Traditional roles in banks are shrinking in the face of modernisation

Experts suggest that people working in the banking industry go in for a skill assessment instead of worrying about being replaced by technology.

The Indian banking sector is on a modernisation exercise, marked by a digitisation of processes and operating models. This shift is not merely a technological evolution but a restructuring of the traditional talent pyramid, where roles and functions are being consolidated for enhanced efficiency. While most of the roles still exist, some functions have witnessed a drop in demand and net additions over the last two years.

Roles that have seen a headcount contraction of 5 percent to 8 percent over the last two years are Telecallers, Senior Sales Officers, Sales Executives, Relationship Executives and Collection Officers, according to data put together for Moneycontrol by specialist staffing company Xpheno.

“The functions of these roles are largely customer-facing and customer management. With the evolution of banks into digital offices with fewer physical touchpoints needed for servicing, these roles have amalgamated into digital enablement of the functions they represent,” said Kamal Karanth, co-founder of Xpheno.

Further, he said that with the growth of outsourcing of some entry-level sales and client acquisition functions, the in-house headcount requirements for these roles have shrunk. High penetration of UPI, comprehensive self-service mobile apps, IVRS-enabled CRM and sales activities have shrunk customers’ physical footprint with banks.

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Job portal foundit observed that top roles with the lowest demand include Data Entry Executive, Business – Field Development Officer, Call Centre Executive, Subject Matter Expert (SME), and Teller.

While certain BFSI roles, such as Data Entry Executive, are diminishing due to automation and evolving technologies, others are witnessing a transformation.

According to Sekhar Garisa, CEO of foundit, roles such as Bank Teller and Field Development Officer have evolved within the realm of digital banking. They've shifted towards personalised advisory services and handling intricate customer queries rather than solely focusing on routine transactions, leading to the emergence of Relationship Managers.

“SMEs contribute extensively to training programmes, product development, and specialised insights across various organisational departments. But these might have transitioned into consultancy, advisory, or leadership positions within their fields of expertise,” Garisa said.

Overall hiring is strong

Data from Xpheno suggested that the Indian banking sector continues to be one of the key talent-absorbing sectors and is registering some of the biggest net headcount growth in recent years. In FY23, the sector recorded its highest annual headcount growth over the last 10 years, with a net addition of 1.23 lakh employees.

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The net headcount addition in FY23 was 61 percent more than the net addition in FY22. The sector currently employs over 1.76 lakh employees after recording 7.4 percent y-o-y growth in FY23. The current fiscal year is set to close with the highest net addition in over two decades.

The industry is also prone to high attrition, reaching 46 percent in some cases. This is due to talent poaching among banking bellwethers, increased competition from other sectors, especially fintech, and a reluctance to hire in bulk.

“Headcounts in Banks are getting rearranged to focus on higher engagement touchpoints for retail and enterprise banking customers. Roles like Relationship Manager, Credit Manager, Finance Officer, Business Analyst, Business Development Manager, Product Manager, Data Analyst, Project Manager and Personal Banker are gaining significant talent volume,” said Karanth.

Adjacent roles can be a solution

Experts suggest that people working in the banking industry go in for a skill assessment instead of worrying about being replaced by technology.

“Assess the skills and experiences from current roles that align with stable or emerging roles. Identify transferable skills such as customer service, analytical abilities, financial acumen, or technological expertise that are sought after in the new role,” said Garisa.

In the data-rich environment of modern banking, professionals are not merely crunching numbers but finding insights that can shape strategic decisions. Analytical prowess is thus becoming a lynchpin in the industry's pursuit of innovation and sustainable growth.