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The war for talent has never been greater, as many people have reassessed their lives and work during the Covid-19 pandemic. Transaction banking’s digital transformation, as well as its role in supporting the real economy, may give the industry an edge in attracting and retaining staff.

Via The Banker

The changing image of transaction banking – often seen as less glamorous and exciting than investment banking – is helping the industry appeal to new talent, according to panelists at industry association BAFT’s Virtual Europe Bank to Bank Forum.

Speaking on a panel entitled ‘The way we work post-Covid-19: attracting and retaining talent in transaction banking’, participants highlighted how the industry is at the forefront of innovation, making it a complex and stimulating environment. Additionally, transaction banking’s role in supporting economic growth – through cross-border payments and trade finance – is proving attractive to those wanting to make a positive contribution to wider society.

“While transaction banking is the foundation of the core product offering, it is also at the heart of the digital disruption and close to the real economy,” said Maria Chiara Manzoni, head of corporate and investment banking (CIB) people and culture strategic partner, CIB process and operational excellence at UniCredit. “As an industry, we need to communicate even more effectively to illustrate how diverse and dynamic transaction banking is.”

“It’s clearly an exciting time for transaction banking, which presents many opportunities for transformation,” added Emma Dunlop, vice-president and global head of human resources, Royal Bank of Canada (RBC) Investor and Treasury Services. She believes that demonstrating how it can link to the purpose of supporting the real economy, ESG or international trade could be a real differentiator for transaction banking. “Employees are seeking opportunities to align their personal purpose and values to an organization’s or to the work that they do. This is an opportunity for transaction banking leaders to promote and harness that thinking,” she said.

Both agreed that digital skills are essential when recruiting in transaction banking. “[For example] how artificial intelligence is changing how we process information and data – this is crucial for our people to understand. [We are looking for] more hybrid profiles, with experience in banking, fintechs and digital platforms, as well as business acumen, digital literacy and high-end skills,” said Manzoni.

The bank also looks for a vast array of soft and hard skills, she added. “For a big transformation, there are some personal characteristics that UniCredit looks for in our talent, such as accountability and constructive criticism. In one word, we’re looking for courage – the courage to take some risks but also flag when we’re taking the wrong turn,” she said.

The Human Side

“Data and digital literacy have been a huge focus for our future skills agenda, as we look to accelerate digitization of manual processes,” said Dunlop. “However, as mentioned, digital skills are only one aspect and it can’t replace some of those customer-facing human-centric skills that are fundamental to transaction banking, which is a very relationship-based business. We want resilience, as well as problem solving, critical thinking, collaboration, communication, and financial and commercial acumen.”

Dunlop reports that RBC recruits from different sectors, such as technology firms and fintech start-ups, not solely from other banks. “There many different players that banks are working with, which is far more common now than in the past. We need to look at that as an opportunity for internal talent to collaborate and learn from other players in the market,” she said, adding that this helps with retention efforts. While RBC is focused on talent development and internal mobility, it also looks in the market or to partnerships to supplement staff skills sets.

During the pandemic, the number of fintech collaborations with transaction banks have increased, according to Tarun Khosla, head of trade and working capital loans, Europe, the Middle East and Africa at Citi. In trade finance, for example, transaction banks are working closely with fintechs to develop digital solutions – “basically co-creating solutions”. He believes that this engagement is also resulting in the movement of talent between fintechs and transaction banks and vice versa. “When we are working on a holistic solution design, the traditional boundaries melt away,” he added.

Another conference panel, ‘Fintech venture experience: sitting on the same side of the table’, showcased two successful bank-fintech partnerships: Barclays and SparkChange, which provides specialist carbon investment products; and Société Générale (SocGen) and Treezor, a banking-as-a-service platform.

There are numerous reasons for a bank to partner with a fintech, such as providing specialist capabilities that the bank doesn’t have internally, as in Barclays’s case, or enabling a faster time to market, as in SocGen’s case.

From the fintech’s perspective, a bank can help validate its business or product proposal, provide investment (SocGen acquired Treezor in 2019; Barclays led SparkChange’s $4.5m funding round in late 2020), as well as act as a dedicated sales and distribution partner, an advocate and a marketing machine.

But fintechs still have a difficult time accessing the right people within the bank. That is why SparkChange joined the Barclays accelerator program. “We partnered with Barclays [three years ago] because we heard good things about its accelerator program and found them to be very accessible and progressive in their views towards working with start-ups,” said Joff Hamilton-Dick, founder of SparkChange.

Onboarding Issues

Additionally, the onboarding process remains onerous. “We had to overcome some pain points when we [started working] with SocGen in terms of compliance, security, best practice, processes, etc.,” said Éric Lassus, co-founder, CEO, Treezor. But once it is completed, this can be a competitive advantage for the fintech, especially when dealing with corporates, according to Jean-François Mazure, head of cash clearing services at SocGen.

One of the biggest challenges is aligning the culture of a large incumbent with a start-up. In both panel examples, this was solved by a degree of independence for the fintech. Treezor, for example, remains a standalone project with its own roadmap and budget, and it is free to follow its strategic objectives, according to Lassus.

SparkChange has had “zero interference from a strategic perspective” from Barclays, according to Hamilton-Dick. “But, as with any good investor, Barclays is not afraid to challenge our decision-making from time to time, which makes it a very welcome and much needed sounding board to our strategic operations,” he said.