Necessary skilling trends for BFSI professionals in India | The Financial Express

Necessary skilling trends for BFSI professionals in India

According to India Skills Report 2021, internet businesses, software, hardware, and the BFSI took the top spot for increased hiring.

India is expected to be the fourth largest private wealth market globally by 20284.
India is expected to be the fourth largest private wealth market globally by 20284.

By Ritwick Udayan

The Indian Banking, Financial Services, and Insurance (BFSI) industry is evolving fast with the rapid adoption of technology and aiding in becoming a five trillion-dollar economy. Currently, the BFSI sector has a market cap of Rs 90 lakh crore, and its share nearly increased to 12% of the GDP in FY22 compared to two percent in the 1950s – a potential rise that speaks volumes about the sector and our economy.

The UPI transactions have witnessed an unprecedented rise at Rs 7.30 billion transactions worth Rs 12.11 trillion till November 2022 and is backed by the RBI’s “Payment Systems Vision 2025” document that expects India’s digital payment transactions to increase by 3×3. McKinsey’s Global Banking Annual Review estimates the concentration of growth in emerging Asia, China, Latin America, and the United States to account for about 80% of the estimated $1.3 trillion in global banking revenue growth from 2021 and 2025. These trends would create tremendous valuation and opportunities for the BFSI sector across domains.

The industry that comprises Banks, Asset Management Companies, Insurance – Life and Non-life, NBFC, Distribution and Broking has made it vulnerable due to fraud and mismanagement. The Reserve Bank of India (RBI) reported 9,103 bank fraud cases across India, making cyber threat monitoring and cyber compliance a much-needed domain. The RBI also rolled out a pilot scheme for a digital rupee, providing a greater impetus to India’s digital economy, which will need a highly skilled workforce.

The National Centre of Financial Education (NCFE) Financial Literacy and Inclusion Survey 2019 data stated that only 24% rural population were financially literate and just 33% in urban India. In a digital age, mobile banking, online payments and insurance have dominated proceedings. World Bank 2021 Global Findex Database pegs our unbanked population to be as high as 230 million. The BFSI sector is indispensable from the skills perspective, and developments in human resource management and skill development and management will effectively shape and pace India’s digital finance revolution down to the last mile.

Changing Trends

Rising income levels, increasing risk appetite, and urbanisation are fuelling growth in Tier II and III cities. Increasing distribution capabilities will shape the sector in the years to come. Multiple factors will impact growth in the BFSI sector, including growing income levels, increasing client sophistication and a steady decline in personal income tax rates.

India is expected to be the fourth largest private wealth market globally by 20284. There is a growing willingness in the middle class to seek financial advice and let professionals handle personal finance. India’s resilient economy, capable of relatively high GDP growth, will also see the increasing complexity of financial products and their risk profile in 2023. With varied employability opportunities, there will also be a demand for skilled personnel. As the banking, fintech, and microfinance sectors become more customer-centric, the focus will be on evolving skill sets, productivity, and efficiency.

By FY2023, the total workforce in the banking sub-sector — one of the largest employers in the entire spectrum of the BFSI sector is expected to reach Rs 16.69 lakhs. According to the BFSI Sector Skill Council of India, Digital Banking, Cybersecurity, Artificial Intelligence, Robotics Process Automation (RPA), Data Analytics, Debt Resolution -and Recovery, and Risk and Compliance are fast-emerging verticals in banking. It will need a mix of tech-led talented professionals that are specialists, generalists and business management oriented.

Growth potential

As per India Brand Equity Foundation, in the past five years, the total number of lives covered nearly doubled from Rs 12 crore to 23 crore, presenting a lucrative opportunity for skilled BFSI professionals to enter this growing field. Moreover, the per capita GDP of India is expected to grow to US$ 3,274 in 2023 from US$ 2,135 in 2018. It will result in higher household savings that can be channelled into instruments like insurance and pension policies.

The number of Ultra High Net Worth Individuals (UHNWI) is significantly increasing, and according to KnightFrank’s findings, the UHNWI population would grow by almost 40% between 2021-2026.6

As per industry estimates, the Indian fintech industry is estimated to reach US$ 150 billion by 2025. With India’s housing and personal finance sectors forming as the drivers of the economy, an increase in the working population and growing disposable incomes will also raise demand for banking and related services.

Evolving competencies

According to India Skills Report 2021, internet businesses, software, hardware, and the BFSI took the top spot for increased hiring. As India’s demographic dividend ensures a younger workforce, the development of niche skill sets and the lengthening of the learning curve will be crucial for success in the BFSI sector. The sector will expand its presence in rural markets, tier II and tier III cities.

Employment in the financial sector will require different skills. While entry-level employees and young managers will need soft skills like innovation and analytical thinking for day-to-day activities, mid-level management will mandate strong customer-oriented processes for overall workflows and revenue generation. They will also be responsible for building process capabilities, where upskilling and cross-skilling will play a big part.

The top-level management will need to reinvent and constantly pioneer change to keep up with the ever-changing BFSI landscape. They will also be responsible for developing a learning and growth mindset for BFSI professionals and nurturing talent through upskilling programmes. With professionals continuing to advance their careers, the junior-level workforce would require regulatory certifications, and those at the mid-level might require high-level skill training.

The author of this article is Ritwick Udayan, head, Employability Business, TimesPro.

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First published on: 26-02-2023 at 10:12 IST
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