The Impact of Digital Transformation on HR Practices in Banking

Dr. Syukri Sudari, Group Chief People Officer, Affin Bank Group in a recent interaction with Asia Business Outlook, shares his views on the role data analytics plays in employee performance management in the banking sector, the ways in which digital transformation has influenced employee engagement strategies within banks and more

With the advent of digital tools, what role does data analytics play in employee performance management in the banking sector?

Significant advancements have been made in terms of tools used as well as the role data analytics play in performance management. Data analytics has transformed performance management by making it objective as well as transparent. Organizations today track KPIs in real-time with digital tools and this capability helps in ensuring accurate as well as objective performance assessment. As a consequence, the complete performance management process has become more reliable & unbiased.

Moreover, these tools help in identification of patterns as well as trends in individual employee performance. Managers can detect the potential issues at a very early phase as well as take proactive measures for addressing them, by analyzing the data. Identifying problems was a huge challenge and most often delayed until the last phase of the performance cycle – and this was a point which is usually too late for taking corrective action.

Organizations today can identify trends early as well as respond immediately with the integration of data analytics, which can enhance their ability to manage performance effectively.

Lastly, access to accurate data enhances decision-making processes significantly. Since the decisions are based on reliable data, they are not only faster but also more precise. Performance management comprises all within the organization and when the employees are aware that appraisals are based on a fair, data-driven process it fosters transparency and promotes a culture of accountability.

By encouraging feedback & ownership of personal development this data-driven approach also helps employee engagement. Moreover, the availability of real-time performance data improves confidence levels among managers & employees.  While managers can manage performance more effectively with data at hand employees can understand and monitor their own performances.

Lastly, data analytics plays a major role in performance management specifically in the banking industry and it ensures objectivity which improves decision making as well as promotes engagements & builds confidence within the company.

Employee engagement is crucial for organizational success, and technology plays a pivotal role in enhancing it. In what ways has digital transformation influenced employee engagement strategies within banks?

From my personal perspective, in the past, several organizations used to rely on guess work for identifying areas for addressing employee engagement strategies but today this has transformed to a greater extent with the availability of data that today renders certainty coupled with clarity. Furthermore, data has also greatly influenced the way we communicate as well as foster collaboration among employees.

Digital collaboration tools have become key in improving communication as it is a one of the cornerstones of any effective engagement strategy. Organizations can today improve how they engage their workforce with the changes brought about by digital tools as communication stays as one of the most important aspect of employee engagement.

In the banking industry, for instance, communication strategies have been strengthened via digital transformation for ensuring meaningful connections with employees. And this leads to better engagement by fostering collaboration & transparency.

Furthermore, data-driven insights from employee experiences have transformed how organizations approach engagement. While it was challenging to conduct predictive analytics for understanding employee behavior in the past, today with the help of advanced tools we can easily identify trends as well as predict when an employee would even consider quitting the company – most often even they themselves are aware of it.

This predictive capability underscores the power of digital transformation and with such insights organizations can develop customized engagement strategies proactively for addressing concerns & retain talent. Also, companies can address workforce concerns effectively as well as design engagement strategies which resonate with employees.

Another important shift is the move away from generalized engagement strategies. Today banks no longer rely on one-size-fits-all solutions. Rather they adopt personalized L&D strategies that are customized to individual requirements. Companies today can address various issues with precision as well as focus on enhancing their workforce by understanding the root cause of challenges by identifying potential solutions.

Digital transformation has also alleviated concerns that are related to routine and mundane tasks. Furthermore, numerous manual processes have been automated via tools which include RPA as well as AI and these technologies help employees by automating repetitive processes which allows them on focusing on more and more meaningful & engaging tasks.

Consequently, modern engagement strategies also emphasize on leveraging technologies for keeping employees relevant, excited, motivated about their roles. By integrating these tools, organizations can ensure their workforce stays enthusiastic as well as committed to thrive in the rapidly evolving sector.

Artificial intelligence is reshaping recruitment processes by enhancing candidate screening. How can AI tools be leveraged to improve the efficiency and fairness of recruitment in the banking sector?

AI has enhanced efficiency as well as decreased bias significantly. For instance, automated resume screening has proven to be highly effective in facilitating organizations specifically in the banking industry, screen resumes on the basis of predefined parameters and this process helps in ensuring that the decisions are not just influenced by background, stereotypes or even discrimination as the AI focuses only on objective criteria. Therefore, as a result, the screening process becomes even more fair & impartial. The quality of resumes sourced plays a major role. If we can address this aspect at the outset which helps in ensuring high-quality inputs – the outcomes at later stages that will improve naturally.

Artificial Intelligence also improves candidate matching – a task which can be daunting while dealing with huge volumes of applications which include 5000 or even 15000 resumes for fresh graduate positions. Manual review of every resume is neither practical nor efficient. By leveraging Artificial Intelligence, the initial as well as secondary screening processes become more efficient and this allows organizations to handle such volumes with ease.

Looking ahead, we anticipate that Artificial intelligence will achieve near-perfect candidate matching. For example, AI-powered tools such as chatbots can help in assisting as well as identifying suitable candidates. In case an employee quits a company, the system can analyze their background as well as their experience and scan quickly the market for profiles which match closely the qualification of the employee who is leaving the company. This capability augments the process of finding potential replacements as well as ensures a seamless transition.

Finally, Artificial Intelligence has optimized the process of recruitment by decreasing costs as well as increasing productivity. Companies can integrate technology into recruitment and streamline operations, enhance efficiency as well as allocate resources even more effectively. Thus, AI not only improves efficiency and fairness in recruitment but it also helps in driving significant cost savings while supporting employee engagement as well as strategic decision-making.