The pandemic threw a gauntlet at industry operations across the board, and each sector experienced the impact in a different way. For the banking industry, it was critical to adapt fast to ensure that the global economy did not collapse from a financial freeze. The years of preparation and investments that the sector has made in IT infrastructure, digital transformation, and disaster recovery have helped the banking sector in withstanding the disruptions with relative ease. And all this was done with more than 90% of the staff working remotely and an even higher percentage of customers availing banking services digitally. Although the majority of staff were working from home, banks witnessed a significant increase in productivity. This new technology-enabled remote working model is all set to become mainstream. In general, remote working benefits everyone as banks can reduce employee expenses, staff can cut down on commuting times, and the environment benefits from a reduction in carbon footprint.
Inferences from either side of the Atlantic
Banks across Europe and America have arrived at different conclusions from this forced experiment. Let’s look at some inferences drawn from the public statements made by some of the big banks from both sides of the Atlantic.
European banks, including some of the major Dutch, German, and British institutions, are redesigning their workplaces to facilitate the remote working trend. The pandemic has shown that many roles can be undertaken effectively outside of branches and offices with significantly higher productivity. These factors are influencing their actions to reduce the branch footprint and repurpose some of their offices into collaborative spaces. Such collaborative spaces will support the social needs of the staff and nurture creativity through in-person collaboration and teamwork.
Meanwhile, major American banks think that the current work-from-home arrangement is just a passing anomaly that they intend to fix soon. They are of the opinion that remote work does not suit the innovative, collaborative apprenticeship culture of their organizations. Leading American bankers worry that work from home could have a negative effect on employees, slow down their decision-making process, and hinder overall creativity. They only expect a small fraction of their staff to work remotely in the long run and intend to create flexibility by allowing staff to work remotely for few days (2–3) a week.
When it comes to environmental sustainability commitments, European banks have taken a huge lead over their American counterparts. Their experiences from the pandemic and commitments to sustainability are likely to influence European banks towards hybrid and remote models compared to their American peers.
Tools, technologies, and proclivity for remote work
The tools required to telecommute effectively are already available and evolving quickly to address individual and enterprise needs. This is also witnessed in the number of Intellectual Property filings for remote work in the recent past. Google’s ‘Speech Recognition and Summarization’ and Cisco’s ‘Defining Content of Interest for Video Conference Endpoints with Multiple Pieces of Content’ are examples worth noticing. These new tools will contribute significantly to improvements in the quality and the value of work delivered by remote workers.
Employees in the developed world are showing a preference for remote work. It has also been observed that remote work improves the quality and quantity of employee innovation. In addition, remote work options will enable banks to source highly skilled talent from across the world, not just for their technology needs but also for their core operations.
Hybrid and remote work models will define the future of banking
Today, banks have access to technology and processes and a need for skilled talent that can help them reap the benefits of remote and hybrid work models. That said, they should make an objective evaluation of each role before categorizing it into any of the work models and deploying it in their hiring processes. Current research indicates that the risk of not doing this right will be huge for the banks. Apart from the risk of losing talent – both existing and new – banks can also miss the opportunity of cost saving. A recent KPMG study estimates that a hybrid working model can result in annual cost savings of $10,000 per employee. While banks can benefit from reduced real estate costs, higher employee productivity, and lower employee costs, employees will benefit from the reduced commute times and savings on commuting expenses. This will not only improve productivity but will allow them to maintain a better work-life balance. Deploying the right mode, with a clever mix of hybrid and remote options, will prove to be a win-win situation for both banks and their employees.