Talent Retention A Major Challenge For Banking Sector: Report

Banking CEOs are optimistic about the growth of capital markets. Two-thirds (66 per cent) are confident about the growth prospects of the banking and capital markets industry over the next 3 years

The report states that 81 per cent of respondents ranked generative AI (Gen AI) as a top investment priority

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Attracting and retaining skilled talent continues to be a major challenge in the banking sector as the industry strives to become more technology-driven, according to the latest Banking CEO Outlook 2024 report by KPMG. The survey gathered insights from 120 global banking leaders and revealed that despite facing significant hurdles—including talent shortages, cybersecurity threats, and an evolving economic landscape—bank CEOs remain optimistic about the sector’s growth prospects. This optimism is primarily fueled by the potential of emerging technologies, especially generative artificial intelligence (GenAI), which leaders view as pivotal to driving business transformation.

Banking CEOs are optimistic about the growth of capital markets. Two-thirds (66 per cent) are confident about the growth prospects of the banking and capital markets industry over the next three years. Furthermore, 68 per cent are optimistic about the global economic outlook despite the ongoing challenges posed by geopolitical tensions and macroeconomic uncertainties.

The report states that 81 per cent of respondents ranked generative AI (Gen AI) as a top investment priority, viewing it as essential for technological advancement and organisational transformation. Additionally, 76 per cent emphasised the importance of experimentation in unlocking Gen AI’s full potential, with many encouraging employee participation in these initiatives.

The report reveals that attracting and retaining skilled talent remains a key challenge, particularly as the banking sector undergoes technology-driven transformations. While 66 per cent of CEOs feel their organisations are well-prepared to upskill employees to leverage Gen AI, competition for specialised talent in AI, cybersecurity, and environmental, social, and governance (ESG) areas remains fierce. Moreover, 92 per cent of CEOs expressed a willingness to reward employees who make the effort to come into the office.

The report further states that cybercrime and security risks were identified as the biggest threats to business growth, with 81 per cent of CEOs listing them as top concerns. Banks are leveraging AI for fraud detection, faster data analysis, and increased productivity to address these challenges. Following cybersecurity, the cost-of-living crisis (80 per cent) and evolving trade regulations (73 per cent) were highlighted as significant challenges over the next three years.

ESG remains a major focus, with 58 per cent of CEOs expecting substantial returns on sustainability investments within three to five years. Banks increasingly view ESG initiatives as fundamental to long-term growth and responsible business practices, said the report.

Commenting on the findings, Hemant Jhajhria, Partner and Head of Consulting at KPMG India, said, “It’s encouraging to see confidence from industry leaders in the outlook of the global banking sector, as well as their proactive and positive inclination towards adopting emerging technologies like Gen AI. Banking CEOs seem to be focused on accelerating their digital transformation.”