base. Employee-centric micro-apps address critical needs, including mental health. Insightful surveys with real-time analytics gauge employee sentiment, ensuring banks effectively understand and act on feedback. Darwinbox's comprehensive approach ensures that every aspect of the employee journey is accounted for, driving engagement and satisfaction in the banking sector.

    5. Leverage Predictive HR Analytics for Strategic Decision-Making:

    HR analytics plays a crucial role in informing strategic talent management decisions. Banks can make informed decisions about recruitment, training, retention strategies, and compensation policies by analysing employee performance, engagement, and talent trends.

    Darwinbox Capability – Darwinbox's HR analytics for banks streamlines data analysis with a self-service report builder and customizable, scheduled reporting. The platform's dual dashboards—Process and Strategic Insights (powered by Power BI)—enable detailed module-wise analytics and executive-level oversight. Role-based access ensures security, while AI features like smart suggestions and AtlasAssist chatbot provide real-time, actionable insights. Users can simulate scenarios and receive AI-driven recommendations for strategic decision-making. The system identifies vital data influencers, allowing banks to craft targeted HR strategies and understand the impact on performance and attrition, ultimately fostering data-driven decision-making at every organizational level.

    6. Adopt an Integrated HR Tech Ecosystem:

    An integrated HR Tech ecosystem can provide banks with a unified platform for managing all aspects of talent management. This integrated approach ensures seamless data flow and enhances communication between HR departments, managers, and employees.

    Darwinbox Capability – Darwinbox's CoreHR platform empowers banks with a flexible, scalable organizational structure to meet dynamic business needs. It offers configurable permissions, robust user assignments, and no-code workflow customizations, ensuring a secure single source of employee data. The platform aids in strategic workforce planning, supporting hybrid work and advanced position management. Integrated service layers improve employee experiences through analytics and task management. Global compliance is streamlined with localized data security, and open APIs ensure seamless system integration. Visual analytics enable strategic planning and decision-making, all within a user-friendly and compliant framework.



    HR Tech has emerged as a powerful tool for Southeast Asian banks to address the challenges of talent acquisition, development, and retention in an increasingly competitive and rapidly changing environment. Banks can build a skilled, diverse, and engaged workforce that drives innovation, growth, and sustainable success by strategically implementing HR Tech solutions and continuously adapting to the evolving talent landscape. To get started today, refer to Darwinbox’s The Ultimate Guide to Buying an HRMS for Banks.

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