The banking industry is a dynamic sector that heavily relies on a skilled and motivated workforce to deliver efficient services and maintain customer satisfaction. Amidst a competitive drive to secure a more significant portion of the saturated market, banks are experiencing robust loan requests. The previous fiscal year saw a 15% surge in credit demand, and this trend is anticipated to continue this year, with an estimated growth of 10-12%, primarily propelled by the need for retail loans.
With high demand for services and expected customer preferences, banking employees need help to cater to customer demands. Employees are overworked, stressed, and experiencing burnout more than ever before. The desire to shift where we work is just the beginning—employees also want to change how they work.
In this article, we will guide you through the reasons for the high attrition rate in banking and how robotic process automation can help reduce the attrition rate in banking and boost employee retention.
Understanding the Attrition Challenge in Banking:
Attrition happens when a high demand for industry services and companies pushes productivity. And this constant challenge of employee retention negatively impacts operational stability and customer experience. As per a report, the attrition rate in banking affects 50% of the client base and spans all products and segments in different ways.
But what are the key factors that are driving the attrition rate in banking? Let’s discuss some factors that are driving the attrition rate in banking.
- HDFC Bank’s CEO Sashidhar Jagdishan, in the FY23 annual report, says, “The HDFC Bank has experienced an increase in attrition over the last financial year; one reason that can be attributed towards this increase is a post-Covid phenomenon that may have prompted the younger workforce to recalibrate what they ‘want from their lives and looking for flexibility in their jobs.
- Santosh Borkar, general manager at NKGSB Co-operative Bank, in a survey, stated that for middle management, factors such as recognition and better remuneration prospects are critical. At the same time, for freshers, it could be a range of factors driving the attrition rate.
- Additionally, competition from NBFCs and increasing technological adoption are other factors increasing the employee attrition rate in banking
- Moreover, in May, RBI Deputy Governor MK Jain warned banks that they face operational risks due to factors such as high attrition, lack of succession planning, skilling of staff and outsourcing, and they need to attract and retain talent.
Reducing attrition in the banking industry requires a holistic approach that addresses these multifaceted factors. RPA in banking is one such solution that fosters a supportive work environment and provides growth opportunities to offer competitive compensation. Let’s see further how robotic process automation in banking can help the banks to reduce the attrition rate.
How can Automation Help the Banking Industry Reducing Attrition Rate?
Banking automation tools and solutions can be the savior of the banking industry in reducing attrition and accelerating the employee retention rate. Technologies like RPA and AI offer support that can alleviate some of the factors contributing to attrition. Moreover, the key to progress isn’t merely involve automating business procedures but rather changing how individuals perceive automation within the workplace.
Let’s have a look at some of the ways banking industry can use automation solution to positively influence employees productivity and reduce attrition rate-
-
Help Employees with Digital Assistance
Nothing can put employees to sleep faster than repetitive and dull work. Right from the KYC process, data entry, reconciliation, and data verification to fraud detection and account maintenance, there is a lot on an employee’s plate to serve. As per a survey, it takes 31-60 days to perform KYC for a single corporate client.
Automation solutions like RPA and AI can put a stop to the manual processing of data and enable banking employees to work on complex tasks without being overwhelmed. Additionally, by using RPA bots in banking processes, employees can seamlessly interact with customers 24/7, create omnichannel support, get AI agent assistance for customer queries, and create self-service portals for faster resolution. That’s how robotic process automation in banking reduces the excess strain on the employee’s shoulder and fosters a better employee experience
-
Offer Personalized Training Support
HDFC Bank CFO Srinivasan Vaidyanathan, in a survey, said the highest attrition of 40-50 per cent was in entry-level positions, whereas the senior-level positions were much lower at around 7%. It means that the younger talent in the workforce is also leveraging the market situation to find better opportunities.
Here automation can help the banking industry to retain the younger talent. Banking organizations can create personalized learning paths for each employee based on their skill gaps and career goals. This can be done through learning management systems (LMS) that track progress and suggest relevant courses. Also, using these learning management systems, managers can track the employee’s progress and pave the way for better CTC and recognition respectively. -
Use Automation to Hire the Right People
The banking industry can leverage automation tools like RPA and AI technologies to refine their hiring strategy and automate the recruitment process. Through the automation of various tasks, such as candidate filtering, documentation, interview scheduling, and follow-ups, the BFSI sector can streamline its hiring process and improved the overall interview experience. This strategic shift has proven essential in attracting and securing top-tier candidates, as it eliminates delays and bureaucratic hurdles that might cause potential hires to slip through the cracks.
Conclusion
In conclusion, the high attrition rate in the banking industry presents a significant challenge, impacting operational stability and customer experience. Several factors drive this attrition, including the changing expectations of the younger workforce, competition from NBFCs, and increased technological adoption.
Automation can positively influence the banking industry in multiple ways. It can alleviate employees’ burden by handling repetitive tasks such as data entry, KYC processes, and account maintenance, allowing them to focus on more complex and engaging responsibilities.
However, these are just some ways that we discussed to battle the high attrition rate in banking. There is a lot of opportunity out there for the banking industry to reduce attrition rate, all that the banking industry needs is to get smart about the changes that industry demands and solutions need to be adapted.