Equip banking employees for transformation

Banks of all sizes are experiencing a wave of transformation across different areas of the business.  

The rise of fintech and technology companies in financial services has prompted traditional banks to re-strategize how to compete. While the Fed's projected rate cuts may alleviate deposit pressure, banks face mounting regulatory challenges. The Consumer Financial Protection Bureau (CFPB) has significantly increased enforcement actions, issuing numerous Consent Orders targeting sales practices and customer authorization issues and intensifying oversight of anti-money laundering and fraud practices. This heightened scrutiny, combined with stricter Community Reinvestment Act requirements, has added layers of complexity to compliance. With Donald Trump winning the presidential election, banks might expect to see some regulations rolled back — but in the meantime, they still need to manage current compliance requirements and their associated operational and reputational risks.

These challenges not only impact institutional performance but workload and stress for employees across the banking industry. 

“With so much change, it’s hard to imagine another industry going through as much transformation as the banking industry right now,” said Graham Tasman, Grant Thornton Banking Industry Leader. “It’s sparking a need among banks to do more with less and use the power of automation and technology to their full advantage. This, of course, puts stress on the workforce, whether from lack of communication or fear of displacement.”

Indeed, 66% of banking industry survey respondents said they would contemplate leaving their organization if the right opportunity came along, with 36% citing concerns around job security as the primary motivator — 5 percentage points higher than the average of all reporting industries. This suggests that employees in this industry have greater awareness of the significance of transformation and its impact on their roles, which reinforces the need to engage with employees to discuss career progression and minimize premature or unwanted turnover.

Jennifer Morelli, Grant Thornton Principal Growth Advisory Services Principal, emphasized that despite the pressures of transformation, banking leaders need to prioritize their people to achieve successful growth. “Without an empowered and invested workforce, enabling successful transformation becomes even more challenging for organizations,” she said. “Employees want to feel that their workplace values them, especially during uncertain times. Banks should invest time in engaging with their workforce ahead of upcoming changes, ensuring they’re prepared to be successful with new ways of working. Regular check-ins with employees can also help organizations identify their strengths and areas of improvement to better align workforce initiatives with the organization’s growth strategy.”

The survey showed that there is a need for banks to reinforce their commitment to clear communication and continue to invest in their employees in traditional benefits and pay, in addition to well-being, technology, professional development and flexibility initiatives.

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Effective employee communication is crucial during periods of transformation.

"Frequency and transparency in communication is needed, particularly in our regulatory environment,” said Allison Hughes, Grant Thornton Advisory Services Senior Manager. “Leaders need to readily acknowledge when regulations impact the bank and share frequent and relevant updates on action plans with their teams."

Banking employees ranked poor communication as the most stressful aspect of their jobs, followed by people shortages, organizational changes and unrealistic expectations. Morelli said this highlights the delicate balance banks must strike between serving multiple stakeholders — including shareholders, board members and high-touch customers — while maintaining clear internal communication channels.

“Managing these relationships requires careful handling of sensitive information, but ultimately, effective employee communication is essential,” Morelli said. “All of these issues have the potential to snowball into widespread burnout and dissatisfaction. That's why it's important to look at the full picture when collecting feedback from employees.”

By implementing a consistent and thoughtful communication strategy, banks can foster transparency and strengthen employee engagement while maintaining appropriate information controls. When banking organizations effectively communicate their current state and future direction, they create a foundation to successfully navigate through periods of change with their employees informed and on board. 

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Compensation and benefits 

“This highlights that while compensation is crucial, it isn’t the sole factor in employee satisfaction,” said Tasman. “When employees are stressed about changes in the industry and at their organization, pay alone can’t mitigate these stressors.”

To effectively support their workforce, banking leaders should consider comprehensive programs that go beyond compensation and address financial, physical, mental and social health and well-being.

Technology changes

Earlier this year, financial services CFOs shared plans to invest more in technology. The banking industry is no exception — investing in digital transformation, automation, AI and machine learning and more — creating new workforce and skillset needs.

“With new uses of technology comes the need to attract and retain different skill sets,” Tasman said. “While traditional areas like loans and underwriting remain important, there is a growing emphasis on technology and data analytics. This shift is changing the profile of a typical ‘banking professional’ and making the industry more appealing to candidates.”

Survey results show that current banking employees feel positively about their organization’s technology investment, with more than three-fourths of respondents saying their organization’s tools maximize their work output and efficiency. However, there is also concern that automation and AI tools could displace current jobs, with 36% of banking employees worried their job could be reduced or replaced by AI in the next 12 months.

To combat unease, organizations should incorporate sound communications around what changes new technology will bring and increase training and development opportunities.

"The ways of working in banking are changing, and employees should be empowered with the skills they need for the future," Tasman added. "This can also help ease job security concerns related to increasing investments in automation and AI-driven technology."

Skill development opportunities

The banking industry offers well-defined career paths, with 60% of employees confirming their advancement opportunities are clear. Additionally, 68% said they have sufficient opportunities to develop valuable skills — a crucial factor for retention. To further progress in their careers, many respondents indicated an interest in internal mobility.

Though most banking respondents said they are satisfied with their current employers, 66% would consider new opportunities if they arose. "Banking employees are interested in growing and evolving with their current organization. If their institution can't provide those opportunities, they risk losing them," Hughes said. "Banks should focus on offering more training and professional development opportunities to help employees adapt to the changing industry landscape.”

Technology training provides clear benefits: employees enhance their career skills while banks improve operational efficiency. However, some employees may resist adapting to new technologies and ways of working. "This resistance can negatively affect team morale and productivity," Hughes noted. "Leaders should carefully evaluate employees who consistently demonstrate an unwillingness to develop necessary skills and take appropriate action when needed to maintain a productive, growth-oriented team."

Flexibility can support well-being

Banks can use their technology investments to improve organizational operations, as well as to foster more flexibility for employees. While tech and automation have the potential to enable organizations to support hybrid work models, more banks are moving away from them.

Our survey results indicate that nearly half of banking employees are fully remote, but 36% say their employer has restricted the use of remote working over the past year — a trend that is expected to increase as institutions prioritize security issues that come with the increase in regulatory requirements.

“It will be important for organizations to balance the need for more oversight with the desired flexibility of hybrid work where possible,” Belden said. “If the levels of stress and burnout continue, organizations will be at greater risk of losing key talent if they are not able to find mutual solutions. Those solutions can be as simple as flexible start and stop times, which days they prefer to work or a mix of longer and shorter hours on a given day of the week.”

1. Maintain a consistent feedback loop. Banking employees report receiving feedback monthly, which is more frequent than the annual or semi-annual reviews common in other industries. Frequent review cycles are expected to continue: according to our HR Leaders survey, 76% of HR leaders plan to revamp their performance management processes to be more frequent and development-focused, enhancing transparency and engagement. 
2. Manage poor performers. In the banking industry, 29% of respondents feel that poor performers are not adequately managed. While it can be challenging to address poor performance during talent shortages, leaders must recognize the impact on other employees and the overall organizational culture when poor performance is tolerated. 
3. Emphasize benefits. Banking employees continue to cite benefits as a top consideration for joining and staying at an organization. With high levels of burnout, organizations are reassessing their benefits packages to better support mental health and wellness. Ensuring competitive pay alongside robust benefits will be key to attracting and retaining top talent as their needs evolve. 

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