The Human Challenges of the Digital World: The Paradigm of Employee Expectations in the Banking Sector

Business Process Re-engineering (BPR) is a drastic and transformative means to help organizations rethink their existing processes from the fundamentals to totally re-engineer or to transform or to improve them. The aim is to achieve big cost reductions and a strategically differentiating and better customer service. Banking business processes are differentiated into three key elements: Customer inquiries or requests which form the Inputs, the Processing of data through some stages and various necessary internal channels and the delivery result as expected by bank and customer forming the Outputs. BPR predominantly mediates in the data processing part to alter it to become time and cost effective. Information technology has been regarded as the key enabler for the radical changes as seen after BPR exercises. A digital revolution of the processes is the most important goal for nearly all banks across the world. Use of Information Technology tools promises to deal with the numerous external and internal threats and pressures that the banks face. The mounting costs of multiple regulations and difficult customers who continuously seem to prefer more and more expediency and a coolness quotient are a few challenges that are overwhelming the banking sector. The hub of banks’ digital makeover is Information Technology, coupled with customized products, enabled by simplifying the processes to the maximum and ensuring offering as much convenience to the customers as possible by developing multiple delivery channels.As the banking picture moved more towards the customers’ orientation from the bankers’ perspective, banks started offering a host of services like mobile banking, loans, internet banking, credit/debit card facilities, stock broking, and investment options among the vast pool of other services. The majority banks in India, particularly the large private sector lenders – HDFC Bank, AXIS Bank and ICICI Bank are now at different stages of digital promptness. HDFC Bank, ICICI Bank and AXIS Bank are the biggest private sector banks in India by Market Capitalization and proud members of the Big 4 banks of India – the 4th being the State Bank of India (SBI). These banks have adopted technology advancements swiftly enough to be called the Market Leaders of BPR projects in the Indian banking sector. These banks have re-imagined and re-engineered their processes using the latest tech-tools and software viz. Chat Bots, Artificial Intelligence (AI) led engines and Robotics Software. Even though these may be in their embryonic stages, these technologies would fundamentally alter the banking scenario sooner than anyone expects. Numerous banking experts foresee these technologies to take maximum five years to digitize all banking and trade ecosystems but Blockchain technology – the new kid on the block - has the latent to be the real game changer and may disrupt the complete financial systems. Of late, several Indian banks are feeling vulnerable and face a dangerous competition from the fresh bank licensees which are indisputably extremely digitally savvy competitors. Digital technology, per se, is not proving to be difficult to either procure - it is usually delivered to the client (banks) which work in partnership with external tech-based firms. The Software and Apps are being developed rapidly and being installed efficiently for example, digital tools like the Mobile apps are very convenient to use. The main point that concerns the banks and customers in a similar way is Cyber-security. Technology, by its very nature, remains permeable and over a period of time reaches one and all. It is at this point that we realize that IT based tools are ‘enablers’ of BPR projects or Digitization of banks. The ‘strategic differentiators’ are and will be the people - since any such project also affects the banks’ culture, behavior, structure and work-processes.Digitization of a traditional bank is considered to be akin to redesigning an airliner while it is flying. The top level management and senior managers of the organization ought to have a towering degree of belief in the digital technologies, digital future and fortitude to see it through major surgical changes while continuing to deliver their quarterly performances. More importantly, the whole organization needs to be completely involved. Line managers need to defend the redesign and its completion with tremendous willpower. As digital technology throws up opportunities for sweeping new ways to run a process, it challenges prevailing paradigms. The new processes may or not be permissible under regulations and may pose new risks that may not have been anticipated earlier – another area that needs utmost care. Banks are going about digitization by crafting multidisciplinary teams that are jointly responsible end to end - from the design stage to full-scale roll-out of the new process. Since a completely new set of metrics needs to be measured, employee key result areas (KRAs) are being re-calibrated. The front-end executives dealing with bank customers now have customer-centric KRAs. The performance management systems are being changed. People who have gone through a successful digitization have felt the environment during the project to be as stressful as that during a post-merger integration - in terms of commitment of efforts required and engagement of the bank employees at all levels. Many banks continue to find it extremely challenging to drum up this level of vigor and enthusiasm for the on-going digital programs. Hence, it becomes vital to understand the importance of the ‘human’ role in these changes.Despite the astonishing growth and achievements witnessed by the banking sector in India, most banks are now discovering that, of late, they have been pushing themselves to the extremes. There is a kind of saturation sneaking in the banking industry. Difficult consumers, the anxiety to develop more and more business and amplify profits, hostile rivals and the need of a strong mechanism to detect and prevent banking frauds while delivering growth is making the banks take a rational view of their operations post the technological changes and realize that organization factors and people issues are the core issues – they can either be strategic assets or the real stumbling blocks. It seems, even in the digital world, it is the human angle that makes all the difference. Keeping this perspective in mind, it becomes important to explore and evaluate whether the Human Resource Division of banks has an important role to play in the BPR programs and in what capacity. A comprehensive review of literature points out that HR’s roles in BPR programs has been largely perfunctory and restricted to being a facilitator of BPR centric training programs. Nevertheless, the literature reviewed emphasizes upon the banks to mull over a more strategic role for the HR to achieve remarkable improvement in the outputs derived from BPR programs.The purpose of this paper is to empirically analyze bank employees’ perception regarding HR’s role in BPR programs and their expectations from the HR division. The objectives of this research are: to analyze the perception of and expectations of other bank employees from the role of their bank’s HR personnel in BPR programs and to compare the selected banks vis-a-vis the gap between perception and expectations from the role played by HR personnel in BPR programs. A questionnaire was designed and mailed to the Operations and Front-line executives of the selected Indian Private Sector banks. Suitable hypothesis were developed to assess and evaluate the perceptions and expectations of bank employees. The data obtained from the responses was used to perform the empirical analysis. Various parametric, non-parametric tests and descriptive statistics formed the parts of the extensive empirical analysis. The empirical analysis reveals that even though there is a strong perception of HR playing an important role in BPR programs, the expectations from HR remain very high. This study is subject to the characteristic limitations of a survey research. The research findings can make a very significant contribution to banks and other stakeholders.