Banking Article, Banking Finance 2022, Banking Finance February 2022

Employee Training in Banking Industry: An essential tool for Organizational growth

Human being is one of the best creations of Nature in the whole universe, who is being nurtured by the continuous learning, education and training. Without training and education, no difference will be there in human beings and rest of the creatures on the earth. As change is the law of nature, and world is changing with every passing moments, new scenarios, new developments like technologies, software etc by the time, and hence our needs and demands accordingly are being germinated every day for making life of human beings easier and comfortable.

In the present and competitive scenario, training of employees is one of the most important means for developing organizations especially for Banking Organizations by the way of learning and skill developments in their professional life. Although a person is well educated and qualified while enters as an employee of any organization, however there is a sharp difference in learning and knowledge developed in student life and that of professional or practical life. Training of the employees is crucial for the organizations to ensure their smooth understanding of work, skill development, and preparedness to perform efficiently. Almost all of the organizations including banks conducting Induction programs for new employees to inculcate the culture of the organization.  Training is not only essential for the new employees of an organization but also for the in-service or existing workforce. It is significantly crucial at the start of the new project so that all team members are well-prepared to deal with all the challenges and ensure the success of the project. It is essential to help the employees to achieve perfection in their work by the way of new researches and technology.

Organizations frequently face the need to training of their employees when they find some skills or qualities lacking in their team, or they need to make orientations of their work force towards new dimensions for developmental changes.  It may not be in the form of some specific skills but the overall attitude or work performance of the employee or teams, which make the management, seek training for them. Basic motive of Employee’s training includes Better Productivity, Positivity, Better Communication, Risk acceptance, Interpersonal growth and Skill development etc. The developing organizations focusing on training their personnel, want them to be well-prepared for any kind of situation through the executive-skills building. They ensure to boost their productivity and profit, which strengthens the organization, in addition to polishing the skills of their employees.

In the present competitive era the developing banking organizations provide various training programs as per the requirement of their employees and enhance their skills. It helps organizations and work force to grow and make progress. Some of the key benefits of training are given below:

Improves moral of employees and job satisfaction:

Sometimes employees lose their moral and confidence when they are unable to perform as per their expectation, or they have committed mistakes while performing their duties due to lack of awareness and knowledge, in that time training sharpens their hard and soft skills which improve their moral, performance and job satisfaction as well.

Improves knowledge of new policies and goals:

While working at Bank’s branches or administrative offices sometimes it is very difficult for bank employees to get updated about all new changes and information related to banking products, services, new policies, corporate goals, corporate vision, mission and its planning towards organizational growth. Continuous training programs will always help employees not only to get acquainted with their organization’s ethics, values, policies, visions and missions but the right path to move on.

Boosts performance of employees:

Training boosts the knowledge, enthusiasm and expertise of the employees, which has a significantly positive impact on their job performance.  In the workplace it helps employees feel like the organization is invested in them so they realize their importance in eyes of their organization. By continuing to teach or train employees, new skills and abilities, they will not just become better workers, but they will feel like more productive members of the organization. So the continuous training will improve their morale as well as their workplace capabilities. So it is a best way of enhancing the efficiency of the workforce.

Helps to analysis the competition in the market:

In present scenario there is a huge competition in the market amongst the peer banks, all are having more or less same types of products and services with a range of additional features as customers are well educated and more demanding, in other words we can say now the market is customer centric so every banking organization strongly prefer to design their products and nature of their services as per customer’s choice. In this type of situation it is not easy to attract a new set of customers and retain the existing consumers. In such circumstances training helps to analyze our strength and weakness as compare to our peer competitors in the market and gives the opportunity of self evaluation and improvement.

Encourages innovation and risk acceptance:

In the era of innovation and technological advancement, it challenges employees to accept the risk and get out of their comfort zones to embrace progress. Without expertise, employees become fearful of doing that. However, training provides them the necessary skills to accept innovation and calculative risk, which ensures their progress and development of organization as well.

Mitigates the risk:

In the Banking industries, many types of risks as per RBI are involved, some of those can be explaining as below:

  1. Credit Risk: Credit risk or default risk involves inability or unwillingness of a customer or counter party to meet commitments in relation to lending, trading, hedging, settlement and other financial 3 transactions. The Credit Risk is generally made up of transaction risk or default risk and portfolio risk.
  2. Market Risk: market risk arising from adverse changes in market variables, such as interest rate, foreign exchange rate, equity price and commodity price has become relatively more important. Even a small change in market variables causes substantial changes in income and economic value of banks.
  • Liquidity Risk: The liquidity risk of banks arises from funding of long-term assets by short-term liabilities, thereby making the liabilities subject to rollover or refinancing risk.
  1. Interest Rate Risk (IRR): Interest Rate Risk (IRR) refers to potential impact on NII or NIM or Market Value of Equity (MVE), caused by unexpected changes in market interest rates.
  2. Foreign Exchange (Forex) Risk: Forex risk is the risk that a bank may suffer losses as a result of adverse exchange rate movements during a period in which it has an open position, either spot or forward, or a combination of the two, in an individual foreign currency.
  3. Reputation Risk: The risk due to severe impact on bank’s reputation.
  • Compliance Risk: The risk due to failure of compliance
  • Operational Risk: The risk due to inadequate or failed internal process.
  1. Legal Risk: The risk because of any legal action on bank due to failure of complies with law.

Presently banks are focusing on conducting a lot of training programs related to risk management and preventive vigilance. Basic motive behind these types of program to spread awareness amongst its work force about preventives measures against the given risks. Continuous training also prevents the employees from learning by trial and error method.

Prepares employee for higher responsibilities:

In spite of having an experience of various years some of employees avoid to come out of the comfort zone and to get assigned for higher responsibilities and challenges, but Continuous training process develops confidence, motivation, Skills, knowledge, enthusiasm and courage amongst the employees so that they feel to grab bigger responsibilities that make strong foundation of their beloved organization.

Improves Customer Service:

Customer service is one of the biggest and challenging aspects of banking sectors in this competitive era. It may detoriate the growth in consumer base and business of banks, if they fail to serve the customers even one notch below as per their expectations. That’s why it is very important to make realize bank staff the importance of excellent customer. Training improves the soft skills of employees on the job and makes them work more professionally and productively. Customers will feel the impact of this elevated service, and it will improve their opinion about the organization in the market.

Improves Task Management:

Training and development programs help employees to manage allotted tasks individually or in teams, relying on a greater understanding of processes and clearly defined goals. Because employees are well-versed in the skills required for their assigned job, they will require less time to find ways to perform their required tasks.

Improves the brand image of organization:

When an organization pays attention to developing the skills of its workforce, its expertise and job satisfaction will spread the word, and more competent people will join the organization where they can learn and utilize their abilities for the benefit of their beloved organization. Also it will create a shine full brand image of organization in the market.

Better Workplace environment:

Consistent training will help employees work more effectively in the workplace environment as it also develops cultural integration amongst the staff. Especially at the time of merger or amalgamation of two or more entities it is not easy to create a comfortable environment for those employees who came from non anchor banks or entities because of their different culture, work style, products, services and goals etc. Training brings about an atmosphere in the organization that encourages every employee to feel valued and welcomed. It also encourages employees to grab some bigger opportunities by escalation of their job and roles.

Prepares future Leaders for the Organization:

As per the theme of EASE agenda banks have started the succession planning of top leaders who are on the verge of retirement. Training system with the help of HR team is able to identify the sparks amongst the eligible staff and prepare them to take over the responsibilities of top leaders.

In India the banking industry becoming more competitive than ever, private and public sector banks are competing with each other to perform well. The top management of the banks is now in the position to modify or upgrade their traditional human resources practice in to innovative human resources practices in order to meet the challenges from other competitive banks. Thorough need based training analysis and its implementation is a crucial part of ensuring employee performance and satisfaction level. It benefits both the employees as well as employers. Most of the organizations in the region specifically focus on the skill development and training of their workforce and enjoy their profit. Training system is also playing very crucial role during the pandemic of Covid-19, when the physical training of employees was quite impossible many of the banking organizations have initiated virtual training programs with full of success that was badly needed to those employees they are continuously performing even in the pandemic and critical situation, it shows the importance of training system amongst the developing organization.  Ultimately with the support of strong training system, every developing organization can compete with their peer competitors by enhancing the productivity of their employees. It also ensures its growth and sustenance for the longer and longer period. Training and development is a continuous process in which the employees of an organization are motivated to acquire and develop technical, managerial and behavioral knowledge skills and various abilities as per organizational need.

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