Traditional banking, as we knew it, is disappearing, gradually giving way to new forms of banking. Digital transformation is advancing by leaps and bounds. The percentage of internet banking users in Spain continues to grow year after year, although it still remains below the European average, according to data from the Statistical Office of the European Union. The ratio in our country stood at 46% in 2017, still lower than the 52% of EU countries, 62% in France, and considerably behind the Nordic countries, where the penetration rate of digital banking already exceeds 90%. We still have ground to cover, but no one doubts that the banking of the future is digital.
Most Spanish banks have been working on their digital transformation for years. One need only read their annual reports to realize the great effort and substantial investments they are making in technology to modernize their structures and adapt to the digital world.
The greatest asset that banks have continues to be their personnel. However, this classic statement, one of the timeless paradigms of Spanish banking, must be subject to a process of permanent review. If people do not evolve as the business model does, their difficulty in adapting can become one of the main problems for institutions, to the point of putting their survival at risk. Therefore, today more than ever, it is necessary to understand training as an investment in the future, as well as an essential, cross-cutting, and priority element in people management. Training is and will be key in change management.
Traditional professional profiles have also evolved. For more than two decades, virtually all new hires in banking have held university degrees, so now over 70% of employees are graduates. The commitment to hiring engineers, cybersecurity experts, Big Data analysts, or mathematicians is further proof that times have changed. If we add to the excellent academic preparation of new hires the training and experience acquired throughout their professional careers, we can affirm that today we have the most and best-prepared workforce in banking history. And this allows us to be optimistic about the capacity of institutions to successfully face the major changes ahead.
Digital transformation is not the only training challenge that institutions face today. Until now, banks developed their training policies with complete freedom, with the sole exception of mandatory training on specific topics such as fraud and money laundering prevention or occupational hazards. Until now, in a context of recurring and predictable banking business, the primary objective of institutional training plans was the development of skills and competencies, both managerial and commercial, risk analysis and management, and knowledge of banking products and techniques.
However, new regulatory requirements, particularly European Union Directive 2014/65 known as MiFID2, have changed the approach. With the objective of strengthening transparency and investor protection, this regulation establishes the obligation to ensure that personnel providing advice or facilitating information to clients about investment services possess the necessary knowledge and competencies to do so and, furthermore, have been appropriately evaluated through periodic examinations.
This measure represents a substantial change for both banks and employees. It gives greater relevance to the professional and, in a way, provides prestige before the client after the deep crisis from which we are still emerging has considerably and unfairly damaged the image of banking workers.
The National Securities Market Commission has published the criteria for personnel evaluation who inform and advise in its Technical Guide 4/2017. It indicates that entities subject to this obligation “must have procedures for continuous training and evaluation of personnel that ensure they act honestly, impartially, and professionally, in the best interest of clients” and that these procedures must also include periodic evaluations of employees. From now on, the way of selling and marketing financial products must be based on something more than proverbial trust.
Digital transformation and compliance with MiFID2, in marketing and advisory functions, are the two most important challenges that the banking sector must face in this new era. Its future in the next decade is at stake. The banking model and client relationship model are changing, although the essence of the business remains. It is time for training, and Spanish banks are doing their homework well.
Juan Vives, Labor Advisor to the Spanish Banking Association
