Here’s an opportunity for India as Western financial services firms look eastward for talent

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As technology gains centre stage, outsourcing continues to prevail as a viable cost-saving and strategic option for financial services businesses. Led by banking, asset management, and more recently, private equity and private credit, firms have pushed the pedal on their outsourcing programmes, which promise to grow in complexity and intensity.

In an increasingly data-driven world, it’s not surprising that extending existing teams through resource augmentation has gained major traction. This approach found popularity during the pandemic as businesses began to appreciate the value of teams working remotely, and potentially, from anywhere in the world. Companies offering strategic resource augmentation services thrived during the pandemic, serving as a pillar for the financial services market for this very reason. 

Strategic resource augmentation is the way forward 

The tremendous growth of knowledge process outsourcing (KPO) can be attributed in part to the talent gaps along with hiring difficulties. Particularly, at the onset of the pandemic, HR functions that were slow to respond missed capitalising on remote hiring opportunities. 

More importantly, several Western economies, including places in North America and Western Europe, are dealing with an ageing population, low birth rates, and a declining working-age population. These are worrying signs of more challenges that could be expected in future decades.

In contrast, India, with its demographic dividend and immense talent bank, has a terrific opportunity to cement its position both as a preferred talent hub and a global economic powerhouse.

India could be a preferred destination for talent

Graduates in many Western countries no longer view financial services as a lucrative job or career for life. The prospect of being an investing banker or asset manager has been dimmed by the excitement of a career with a start-up or the likes of Google. 

While India could be experiencing a similar trend, its massive education system focused on academic success and expanding its graduate pool ensures that the shift in preferences is not as dramatic. Across the country, more than 10 million students completed an undergraduate/graduate/post-grad/doctorate/ diploma programme in 2021-22. Investment banking and financial practices are still considered solid career paths.

Challenges of retention favouring India’s prospects

In recent years, the nature of work in the KPO industry has changed drastically with explosive growth in the private equity and credit markets. Employers recognise that all staff members of the workforce, irrespective of their geographic location, must work similar hours and not be expected to stretch beyond their stipulated time. A follow-the-sun model with global operations and a distributed workforce across time zones while strategically opting to augment resources, will help offer seamless services with workflow delivery at different times throughout the day. 

Making financial services an alluring place to be 

To survive and thrive in this new reality, organisations must continue their people focus by offering adequate opportunities to acquire new skills across different aspects of financial services. Also, an active and wide-ranging tech enablement programme will be crucial to drive efficiencies for both financial analysts and clients. It’s also an opportunity to look at different kinds of digital dashboards, alerts and other managed solutions that can be developed as a market offering. 

Artificial intelligence (AI) and Large Language Models (LLMs) are advancing rapidly. These technologies give another opportunity for the data analysts and consultants to tune into client needs better and offer deeper customisation. Providing better prompt engineering to LLM models will help them improve their responses and in turn, the client’s data science and data insights programmes. It will also help them develop solutions that make better use of AI to extract insights from unstructured data.

Sustaining India’s talent advantage

Although financial markets are extremely dynamic, certain functions within financial services have not changed much in the last twenty years. With the ongoing technological transformation, evolution and revolution are happening simultaneously. 

The analytical insights enabled by technology and the power of AI will offer a mix of new opportunities as well as challenges by creating more noise, more potential for bias in the results, as well as more checks and balances and compliance measures. Over the next five years or so, staff must become more tech-savvy. Hiring strategies over the next five years will also have to be recalibrated. Recruiters must evaluate the benefits of a new generation of employees attuned to using the latest technologies. 

For India, the path ahead is about sustaining its advantages. Given the volatility of the markets globally, India must continue to build on its wealth of talent. Without undermining the talent in other outsourcing destinations or Western economies, India must amplify its efforts to enhance and grow its education system. 

At the same time, it must work to retain its strengths — the stability of its democracy and reputation as a safe, well-educated nation with a relatively younger talent market and healthy birth rate to deliver its potential as an economic powerhouse.

—The author, Damian Burleigh, is Chief Revenue Officer at Acuity Knowledge Partners, a leading provider of high-value research, analytics and business intelligence to the financial services sector. The views expressed are personal.

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