Historically speaking, traditional banks have always preferred proximity to their customers by building an extensive branch network across the city/country to grow their business. Having a physical footprint, apparently, also played a significant role in gaining the trust of the customers.
Technology is now gradually enabling the banking industry to break the link between physical presence and market presence to have a highly differentiated service offering with a small property portfolio.
Being major employers, big banks tend to be trendsetters when it comes to office life. A recent survey by Mercer indicates that employees from 44 countries, and within 21 industries, consider flexibility as an important factor when looking for a job. As a result, some of the biggest names in finance are pioneering a workplace revolution. Standard Chartered said it aims for around 50% of its markets to be able to adopt hybrid working patterns (work from home, work from office, or a mix of both) by the end of 2021.
At its core, the banking and finance sector is highly disciplined and, hence, these companies are comparatively in an advantageous position to facilitate flexible working. It does, however, require careful and considered management in order for both staff and the business to benefit and flourish as in this new way of working. Big banks all across the globe are clearly not resting their laurels when it comes to reinventing the modern office.
Some prominent forces that are driving change in global banking and finance companies are:
- Cost:
Following the 2008–2009 economic crisis, financial institutions reformed their policies to ensure a sufficient capital buffer and liquid assets. Since then, the best-performing banks have been focussing on cutting costs dramatically, including that of real estate.
Work spaces designed for agile working can help organisations to charge departments as per their need and use, rather than by legacy. This idea will radically transform the monetary understanding of these business units, as well as drive innovation in its use and the demand for greater flexibility.
- Online/digital preference:
A survey conducted by a popular data analytics company in July 2020, found that only 9% of the respondents choose the bank premises to conduct their transactions, while 29% prefer a drive-through and another 29% do a mobile check deposit and the maximum (33%) use an ATM.
It is this customer demand that is the main push for banks to digitise their product offerings. Declining footfall levels are forcing retail banks to come up with a new model that focuses on customer interaction where customers can socialise, have coffee and work, besides doing their banking. Besides, banks need to cater to the growing internal technological drive of its employees as well.
Infosys and NCR, the key players in the FinTech industry have introduced new platforms, free from siloed and legacy information technology systems.
- Pandemic/ Social distancing:
The pandemic has further reduced the footfall as less and less people now prefer to visit branches than before and plan to resort to mobile or online banking, further impacting the real estate needs of the financial sector.
Also, in a city office setup, a worker has an average work space of 126 square feet, which is less than the minimum space required to follow the social distancing measures. Decentralization of banks, therefore, is paramount in reducing the branch density and ensuring the health and safety of employees and customers.
- Dynamism to attract Talent:
HSBC, a global banking group, has gone on record saying that 81% of its employees said that remote working would encourage them to increase their productivity levels. However, despite the emphasis placed on flexible working by employees, many businesses are far from offering it.
Long working hours and tight deadlines are common in the finance industry. Mergers and acquisitions on a global scale can create irregular work patterns, and during audits, the long procedures do not always fit into the regular 9 to 5 routine. In such a scenario, communication is key to ensuring that employers and employees are on the same page. This is where flexible working compensates for the overtime, and ensures well-being of their staff.
Generation Y now forms the maximum workforce and they demand a collaborative, flexible work environment. Banks are therefore looking at ways in which they can ensure the happiness and comfort of existing employees, attracting fresh young talent. This is also a golden chance for financial institutions to break away from a rigid hierarchy and enable a transparent flow of knowledge and ideas which can be used for informed team decision making.
Conclusion
Banks can no longer afford to be the places of transaction with strict barriers. The fintech-driven challengers and forward thinkers in this sector seem to have been fascinated towards coworking to enhance agility, embrace digital advancements and source talent with greater potential. As a result, the soulless cubicle partitions are fast being replaced with an inspiring open-plan to support a collaborative work environment beneficial for both employees and clients.
Financial industry is a dynamic industry. That is why flexible working makes better business sense. By bringing together all communications (training and updates) into one unified platform, they can avoid big investments. Technology also lets information to be cascaded through an organization at a time that suits employees, thereby empowering teams and developing inter-group synergies regardless of departments or time zones to collaborate and make decisions faster. Such tools promise innovation and, therefore, a competitive advantage.
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