The financial services industry in India is poised for substantial long-term growth over the next three decades. According to a PWC report, India’s share of global GDP is expected to rise from 2 per cent to 13 per cent by 2050 and India is expected to have the 3rd largest domestic banking sector. The top seven emerging markets or E7 are forecasted to have domestic banking assets and profits that exceed those of G7 countries by over 50 per cent. The report also forecasts that by 2050, China and India together will have over 35 per cent of the global banking assets. Also, the focus on a digital approach to banking and the increasing governmental emphasis on financial inclusion through Jan Dhan accounts and similar approaches will keep the Banking, financial services and insurance (BFSI) industry growing at a fast pace. Given all this, the National Skill Development Corporation (NSDC) estimates that the BFSI sector in India will need an additional 1.6 million skilled workforces by 2022.

While there would be substantial job opportunities in BFSI sector, the reality is that the skills needed in tomorrow’s BFSI world will be very different from those available today. Increasing digitisation, process automation and technology-driven approaches will mean less branch-based relationships with customers and more digital interactions. Today, nearly 50 per cent of traditional branch banking activity can be conducted online. This will only increase in the future and there are already several banks in India offering digital only accounts. In the West, there are 100 per cent digital banks which do not have any physical presence. This trend of increasing digital only presence will grow exponentially in the future. Credit analysis will also become increasingly model-based and digital. Increasing pressure on margins will also force the industry towards aiming for higher productivity through technology. An EY report envisages that 20-25 per cent of the existing jobs in the BFSI sector will face elimination and another 55-60 per cent of the jobs will need radically changed skill sets. Another 15-20 per cent will be deployed in jobs that do not exist today.

There is a substantial skills gap that exists today in the BFSI industry. Four types of skills that are in short supply:

Strong Technical Skills - Personnel who can build, manage and continuously update the technological infrastructure of the BFSI organisations. This will include developers, programmers, process automation experts, blockchain experts, AI and IOT experts.

Analytical Skills - Increasing transaction data and consumer data availability will require data scientists and data analysts to provide insights to the management. Business analysts will be needed to glean insights about the customers and tailor-make solutions that meet the needs of all customers.

Managerial Skills - Managers will be required at every level who understand how to use technology for competitive advantage. A BFSI manager must not only know banking, insurance and finance, but also be able to proficiently use data analytics and the applicable fintech.

Cybersecurity Experts - Increasing digitalisation and use of fintech will bring its own challenges. Computer security experts to prevent hacking, forensic analysts to detect frauds and legal experts well versed in digital laws for prosecuting financial crimes will also be needed. Compliance requirements will be different and compliance specialists will be needed.

To immediately bridge the demand-supply gap, the existing workforce will need to be reskilled through training. Given the large number of staff who will need to be retrained, BFSI organisations will need to take this on a priority and be prepared for large investments in the training, in addition to technology infrastructure investments.

Educational institutions will need to substantially recast the existing programs to provide relevant skill sets to their students. The traditional finance, commerce and business degree programs will need to be updated to include digital finance, digital marketing, data analytics, and even object-oriented computer programming as required courses. The traditional engineering and computer science degree programs will need to include data science and artificial intelligence, along with financial and digital applications as a part of core courses.

A career in BFSI industry is an opportunity for people with a wide range of skills from traditional financial skills to analytical and technical skills. A career in an industry undergoing fundamental transformation will be enriching and exciting!

The author is Program Advisor, Shiv Nadar University, Chennai

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