Creating a happy, satisfied workforce requires a strong HR and compensation strategy. And while many banks claim such a strategy, they can fall short in the execution. We’re now at a turning point where the way banks conduct business and approach their HR strategy is going to fundamentally change through the implementation of technology. The emerging trend I’m seeing is banks beginning to look inside to their own people data, trying to organize that information so they can leverage and optimize a people strategy.
Counter to that trend, what I’ve also seen is banks that are relying on custom built systems or traditional enterprise resource planning (ERP) systems to do their compensation processes. Not only is this expensive from having infrastructure and support costs on-site, but a lot of the processing is then done in spreadsheets, which, aside from being extremely manually inefficient, generally leads to compliance issues.
With the emergence of SaaS and the maturity of that technology, some banks have started to realize the massive opportunity to leverage the power of the cloud and move their compensation processes to a more delivered technology solution. This evolution in technology will enable banks to gain an operational competitive advantage, because with automated operations, as opposed to sending hundreds of spreadsheets to hundreds of managers to collect recommendations, banks can turn their focus to the HCM strategy itself.
Moving compensation data to the cloud also removes the compliance risk of having data in disparate systems. When data is stored securely in the cloud, managers globally can access the same information with a level of transparency that banks don't normally have. To generate real insights into people and compensation, you have to bring together data that has historically been in silos. With that unification, managers can use their time actually talking to their employees about compensation, rather than spending that time looking for information or trying to gather it themselves, thereby driving the right behavior and focusing on the strategy
The banking industry is competing with the technology industry for critical talent in all facets of business, so a very strong HR strategy is critical. The tech industry is cash-heavy and has easy access to machine learning and AI to enhance their human capital strategies. For banks to be able to compete for that talent, they must move away from custom-built systems to automated platforms that leverage new technologies.