“Machines cannot substitute human judgement in banks”: Deodutta Kurane

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Deodutta Kurane, group president and CHRO, YES BANK, has faced all sorts of challenges during his career. He started off in the manufacturing sector, and then shifted to the banking, financial services and insurance sector (BFSI) with liberalisation. Today, this HR leader is managing a new-age bank with an altogether different set of challenges, with digitisation impacting the business the most. In an interview with Sonali Chowdhury of HRKatha, Kurane shares the effect of digitisation in banking and the way forward. 

You moved from manufacturing to BFSI during the initial years of your career. You have experienced working with two completely different workforces. What are the key learnings from these two diverse sectors?
I joined Greaves Cotton — an engineering firm manufacturing diesel engines and gensets for various applications — in 1981, and then moved to Bharat Forge from 1987. In the manufacturing sector, the focus was then on personnel management, industrial relations, and collective bargaining with unions. Implementation of many global practices, such as quality circles, kaizen, TQM, productivity focus, and so on were also significant. This called for huge training interventions and change-management practices.

The law of the land provides that employees can form unions, but the nature and character of unions are changing. Employers have also become more aware and keen to provide better facilities. 

It was a different kind of professional challenge, where the focus was on the blue-collar workforce and the main task was dealing with changing decades of entrenched practices. This period also saw the introduction of computer numerically-controlled machines (CNC), which called for retraining of the workforces in terms of skills as well as attitude. The focus was on productivity and quality, in addition to motivating employees to learn new skills and move from the shop floor to the engineering/supervisory side.

The late 1990s and early 2000 saw economic reforms and the entry of private players in various sectors, including BFSI. I decided to opt for this differentiated opportunity. This was a sea change at many levels; the white collar/knowledge staff was far younger; the work ecosystem was geographically spread across India; the processes and systems were computerised and the entire industry was subject to regulatory frameworks.

One key challenge was to build a cohesive organisation by communicating and cascading the organisational values, culture, vision and mission from the top down to all levels, locations and offices. Another challenge was to build a sustainable talent pipeline considering that for many decades there were only a few PSU insurance companies operating in this sector. This involved intensive training in areas such as insurance practices, processes, regulations, underwriting and customer service, besides leadership development.

It’s extremely critical to build trust in people and also be able to command that trust. This requires integrity, collaboration and synergy from the HR to deal with employees, whether it is an industrial or an office setup.

You have been associated with YES BANK almost since its inception. What were the major challenges with talent acquisition then, and how has the space evolved over the years?

When I joined YES BANK in 2007, it was still a relatively new entity, having started in 2004. Unlike the insurance sector, talent was not scarce in the banking sector since there was an available talent pipeline both from PSU and private banks. 

The core banking systems have seen the deployment of advanced technology over the last few years. The significant aspect of digitisation here is the use of new age technology, such as AI, big data/analytics to mine the data for customer insights and product development and service. Robotic process automation has reduced the repetitive / manual effort drastically and brought down the turn-around-time and reduced errors.

However, the challenge was to hire the right talent with the mindset for a new-age bank; enthusiastic and energetic and eager to learn and align to our business model.

The talent landscape has changed over the last decade as a number of institutes and colleges have introduced ‘banking’ as a subject of specialisation.

Newer talent-sourcing models are now available in terms of graduates and postgraduates. There are also candidates under the ‘hire and train model’, where youngsters are encouraged to enrol into technical programmes for two–three months and subsequently recruited into operations or front-end roles.

YES BANK has a top talent- acquisition programme called YES Professional Entrepreneurship Programme (Y-PEP). More than 900 young professionals from top B-Schools are selected and groomed to take on challenging roles in corporate banking, risk management, digital banking and other areas.

Within four years of its establishment, YES BANK was caught up in the middle of recession in 2008. What are the difficulties you faced and how did you sail through the crisis?
We didn’t downsize during the recession. In fact, we moved people from one business to another. For instance, the lending business was a bit risky, so we trained those employees on different businesses and shifted them to liability sales, or opening savings accounts, current accounts, and so on. Even in that situation of adversity, we seized the opportunity to retrain and reskill people for different kinds of tasks to enable them to continue to be productive.

There has been a spate of mergers and acquisitions across sectors. What is the biggest challenge for an HR leader in minimising the impact of such a process?
Such situations may not be totally unforeseen, and they can be planned in advance. Employees can be given a chance to apply in the merged entity. Redeployment of people should be ensured but in case of inevitable situations, the company should give monetary assistance to help employees rehabilitate themselves.

There are outplacement services to help them get alternative employment rather than leave them out in the open. One of the biggest challenges is to integrate the culture of both the entities. The change-management process is an exercise where leadership communication plays a critical role and constant dialogues are required to make sure leaders convey the same message to the new employees.

Now, the banking sector is at the threshold of yet another phase of bigger changes, due to digitisation and automation. Which banking jobs are going to be impacted the most?
Today, the entire business cycle from customer acquisition and cross selling, to transaction processing is getting progressively digitised. Digitisation has impacted all jobs and customer touch points. The question being asked now is “Which jobs will be replaced by automation?” Will people in banking be replaced by robots, chat-bots and other digital interfaces?

The banking process can be divided into the customer-facing front end, the operations /transaction processes which support customer service and the support and control units (e.g. risk, compliance, HR, finance, and so on).

The late 1990s and early 2000 saw economic reforms and the entry of private players in various sectors, including BFSI. I decided to opt for this differentiated opportunity. This was a sea change at many levels; the white collar/knowledge staff was far younger; the work ecosystem was geographically spread across India; the processes and systems were computerised and the entire industry was subject to regulatory frameworks.

Digitisation at the front end enables the use of technology for efficient and smooth customer acquisition. While there is a segment of customers who prefer to interact online, there is significant people connect required from a regulatory (KYC) and relationship aspect. There are different types of customers; some still like to visit banks for face-to-face interaction, while others are comfortable with online transaction. Banks also have to understand customers and the types of products that can be sold with and without human intervention. For example, wealth management services offer robot advisory for better analysis of portfolios and suggest funds with the help of artificial intelligence (AI), best suited to the customer profile.

The core banking systems have seen the deployment of advanced technology over the last few years. The significant aspect of digitisation here is the use of new age technology, such as AI, big data/analytics to mine the data for customer insights and product development and service. Robotic process automation has reduced the repetitive / manual effort drastically and brought down the turn-around-time and reduced errors.

For instance, the support and control functions in a bank, such as risk management, human resource, finance and compliance are also seeing the benefits of digitisation. Though machines are moving into the area of decision making, there are areas where professional human judgement cannot be substituted.

One can view digitisation and the people interface from another aspect. The first interface group includes the ‘users’ of digital technology, either on the customer acquisition, operations or support side. The second group comprises the ‘managers/evangelists’ of technology—those with broader knowledge and capability to strategise and envision what are the opportunities for digital interventions/ innovations and lead implementation.

The third group consists of ‘makers’ of technology, who are experts in the domain of artificial intelligence, big data, blockchain, analytics and more. While the makers are essentially the technology companies, some of them can be part of the bank’s technology team. For instance, app developers may be the third party and the managers have to understand the apps available in the market to be used in the banking segment. Once they are introduced, they are passed on to the users of the technology.

How has automation impacted HR function today?
In a fast-changing tech disrupted world, every function has to adapt to newer methodologies proactively or run the risk of being left behind. We use digital tools, apps and AI-based methodologies for various parts of our employee-engagement cycle including filtering and sourcing the best profiles, enhancing onboarding experience, sharpening our performance management systems and related rewards management processes, and making the separation process a seamless and positive experience.

The success of the banking system is dependent on the maintenance of public confidence and a culture of ethics. How do you think the banking sector can promote a culture of ethics and values within their organisations?
This is on top of our minds, and the way forward is to drive the message to employees in a strong fashion, on a regular basis. When we say our vision is to build the finest quality bank, we mean building the quality of ethics and governance. One of the best ways to build ethics and governance is to drive the message consistently and repeatedly.

Even in that situation of adversity, we seized the opportunity to retrain and reskill people for different kinds of tasks to enable them to continue to be productive.

The company has to reiterate the message through all points and forums of communication—formal mails, town halls, specific training sessions and most importantly, the message has to go through clear actions. For instance, employees found to have indulged in unethical services should be appropriately penalised and dealt with by the company. This will send out a clear message regarding intolerance of unethical behaviour. Similarly, candidates should also be rewarded and recognised for doing good. The company should not just weave the culture, but also reinforce and communicate the same. We have a Yes Connect initiative—an informal gathering of employees, where sessions on themes such as ethics and codes are conducted.

IT has already seen unionisation of white-collar workers. Do you think unionisation has now taken a new shape in the form of white-collar workers and is spreading to other industries?
The law of the land provides that employees can form unions, but the nature and character of unions are changing. Employers have also become more aware and keen to provide better facilities. Unionisation typically happens when employees feel threatened or are deprived of their dues. Modern employers are already taking care of these issues and their employees.

 

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