Bank executives need to be up-to-date in knowledge, skills and capacity to address the growing challenges of the banking industry. As the banking industry has been experiencing continuous change, training and capacity development programmes also demand continuous alteration and tuning. It is about all broad groups of bank stakeholders covering employees (including top management), boards, regulators and customers that should come under suitably designed targeted capacity development programmes. Alongside the contents, the methods and approaches of the bank training programmes are required to be adjusted from time to time.
Bank executives need both on-the-job and off-the job training. There are opinions that on-the-job training should get greater priority today as bankers may not have enough scope or time to attend off-the-job training. In some instances, there are tendencies when conducting training in an external environment is being avoided by some banks. But in reality, a good number of these training programmes can be organised relatively easily and in a cost effective manner, and can be seen that the employee is learning while he/she is actually working. On-the-job training on certain desk level issues and relevant areas is always crucial. However, banks can not ignore or avoid the necessity of off-the-job training. Rather in my view, importance of off-the-job training has gone up. Off-the-job training offers even better open forum to deliver. In the growing complex banking environment today, off-the-job workshop or training with participation of bank executives from different banks can be very effective to better understand the industry perspectives and challenges. Efficiently devised off-the job training programmes may add great value to the trainees' overall knowledge base.
Online training and eLearning solutions for bank executives are remarkable developments and effective in several instances. The main benefit of the development is that eLearning and online training enable banks to easily adapt the content and transfer to the learner, which could be done at any time and from anywhere. It is a very good tool that can complement capacity development efforts of banks. However, it can never substitute face-to-face training. Face-to-face training and capacity development programmes offer unique opportunity to share knowledge and experiences not only with the trainers but also amongst trainees. These are adult learning forums and thus trainees find the opportunity to learn from each other. Fact-to-face training works is a forum for network and trust building which is crucial in the professional life.
Case-based approach is always crucial as a training methodology. Cases simplify complex concepts, and expose the participants to the real life situations. In the early decades of the twentieth century, the Harvard Business School (HBS) adopted the case method, and it continued to flourish in many other settings and institutions around the globe. To address similar problems, cases are very useful to the bankers. Cases help develop effective 'followership' which is very important in effective banking operation. However, cases may not work in many situations, especially in addressing the many upcoming challenges of banks that had never happened and are new to everybody. We are supposed to think out of the box i.e., it is the sound leadership that can address the challenge. It is crucial now to adopt right approach by the bank management and capacity development institutions to help develop leadership in employees. In banks, 'followership' is important, although leadership is even more important.
A training or workshop format should offer a true adult learning forum to facilitate mutual learning amongst participants. Arrangement for informal interaction and communication in the training/workshop format might help convert it into a 'continuous learning forum'. It means, the participants may develop good understanding and relationship amongst themselves and thus continue communication and professional interaction even after the programme is over. Extra-curricular activities as part of a training/workshop format could help greatly in this connection. Sports, cultural programmes and other types of informal gathering of the participants might help significantly in network and trust building amongst trainees.
To address the changing need of the training and capacity development programmes, we need to understand the current human resources challenges of the banking industry. Growing money laundering and several chaotic incidents and corporate scandals have brought newer challenges for human resource management in banks globally. The challenges are connected with the change of the overall regulatory and business environments and priorities. To cope with the changing business environment and newer vulnerabilities, regulatory authorities of the banking industries are consistently introducing new regulations, and compliance requirements. Thus compliance issues should get due attention in the training and capacity development programmes as bankers need to adjust continuously with the growing and changing compliance requirements of the central bank.
Over the years, banks were generally concentrating on driving economic wealth and maximising shareholders' return. In the past, risk issues, sustainability concerns, protection of customers were not at the top in the priority list of banks, in general. Regulatory compulsion or restrictions were also very limited. Today, a diverse regulatory framework compels banks to care about risk appetite, protection for customers and managing capital in a different manner. It means, the business strategies of banks have undergone major changes and strategies are required to be changed accordingly. The current preferences of banks and risk management strategies must receive due priority in the training and capacity development programmes.
Growing financial crime is one of greatest concerns of the banking industry today. Handling financial crime requires strategic initiatives on several technical issues. However, some motivational and leadership issues are critical in this connection. Bank employees need due motivation to perform. They must be treated with due care and certain targeted soft skill programmes could be specifically relevant to them. On the other side, the expectations for the senior leaderships in banks have also changed drastically. Leaders need to be able to develop and nurture a culture in which people can feel safe in taking measured risks. Soft skills related to motivation and leadership is the need of the time.
Regulatory compliance and corporate behaviours should get optimum focus in designing capacity development programmes for top management and boards. Irrational and unethical behaviours of some boards and top managements were questioned following the most recent financial and economic crisis. It was observed that in many instances huge expectations of profits by the boards and very high compensation packages of top management resulted in excessive risk taking activities and failure of banks. Today, banks' risk management practices heavily depend on the corporate behaviours of the board and top management. For effective banking operation, top leadership network must create congenial environment for developing and nurturing future leaders.
A training wing of a bank or a national level training centre should engage in facilitating and promoting knowledge management in the industry. Such knowledge management covers the range from the bank's own internal intellectual capital to the wealth of data on customer transactions. Knowledge base thus nurtured includes explicit knowledge and implicit knowledge. Explicit knowledge can be transferred easily through books and reports; however, implicit knowledge is not explicitly captured. For a bank, implicit knowledge is very important which is rarely recorded and transferred. The level of implicit knowledge depends upon several factors that include task knowledge, expertise knowledge and level of training. Knowledge management is thus becoming very important in almost all banks since it simplifies the delivery of timely and effective information. It helps managers in formulating strategic, tactical and operational activities in the best ways in order to achieve desired objectives. Knowledge management can lead to many organisational benefits like better solution to problems and decision-making, improved customer services, increasing profits, more innovation and greater creativity. As a knowledge management strategy, action research should get due emphasis in addressing the growing complex challenges of the banking industry.
Dr. Shah Md Ahsan Habib is Professor and Director (Training), Bangladesh Institute of Bank Management (BIBM).