50% leadership of PSBs needs to do a catch up on digitisation: Study

Half of the senior management leaders at Indian public sector banks (PSBs) currently need to build digital capability to rapidly transform their bank, findings of a study done by Deloitte India revealed.

The study titled ‘Deloitte’s PoV on Public Sector Banks’ was based on the study of over 100 PSB leaders. It said that digital transformation is taking place in banks at a rapid pace and leaders across levels need to be adept in implementing it.
 

According to the study, digital transformation is happening in three areas at PSBs. First, in the way products and services are being taken to the customers. Second, in operations and service simplification. And third, in terms of cybersecurity and enterprise risk. But for PSBs, the focus is also on social responsibilities like financial inclusion etc.

“The PSB leaders therefore are caught in the middle of transforming swiftly and upgrading the ways of working and process of working in line with transformation. Further complicating matters is the large and diverse nature of operations and business that any PSB manages,” it said.

The senior management at banks typically includes chief executive officers, assistant CEOs, chief financial officers and any other senior executive officers. The middle-level leaders include branch managers, divisional managers, general managers etc. The junior leaders include probationary officers and clerks, among others.

Deepti Agarwal, partner of Human Capital Consulting at Deloitte India, said that for senior leaders at these banks, the focus is more on operational details and there is a gap in how emerging digital trends are implemented.

“The ability to be nimble, to be agile and to be able to pick up a lot of trends in a quick manner and implement them in their own ecosystem is something where we saw that these leaders could be better at,” she said.

Prakhar Tripathi, head of Financial Institutions Practice (India) at Deloitte India, said that the digital capability in the study does not mean the senior leadership at PSBs must possess skills like coding etc. However, they must have the ability to drive this digital transformation and ensure its adoption.

“These are the leaders who are appreciative of the changes that are happening in the market, appreciative of what client needs, are fully versed with what the regulator is asking and thereby also cognizant of what is happening internally in the bank,” he said.

Agarwal added, “So, the ability to pick up on the digital trends, to pick up on the market dynamics, to pick up on the disruptions that are potentially happening by the startups and be able to act on them and to be able to implement in them in the organisation, is where we saw a little bit of a gap.”

The study also highlighted that the appetite for digital change was higher in relatively junior positions.

“The current junior management in PSBs offers respite as they seem to be the most likely to identify and introduce changes in the way of working by taking risks and challenging the status quo,” the study said.

“Middle management, on the other hand, seems comfortable in trying new operational ideas but prefers adhering to set conditions, rather than changing the rules of the game actively,” it added.

“This is not to take away from the experience or the wisdom that we find our senior leaders bringing to the table,” said Amrita Siyan, director of Human Capital Services at Deloitte India.

“But the banking landscape as a consequence has changed so drastically that we see greater agility in our younger, middle managers as well as our junior managers.”

The study suggested that greater support and hand-holding are needed at the top management level to “strengthen and practice the muscles existing at the junior level”.