Manpower trends in the Banking Sector in India

Overview of the Indian Economy and Banking Industry:

The growth story of the Indian Economy is on course despite temporary setbacks owing to specific global and local factors. India has been growing at around 7% to 9% in the last few years while developed Western economies are growing at less than 4%. India, along with emerging economies like China, Brazil and Russia are expected to power the global economy in the next few decades. Factors like liberalization, globalization and the emergencies of a strong and aspirational middle class are the key underpinnings of this development and these factors are here to stay. Such high economic growth will have a massive positional growth impact on the Banking Industry.

The pace of development for the Indian Banking Industry has been tremendous over the past decade. Many private sector banks have shown aggressive growth and achieved scale and visibility through customer focus and innovation. Many public sector banks have implemented clear transformation and growth strategies. The future growth prospects of India’s banking sector remain high, bolstered by sound economic growth prospects. The Banking Industry is expected to grow at a healthy rate of over 20% for the next 2 to 3 years. While Retail banking will be the key growth area for banks, other areas like Corporate Credit, SME Banking, cross selling of other financial products and services like Insurance, Mutual Funds, fee-based sources of income and technological upgradation will also be key growth drivers. The stress will be on expansion of branches and financial inclusion

Manpower Requirement of the Banking Industry:

Banking, one of the fastest growing segments of the economy, too faces challenges of scarcity of resources and skilled manpower. Such skilled manpower is not easily available in adequate numbers to meet the growing requirements of the Banking Industry due to normal attrition, competition and faster growth in business. The position is going to exacerbate further for the banking system as a whole, due to superannuation of many experienced bankers in the Public Sector during the current decade.

With only 30-35% of the population financially included, the Indian public is still underserved by formal banking. This will lead to issue of new banking licenses and formulation of innovation model to serve the people which are not covered by traditional banks. With the planned announcement of new licensing policy, more banks are expected to be established and requirements of manpower with the requisite skill set are expected to increase many-fold. There is thus a large current as well as the future demand for trained manpower in banking.

The banks will require a large number of people trained not only for specific skills in the banking domain but more importantly in customer service skills, selling skill, banking application software skills and an infectious positive attitude. In short, a modern banking professional for the modern banking sector is the need of the hour.

Growth of Allied Industries:

Allied to the Banking Industry, India’s financial services sector will enjoy generally strong growth during coming years, driven by rising personal incomes, corporate restructuring, financial sector liberalization and the growth of a more consumer-oriented, credit-oriented culture. This will lead to increasing demand for financial products, including consumer loans (especially for cars and homes). Large amount of savings are likely come to the capital markets through direct investments in equities or money flows through mutual funds as well as through insurance and pension products. Hence, there is a crying need for a large pool of New Age professionals with a good understanding of the functioning of equities, commodities and derivatives.

India’s Insurance sector has come full circle from being an open competitive market to nationalization and back to a liberalized market again. With the recent changes in the regulatory guidelines, the industry is maturing. Many private sector insurance players have broken even and moved to profits. Powered by an economy which is slated to grow at 7% to 9% and the fact that India is under-penetrated in insurance. This industry is also expected to have a healthy growth of over 15% in the next 3 to 4 years. The industry will witness extensive action to reach to large untapped markets and launch innovative products thus paving way for more trained insurance manpower.