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The introductory report in this series explains why central banks should focus on five areas to become the digital regulators of tomorrow. The first article looked at pillar one – harnessing the power of data – while the second examined how central banks can enable and leverage innovation internally and externally to support and promote a vibrant digital economy. The third assessed how central banks can drive internal and external efficiencies. The fourth looked at how central banks can improve how they communicate internally and engage with industry by using more holistic digital services and two-way communications. This article examines the foundation for these pillars: a workforce that has the skills needed to deliver next-generation capabilities. 

Our previous articles outlined the four pillars that digital central banks need to build or strengthen. Pillars, of course, require a strong foundation, and that foundation is the workforce – in this case both the central bank’s internal workforce and that of the broader financial services (FS) sector.

In this article, we will explain the steps central banks should take to help transition their and the sector’s workforce for a future in which disruption and uncertainty are the New Normal, while also strengthening their internal delivery capabilities by, for example, leveraging automation and using lean processes. In other words, how they can build a workforce that is future-ready in terms of skills and culture.

A. Ensuring the Internal Workforce is Future-Ready  

The foundation for any organisation’s success is a well-trained, capable staff who can perform their individual roles. For central banks starting to develop their digital capacity, lacking this foundation practically guarantees they will struggle to build the four pillars in the first place.

As central banks pursue a digital path, the roles of their staff will shift in the following ways:

• From facilitating innovation to leading change in the broader FS sector: Our second article showed how central banks need to enable and drive innovation internally, and across the wider sector. Regulators like the Monetary Authority of Singapore (MAS), for instance, have excelled at promoting innovation with initiatives like Project Ubin.[1] The next step for such pioneers is to further their role as drivers of change by challenging the status quo, providing an opportunity to keep pace with the speed of change in the industry locally and globally.
• From a prescriptive regulatory function to one that is calibrated and proactive: Next-generation regulators and central banks will evolve from being reactive (by the existing means of conducting arduous regulatory audits on financial institutions (FIs)) to being proactive, with adherence to regulations and supervision conducted through the use of data and advanced analytics (as we noted in our first article). In short, they will encourage collaborative investigation and discovery, particularly in uncharted areas – as they have done, for example, working with FIs to manage pandemic-related risks across different areas in 2020.
• From ecosystem partner to ecosystem orchestrator: Central banks and regulators are at the heart of the FS ecosystem as well as the country’s economy. Enabling digital solutions and boosting skills can cement this leadership role as regulators move from being ecosystem partners to ecosystem orchestrators. Our third article, for example, highlighted Esal, the e-invoicing platform that the Saudi Arabian Monetary Authority (SAMA) rolled out in 2018,[2] and which has changed the business landscape in the country.
• From regulator to digitisation enabler: Central banks are transitioning from being pure-play regulators to enabling digitisation, with collaboration and innovation at the heart of that change. COVID-19 has reinforced the need for regulators to be proactive in helping the FS industry meet the challenges of this pandemic. Their role as digitisation enablers will become more pronounced in the future.

To anticipate changes of this magnitude, central banks need to ensure that their employees have the skills and knowledge to carry out these responsibilities. This requires developing those capabilities in every way: by revisiting training procedures; by implementing changes to the workplace and processes; and by ensuring staff can collaborate efficiently, for example. The diagram below shows some of the key changes required to the regulator’s workforce to drive digital changes.

In addition, central bank staff will become promoters of the importance of culture in the FS sector – both from an ethical perspective (ensuring that employees do what is right for the sector and the economy) and with a view to making FS an area in which people prefer to work. This approach will also keep central bank staff motivated, help them reach their goals, and build a culture of trust and teamwork. The Central Bank of India (CBI), for example, has laid out its approach to fostering such a culture in its CENTRALITE programme.[3]

Action stations

It’s helpful for regulators to consider three broad areas of action.

The first is automation and digitisation. Technology has simplified many of the tasks that take up employees’ time, while solutions like analytics and robotic process automation (RPA) are eliminating repetitive tasks. Building a future-ready workforce means central banks must upskill staff to do the remaining tasks better and to take on the new roles outlined above.

The second is the evolution of the central bank’s operating model and capabilities. Changes in the FS industry, the scope of the services that central banks provide, and business activities mean these functions are evolving fast. For example, while the supervisory role won’t be automated or eliminated, the approach taken will change as audits become more of a customer-centric consultation, and policy development becomes more collaborative. This means helping staff to learn digital soft skills like co-creation and collaboration, while also training them to embrace analytics rather than crunching spreadsheets themselves.

The third is continuous learning and collaboration, which goes to the heart of creating a next-generation central bank. Because staff interact with technologically savvy external parties, they must be at the forefront of change. This space is evolving fast, so employees need to be constantly learning. That includes understanding the impact of the DARQ technologies (i.e. distributed ledger tech, AI, extended reality and quantum computing).[4]

B. Helping the FS Industry with Its Workforce

Banking and insurance are being reshaped by a range of trends: new entrants are changing the playing field; consumers increasingly want more personalised experiences; FIs have higher service expectations from regulators; digitisation and the DARQ technologies are among the advances affecting every facet of the industry; and the connectedness of the global economy means international regulation is evolving rapidly.

That said, although automation and AI will drive industry growth, these innovations won’t reach their full potential unless the sector addresses a skills shortage among staff. Given the shorter skill cycles that technological advances are bringing, upskilling the existing workforce is a more cost-efficient solution than hiring new employees.

There are several reasons why it’s important that central banks are involved in ensuring the FS sector is well-placed to manage its workforce. Most obviously, the central bank should know the strengths and weaknesses of skills within the industry that it oversees. Beyond that, this knowledge will help it to ensure that as few talents as possible are lost when the next crisis comes and skilled staff are laid off – after all, losing those skills permanently could harm the sector and the broader economy.

In addition, it’s important that central banks consult regularly with FS sector stakeholders to identify and map areas of skills shortages, and then to take action to remedy those – for example, by developing continuous, forward-looking programmes designed to: attract people from other countries or from areas like the SME world; train local talent in specific roles; and devise university courses targeted at aspects of need.

Some employers and central banks are already acting. Singapore’s regulator is working with the industry there to assess the impact of digitalisation and help it make the changes needed.
In 2019, for example, MAS and the Institute of Banking and Finance Singapore released a study showing how 121 roles in the FS sector – that’s most of the jobs in banking, asset management, insurance and enterprise[5] – will be augmented or changed by data analytics and automation by 2024.[6]

That marks the first step in understanding the sector’s workforce transformation journey (see diagram).

In addition to the benefits outlined above, implementing such a programme will allow the central bank to measure the skills market and the related assets FS institutions have, while helping the industry to stay ahead of trends.

C. Steering the Digital Ship

While regulators launch occasional reviews assessing what digitalisation means for the FS industry, MAS’s approach is unusual in that it has assessed what this means from a service perspective and for staff working at FS institutions. That’s an important addition that other regulators can apply. Some have been more proactive than others in doing so: Saudi Arabia’s The Financial Academy, for example, is helping the country’s FS personnel improve their skills.[7]

But boosting skills, while key, is not the sole aspect. As noted earlier, it’s also important to ensure the right culture is instilled – within the central bank itself, so that it is a place where people want to work, and where they work well together, but also within the industry more broadly.

The Bank of England’s (BoE) “One Bank” approach is notable for its focus on inclusivity, diversity and empowerment, all of which are designed to ensure the BoE can carry out its remit to the best of its ability.[8] As the BoE notes, its approach “means a strong common culture, built from the best of all parts of the Bank, which brings together the whole of the organisation to better support each policymaker and every policy decision”.[9]

As regulators look to become more inclusive, more collaborative and less focused on audit activities, they will increasingly need to ensure that their staff and employees in the FS sector have the skills and culture in place as they and the FS industry adjust to the digital age. Initiatives like those of MAS, CBI, Saudi Arabia’s The Financial Academy and the BoE offer useful lessons for regulators elsewhere.

At the beginning of this series, we said that those central banks that can build their capabilities across the four pillars and the foundation that we’ve outlined will be the digital regulators of tomorrow: empowered by data, using new technology to enable market efficiencies, able to regulate disrupters and those who are disrupted, and boasting an agile and lean operating model. With the FS sector changing rapidly, regulators have little time to lose.

Our next article will look at how central banks can focus on market positioning, and will show how different central banks have succeeded in carrying out this process.

Disclaimer: This document is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals.

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¹Project Ubin: Central Bank Digital Money using Distributed Ledger Technology, MAS. See: https://www.mas.gov.sg/schemes-and-initiatives/Project-Ubin
²SAMA Rolls Out “Esal” Digital Invoicing System to Support Saudi Government Entities and Businesses, SAMA (May 14, 2018). See: http://www.sama.gov.sa/en-US/News/Pages/news14052018.aspx
³Careers, Central Bank of India. See: https://www.centralbankofindia.co.in/English/career3.aspx
⁴Technology Vision 2020: We, the Post-Digital People, Accenture (2020). See: https://www.accenture.com/us-en/insights/technology/technology-trends-2020
⁵Future of Finance Jobs Study, IBF Singapore. See: https://www.ibf.org.sg/programmes/Pages/Future%20of%20Finance%20Jobs%20Study.aspx
⁶IBF-MAS study identifies skills for more competitive financial sector workforce, MAS and IBF (April 23, 2019). See: https://www.mas.gov.sg/news/media-releases/2019/ibf-mas-study-identifies-skills-for-more-competitive-financial-sector-workforce
⁷See: https://portal.fa.org.sa/sites/En/AboutUs/Pages/default.aspx
⁸Working at the Bank: An introduction, Bank of England. See: https://www.bankofengland.co.uk/-/media/boe/files/careers/workingatthebank.pdf
⁹Ibid.