Opportunities and Challenges of employers and candidates in Banking in Digital Transformation

Part 1: The context of the Banking industry by digital transformation requirement

The COVID-19 pandemic’s effect on Banking is not significant

Banking is crucial to the economy of any country, which explains why its activities remained operating in social distancing for two years. The pandemic, however, burdens the possibility of interacting with customers in Sales departments in banks, when they cannot meet and consult face-to-face with the customers. In addition, banks also have numerous key customers whose businesses are suspended due to the pandemic, so they are also affected by bad debts, doubtful debts, and reducing in growth, transaction, and fees. The pandemic also forces banks to increase provisioning and burden decreasing interest rates from the State Bank. As a result, some banks also offer reductions in salaries and bonuses to staff at the management level when profits are not as expected.

Digital transformation is a certain change

Faced with the increasingly changing consumer behavior of customers following the trend of digitalization, banks have been applying digital transformation to meet these irreversible changing needs.

Part 2: Challenges in recruiting in meet the needs of digital transformation

Demand for recruiting personnel in the digital transformation sector

Banks are focusing on digital transformation and automation, which leads to the increasing demand for IT and data personnel. These recruiting positions remarkably emphasize high-quality human resources, yet it is difficult to address and costly due to market competition. In addition, digital transformation is undertaken by large and high-potential banks in the last three to five years. Due to competition and the pandemic’s effect, numerous banks are also expanding this strategy in 2021 and 2022.

According to data from Navigos Search, from the latter half of 2021 to mid-2022, search orders from banks for mid and high-level positions related to digital banks and digital transformation occupied half of the orders.

Some positions that are always in high demand for digital transformation include Product Owner, Project Manager, Business Analyst, Solution Architect, Software Developer, Application Development, Scrum Master, Experience Design – UI UX, Customer Experience – CX, Data Analysis, Data Science, Digital Marketing, Marketing Technology, Digital Sales…

Challenges in recruiting in digital transformation

Limited number of candidates

Nowadays, candidates in the Vietnam market in banking’s digital transformation field are limited in terms of quantity and quality. In terms of quality, there is a shortage of candidates who has experience utilizing advanced technology. In terms of quantity, the number of candidates does not satisfy the need of banks.

Fierce competition for candidates

According to Navigos Search, candidate competition is extremely fierce in this industry, particularly in Information Technology (IT). It is always difficult to find qualified candidates, not only in banks, but also in other industries such as finance, e-commerce, healthcare, and education. Since domestic candidates fall short of the standards for adopting cutting-edge technology products and solutions for digital transformation, a substantial amount of cost is spent searching for candidates abroad. Banks favor overseas Vietnamese (Viet Kieu) over foreign candidates (expatriates) in 2020 and 2021 because Viet Kieu candidates have more benefits when they are familiar with Vietnamese culture and language. These people work in a variety of fields, including IT, data, products, risk management, etc.

Changes in the bank’s recruitment requirements

Banks are now able to look for applicants and contact them directly thanks to the development of social networks and information technologies. In the past, banks frequently gave preference to applicants with relevant credentials and prior work experiences at other banks. Currently, regardless of the candidate’s prior experience, banks need people with relevant mindsets and abilities to suit the new strategy since their needs for transformation and company development are changing.

Candidate qualities are taken into account when recruiting

Products and services in the digital transformation will be customer-centric. As a result, hiring guidelines for candidates in this profession will be based on these criteria. Additionally, the bank will look for applicants who possess essential skills including critical thinking, design thinking, data analysis, and English fluency that are related to adaptation in the context of digital transformation.

 Banks use various channels to hire suitable candidates

In an environment where hiring competition is increasing and both the quality and number of candidates are limited, banks use a variety of channels to attract potential candidates. They are conducting Employer Branding programs, using domestic and international “headhunting” services and conducting talent roadshow activities for searching mid-level and senior-level candidates as well as overseas Vietnamese, and using RPO service (Recruitment Process Outsourcing) to attract candidates who are potential for digital transformation.

The salary range of the jobs in the Digital Transformation sector may be 20% – 30% higher than the jobs in other traditional sectors.

Part 3: Challenges and opportunities of candidates in the digital transformation field

For candidates who are not majoring in Information Technology (Non-IT)

Banks can send non-IT employees from relevant departments to participate in digital transformation projects. In addition, many banks also recruit experienced candidates from other banks. They are also open to candidates from other fields that have implemented digital transformation, such as e-commerce and financial technology (Fintech). Candidates in these fields will bring new ideas and experiences to the bank because they provide products and services related to business in a digital environment.

A non-IT candidate should have experience in banking, products, and customers. Particularly for strategic positions for digital transformation, the bank targets foreign candidates or Viet Kieu (overseas Vietnamese) with international experience, or candidates from leading companies in Vietnam that have succeeded in digital transformation. In the past, banks almost only recruited candidates from other banks, but now there is a tendency to diversify the source of candidates from other industries.

For IT Candidates

IT candidates face fierce competition in the market

Since technology and data are the core sectors during a digital transformation, a large number of candidates is required. Besides, while both banks and non-banks compete fiercely for IT candidates, their backgrounds can be varied, and banking experience is not an essential qualification. 

Banks have always struggled to recruit and retain IT candidates due to their non-commitment and countless job options. It leads to competition between companies in the market to attract candidates and enforcing banks to offer them fair salaries, bonuses, and social welfare policies.

IT candidates barely meet the needs of digital transformation

It is uncommon for IT applicants to satisfy all corporate requirements. Therefore, it is acceptable when the candidate satisfies 50% to 70% of the hiring standards. Employers can gradually lower or reduce the recruitment criteria as the number of IT candidates with extensive experience falls short of market demand. They accept hiring engineers with little experience to train and retrain.

Since digital transformation has been a newly developed sector, IT personnel in the current market lack extensive experience in digital transformation. English proficiency, business mindset, and communication skills are not advantages of IT candidates. In addition, the fact that they change jobs quickly can lead to a lack of deep understanding of the products and services of an industry, and it is, in this case, banking. There is also a substantial demand for human resources in the data science and data analysis sectors.

Digital transformation in banking: challenges for candidates

The sophisticated digital transformation poses challenges for IT candidates. Digital transformation is a model that necessitates large-scale and synchronous investment, agility, and rapid response. Candidates who are immobile and accustomed to the traditional way of working will fail to adapt and might be resistant to change.

Opportunities for candidates in digital transformation

IT candidates are equipped with agile and scrum and have the possibility of working in international firms and being up to date with the latest technology after becoming acquainted with many skills by attempting various projects. They will have the key to organizational success and broadening experiences to foster digital transformation in other fields if they advance these potentials.

In banks, digital transformation typically results in a significant personnel change within just two or three years. As a result, candidates in this field face both opportunities and risks in changing jobs across their career paths.

The role of foreign and Viet Kieu (overseas Vietnamese) candidates

Advantages and challenges of foreign and Viet Kieu (overseas Vietnamese) candidates.

Candidates who are foreigners or Viet Kieu (overseas Vietnamese) often take up key positions or be leaders in IT, data or Digital Sales, Marketing, and Product.
The strength of these candidates is that having worked in developed markets around the world on digital transformation assists them with methodical mindsets and being customer-centered. 

They can also manage suppliers in the digital transformation sector and have previous implementation experience. Thus, they can shorten the trials and implement the digital transformation process for the bank where they work.

Asian, European, and American candidates with working experience in Southeast Asia are preferred.

In the hiring process, banks frequently favor applicants from leading nations in banking, finance, and digital transformation, especially those in Europe and the United States. However, because of the geographical, cultural, and language differences between the nations, many foreign candidates encounter challenges during the hiring process. Therefore, banks have also recently prioritized recruiting candidates from neighboring countries such as Singapore, Hong Kong, Thailand, India, or European and American candidates who have worked in ASEAN (South East Asian countries).

Part 4: Recommendations of Navigos Search for banks and candidates

For employers

• Improving recruiting methods to approach suitable candidates and accelerating enhancing recruiting appropriateness compared to the job market. 
• Conducting appropriate HR policies in attracting candidates.
• Building Corporate Branding and Employer Branding.
• Using varied recruitment solutions such as online job portal, headhunting, and RPO.

 For candidates

• Improving the knowledge and skills related to digital transformation.
• Improving communication and problem-solving skills as well as critical thinking.
• Being adaptable to new working techniques such as Agile and Scrum.
• Improving English proficiency.
• Regardless of having options, a candidate always needs to build a strategy and vision for a sustainable career path.
• Taking part in courses such as seminars/webinars and widening networks as well as relationships in terms of digital transformation to gain in-depth knowledge in a particular field.

Click Here to Download