The predictions are out, and it's time for India's ever-evolving BFSI sector to bring them into action. As per a recent study, India’s BFSI sector is expected to be the third largest by 2025 and India’s finance sector is projected to result in a market volume of US$18.75 million by 2027.
With great power comes great responsibilities. India’s BFSI sector has immense potential to revolutionize India’s economic landscape. However, to achieve these milestones, India’s banking, financial services, and insurance sectors (BFSI) will need the right talent with the right skill sets to accomplish these goals. For that purpose, India’s BFSI sector must focus on future-proofing its workforce.
By bringing this into perspective, this blog will take you on a sojourn exploring further the growing landscape of India’s BFSI sector, its trends, and skill requirements. It will also examine the key challenges faced by India’s BFSI sector in managing its skill needs and how AI-driven Skills Intelligence Cloud can aid India’s BFSI firms in managing their skills index and requirements.
Understanding India’s ever-evolving BFSI sector, its trends, and skill requirements
A. An Overview of India’s BFSI Sector
India’s BFSI sector is rapidly growing with its steady adoption of digital and technological transformations. From kick-starting the Digital India Mission in 2014 to the development and democratization of different public banking infrastructures like EKYC, Aadhar, Video KYC, eSign, DigiLocker, UPI, and others, India’s BFSI sector has been booming.
As per the 2023 BFSI and Fintech Summit by Dun and Bradstreet, India’s BFSI sector plays a crucial role in creating jobs, innovation, ESG practices, and investments. Regarding job creation, banking is the BFSI sub0sector with the highest workforce demand, followed by others. With drastic growth, India’s BFSI sector is expected to make a huge impact in the geographies of world economies. It is expected that India’s domestic banking sector can be in the top three after China and the US by 2030.
Additionally, India’s FinTech sector is emerging as a global leader in the FinTech space with a US $50 billion (about $150 per person in the US) market size. In the coming years, India’s BFSI sector can boost India’s GDP from 4 to 5%.
As these new offerings, growth expectations, and value propositions step into India’s BFSI sector, it becomes integral to have professionals with adequate sector knowledge and IT skills to handle, develop, maintain, and improve these innovations. This paves the way for skills shortages and gaps in India’s BFSI sector.
B. Key Trends Shaping the Future of India’s BFSI Sector
India’s BFSI sector has faced many changes in technology, regulatory, and macroeconomic factors. Some of them were brought into the picture by the sudden disruptions brought in by the pandemic. Although some such developments and trends have been transient, others have brought a permanent impact on India’s BFSI sector. They range from increased dependencies on digital channels to reliance on hyper-personalization to enhance customer experience and satisfaction.
Some key trends and factors shaping the future of India’s BFSI sector are:
1. Focus on improving the customer experience by relying on data analytics to provide personalized offers, services, and experiences.
2. Inclusion of digital onboarding and marketing solutions to enhance customer acquisition processes
3. Usage of AI and data analytics for customer interactions and tracking of life metrics, especially in the insurance sector
4. Reliance on blockchain for lowering underwriting risk processes
5. Development of mobile iOS and Android-based applications, open API banking, and AI-based virtual assistants to improve customer experience
6. Dependence on robo-investing, customer lending automation, and other such technologies
These are some pivotal trends evolving in India’s BFSI sector that are improving the BFSI landscape on a whole new level.
C. Evolving Skills Requirements in India’s BFSI Sector
With technological developments, the skills required in the BFSI sector have also evolved drastically. Even in BFSI’s accounting, finance, sales, and marketing wings, BFSI firms are incorporating tech-driven solutions. This calls for a change in job roles and upskilling of the existing workforce. For instance, BFSI firms use data intelligence software to make the best out of data and data analytics in accounting and finance. Therefore, the BFSI workforce needs to be equipped with tech skills in data analytics, AI, machine learning, RPA, and others for strategic planning, risk and security, and attaining sustainable business growth.
Other key skills requirements in India’s BFSI sector are as follows:
1. Good understanding of SQL, which is beneficial for working with data efficiently
2. Knowledge of Python, useful for performing predictive analysis, creating e-banking, and payment systems
3. Expertise in cloud computing to work with digital storage and other security infrastructures
Apart from these new-age tech skills in high demand, which helps build Banking as a Service or BaaS with agility, scalability, and flexibility, it is essential to develop soft skills, like customer relationship management, customer interaction, grievance redressal, and others. Due to these developments and skill requirements, there has been a resounding interest in improving upskilling and reskilling in India’s BFSI sector.
What are the key challenges faced by India’s BFSI sector while managing their skills requirements?
Although India’s BFSI sector is booming, there are several challenges/hindrances that come in their way in achieving the desired results. They range from finding the right talent to upskilling existing employees. Here are some critical issues faced by India’s BFSI sector while it endeavors to manage its skills requirements.
Lack of supply of skilled talent
There is an issue with the lack of a supply of skilled graduates. Most often, India’s BFSI sector hires graduates from commerce and engineering sub-streams. However, for tech skills, only 3% of engineering graduates possess the skills to work in software and product industries, and just 7% have skills to perform basic technical tasks, as per a survey by Aspiring Minds. This further increases the shortage of skilled candidates, aligning with the current skill requirements. Along with tech skills, the lack of soft skills is yet another problem.
Lack of clarity on skills required in the sector
Digitalization and technological advancements have brought in several skills, changing job roles and positions. However, it is essential to have a proper understanding of the skills required for the BFSI sub-sector concerned to achieve growth. Once the foundation of this skills data is in place, banking, FinTech, insurance, and other microfinance firms can build their talent acquisition and talent development strategies efficiently.
Concerns with widening digital skills gap in the existing workforce
Rapid adoption of tech infrastructure in India’s BFSI sector could lead to the disappearance and revamping of several existing job positions. However, most of the existing workforce doesn’t have the required skills and specialization in these technologies. This has paved the way for a digital skills gap in India. The only way to resolve these issues is to upskill and reskill the existing workforce and open opportunities for internal mobility. However, to perform this efficiently, India’s BFSI sector has to rely deeply on its employees’ skills data and make the best of AI-powered solutions like the Skills Intelligence Cloud.
What is iMocha’s AI-driven Skills Intelligence Cloud?
iMocha's AI-driven Skills Intelligence Cloud is a comprehensive platform to help build a data-driven and skills-first ecosystem, enhancing talent acquisition, development, and management activities of any organization. It does so by building detailed skills taxonomies and ontologies after analyzing different job profiles within an organization. While doing so, it would turn every job role into specific skill sets with precise proficiency levels. Skills taxonomy is one of the first layers within a skills intelligence platform that incorporates taxonomies collected from open libraries, skills management vendors, existing organizational skills data, and other sources like LMS and ATS.
Coming to skills ontologies, Skills ontologies and skills taxonomies are closely related. Based on the skills taxonomies, an AI-powered skills intelligence cloud can help companies map skills to job profiles. It is essential because every company has different job profiles with different capabilities and skills. In short, by incorporating skills intelligence within the HR architecture, organizations can make intelligent talent decisions and work towards building a future-proof workforce.
How iMocha’s AI-driven Skills Intelligence can help in future-proofing India’s BFSI sector?
Since we have looked into what Skills Intelligence Cloud is, now, let’s look into how this AI-powered platform can assist in future-proofing India’s BFSI sector and its workforce.
Helps identify critical skills for the Future
One of the challenges companies in India’s BFSI sector face is identifying the critical skills required for their firms to thrive and achieve success. A skills intelligence platform can build skills taxonomies and ontologies to help concerned BFSI firms identify the skills critical to their organization in achieving business growth. Based on this information, they can improvise their talent acquisition and development strategies.
Assists in acquiring skill-fit talent and enhances talent acquisition initiatives
Since there is a drastic change in the on-the-job skills in the BFSI sector, one way to resolve this issue is to hire skill-fit talent. However, to do so, it is essential to identify the skills needed for the organization. This can be easily performed with the help of a skills intelligence platform. In addition, a skills intelligence cloud can improve recruitment success rate by mapping skills and creating specific skills frameworks for existing skills profiles created based on different job profiles within the firm. Furthermore, it can help create job descriptions that fit the company’s needs skills needs, conduct skills validation through multiple channels, and smoothen the entire recruitment process.
Improves learning and development practices and reduces skills gaps
There is a widening skills gap in the BFSI sector, especially in niche roles like Machine Learning, industrial relations, Artificial Intelligence, risk management, and data analytics. A skills intelligence platform can help identify skills proficiencies of your existing employees, and skills adjacencies, and benchmark them against industry and company standards. Based on this, it will be easier to identify talent internally to upskill/reskill for specific skills to bridge skills gaps.
Brings in internal mobility and aids in workforce planning
Relying on the insights offered by a skills intelligence cloud platform can help identify talent within your organization internally. The identified talent could undergo training programs to perform the newly assigned roles efficiently. Similarly, a skills intelligence platform can aid with workforce planning, improving employee retention, productivity, satisfaction, and so forth.
Addresses issues related to Diversity, Equity, Inclusivity, and Belongingness (DEI&B) efficiently
Regardless of the industry, it is integral to bring in diversity, equity, inclusivity, and belongingness. Even in India’s BFSI sector, this seems to be a pertinent concern. As per a recent news report, it is stated that women representation in the BFSI sector is as low as 20%, and there is a lack of women representation in strategic roles, especially in the C-suite. Organizations can reduce and even completely rule out the problems related to DEI&B by relying on a skills intelligence solution.
Thus, India’s BFSI sector can efficiently manage its skills concerns by making the best out of skills data offered by a skills intelligence platform. From identifying critical skills to addressing issues related to DEI&B, a skills intelligence platform can assist India’s BFSI sector to boom by building a future-proof workforce. Through this, India’s BFSI firms can achieve their business goals and bring in the desired economic advancements.