Flip the Script: How Financial Institutions are Turning a Strained Labor Market into a Competitive Advantage

Is the labor crisis stunting your organization's progress?

If you’re a credit union or bank, your relationship with your members and clients is likely more tenuous than ever before. According to PwC’s Future of Customer Experience survey, nearly 20% of customers will leave a “brand they love” after a single bad experience. Almost three out of five customers (59%) will walk after “several” negative experiences.

And what’s the number one reason your customers will leave? Slowness to innovate new products and services, according to a recent study jointly conducted by PYMNTS and PSCU.

The brand loyalty that credit unions and banks have relied on so heavily for so long is waning quickly. The signs are everywhere. Another study by The Harris Poll found that 40% of financial consumers are willing to leave their primary financial institution (FI) for a better digital banking experience. Further, despite their preference for banking with a community-based FI, 56% of respondents said their local credit union or bank’s digital offering did not meet their expectations.

The growing consumer demand for better digital banking experiences is driving an acute need among credit unions and banks to accelerate the pace of digital innovation and potentially undergo a core banking transformation. That means FIs will need to lean heavily on their IT staff for new product development to meet rapidly evolving consumer expectations.

How is the "Great Resignation” disrupting digital innovation?

According to a recent BankRate job-seeker study, more than half of Americans currently in the workforce are likely to seek out a new job within the next 12 months. And if you have an open position you need to fill, the pool of available candidates has shrunk considerably. In the wake of the summer of 2021’s “Great Resignation,” there are 3.2 million fewer workers in the labor market today than there were before the shutdowns due to the COVID-19 pandemic that began in the spring of 2020.

The current labor crisis is hitting Financial Institutions particularly hard. The Financial Brand reports that 4 out of 5 financial institutions are worried about staffing shortages.

“I have really never seen anything like it currently,” Stranton Davis, Chief Experience and Innovation officer of Avidia Credit Union, told The Financial Brand, referring to the current labor crisis. “It is very disruptive. This impacts stress levels and employee morale.”

To compete for qualified candidates, FIs, like organizations of all types, are turning to traditional approaches, such as raising wages, more attractive benefits, and flexible work options. But if your competitors are also taking the same approach, this is hardly a recipe for differentiating yourself, attracting the most qualified candidates, and retaining valued employees.

To address the hiring conundrum facing FIs of all types and sizes, particularly when it comes to competing for skilled IT staff, it may be worth considering the problem from a structural point of view. As some FIs have already realized, workload automation and orchestration can alleviate the workforce crisis they face in some fundamental ways, and help drive productivity and innovation as well.

What is workload automation and orchestration?

If you’re like most FIs, your IT department is functioning at or near capacity. Most teams are managing growing workloads across increasingly complex, often hybrid environments. Couple this with the current state of the labor crisis, and you have a storm brewing that represents a potentially debilitating vulnerability for your FI.

Workload automation and orchestration can address this institutional risk in important ways. At a basic level, an automation platform schedules and executes business-critical tasks that are routine in nature. Beyond simple batch scheduling capabilities, however, the best workload automation software is flexible enough to be able to create self-service workflows, deploy server updates, and monitor an entire system from a single user interface.

Some FIs have also deployed workload automation and orchestration software to increase visibility and control when outsourcing their core system. And for FIs that have already outsourced, automation can help them maximize the value of outsourcing.

Workload automation and orchestration not only provides a platform that can serve as a springboard for digital innovation in your bank or financial institution, it can help you “flip the script,” turning the current strained labor market into a competitive advantage for your FI.

4 ways workload automation can “flip the script”

Financial institutions don’t have to be entirely at the mercy of a labor trend that leaves them hamstrung and unable to innovate. Following are four ways that workload automation and orchestration can help you flip the script, build organizational resilience, and gain a competitive advantage in the process:

1. Eliminate routine tasks.

Workload automation software schedules and manages multiple routine processes across computing systems in your organization without the need for ongoing staff intervention. FIs can use workload automation to carry out critical data warehousing functions in addition to regulatory reporting, online banking, ATM transactions, and other business-critical operations.

An application for WLA software can be as simple as setting an auto-response email that outlines common troubleshooting tips when your IT team gets a support ticket. Or, automation can be deployed for more complex tasks, such as monitoring for fraud, reviewing new account applications, or processing ACHs in real-time rather than in a once-a-day batch that bogs down all other processes and may require staff overtime.

By eliminating the need for direct staff intervention for routine tasks – not to mention the errors that tend to accompany manual data entry – workload automation frees up actual staff hours that can be redeployed in other, more strategic ways, granting them time to think more creatively about issues of digital transformation that can help you stand out in the financial services industry.

2. Redeploy and innovate.

It’s no secret that the future of banking will be driven by technological innovation and digital transformation. Your members and clients are quickly gravitating toward mobile banking solutions, and, as the research shows, they expect their financial institution to keep up.

Once workload automation is implemented and IT staff are freed from routine, often monotonous tasks, they can be reassigned to work on more initiatives that align with member and client needs and expectations. Untethered from repetitive, labor intensive tasks, key IT personnel can also assume more leadership responsibilities and have more of an impact on your organization’s strategic direction, pushing your financial institution toward a truly innovative transformation.

3. Improve employee morale and, in the process, increase retention.

Yes, workload automation reduces staff dependency for operationally necessary tasks. And, in the process, your organization will be less acutely impacted by the strained labor market of the “Great Resignation”. However, this is not about eliminating people; it’s about eliminating the drudge work your staff are consumed by.

In doing so, workload automation can improve the morale of your existing staff and thereby increase employee retention. And satisfied employees tend to attract more attractive candidates when your organization has open positions to fill, giving you a competitive advantage when hiring.

4. Preserve institutional knowledge and streamline onboarding.

Workload automation documents essential processes and therefore mitigates the risk of the loss of institutional knowledge when your organization does experience staff turnover. Your automation platform will serve as a repository of business-critical operations that you can use to streamline the onboarding process for new hires as well.

Further, because robust automation platforms minimize the need for coding and scripting know-how, your organization will not be as reliant on specialized skills, and you’ll be able to recruit from a larger pool of candidates. When you are able to fill vacancies more quickly, the opportunity cost of the time and resources your organization expends on recruiting highly specialized staff will not be as high.

How hard is it to start using workload automation?

If workload automation and orchestration can help alleviate some of the problems other organizations are facing in a strained labor market while also enabling ongoing innovation for your financial institution, how easy is it to get started?

A scalable automation solution that adapts as your organization grows can be deployed in a matter of weeks (not months) when you work with the right partner. It’s important to select a partner that has deep experience working with and understanding the needs of credit unions and banks so that the deployment can be specifically adapted for your organization's unique requirements. An experienced partner can also work directly with your IT team to suggest automation for additional processes based on their experience working with other FIs.

If you’d like to learn how SMA Technologies can help to make your FI less dependent on a strained labor market while also helping redirect your internal resources to more strategic initiatives like digital transformation, contact us or request a demo of OpCon, our robust automation and orchestration platform.