Ajaya Shah: To attract millenials, banks need to think and act differently
Apr 28, 2019-
For many young graduates, banking is considered a stable and lucrative career, with many opportunities for advancement and fulfilling financial compensation. But banking comes with its own sets of challenges, and new entrants should know what they are getting into. To help young people get into banking, Krishana Prasain spoke to Ajaya B Shah, CEO of Laxmi Bank, on what banks look for in potential employees and what applicants can do to get themselves into the banking sector. Shah brings his decades of experience in banking to this conversation, starting in 1994 with Nepal Grindlays Bank — which later became Standard Chartered Bank — and moving to Laxmi Bank in 2004, eventually becoming CEO in November 2018. Shah’s leadership has seen the bank focus on ‘phygital’ expansion, digital transformation and customer service. Excerpts:
Many young people dream of a career in banking. In your opinion, what is it about banking that attracts people?
The banking sector has traditionally been an attractive employment sector due to its inherent strengths like transparency, lifetime career prospects, the opportunity to learn new things, and remuneration. However, I feel that the banking industry is risking this preferred choice status, especially among millennials or Gen-Y. If we are to attract and retain young talent then we must think and act differently from what we have been doing in the past--such as better work that balances life, linking the career with the community for different causes, and of course, a more digital work environment.
Despite this interest, there is apparently a shortage of human resource in banking. Where is the shortage--in lower-level positions or in upper management? Why do you think this is so?
It is true that we are experiencing a shortage of qualified human resources across the industry. There could be several reasons for these. First, as I mentioned earlier banking is not the biggest, or only, employer of choice for millennials--they are more open to working in other sectors, which align more closely with their personal interests. Second, there has been a massive expansion drive in the financial sector over these last few years, which has resulted in an acute shortage of qualified human resources, especially in the mid-management level. The pool of available resources is being stretched very thin, which is creating a risk within the banking job ecosystem as people without adequate experience are moving into jobs that have more responsibility and accountability. And last, we are also experiencing people migrating out of Nepal, which is creating a vacuum--it is a big loss for an institution and the industry when someone who has been trained to take up higher roles suddenly leaves the country for good. This is a big financial loss for society as significant money is invested in that person's education and professional training, which is being put to productive use by some other country.
Similarly, there are very few women employees in the top management levels of the banking sector. It is very unfortunate to see qualified and capable female colleagues either drop out or let their personal priorities take over their professional aspirations. I am sure this is not only true in one particular industry or country, but I believe our system and society is failing these women and our lack of empathy and inaction is helping exacerbate this vacuum or shortage. Employers need to quickly get their acts together and redesign traditional workplace standards to accommodate their needs so that we get to utilise and benefit from the skills and talents of women.
Do you think our management colleges are not being able to produce adequate human resource?
We are happy with the output of fresh graduates from Nepali educational institutions. And the good thing is that they are more competitive, in comparison with employees with foreign academic qualifications. There is always room for improvement and one cannot get everything from a classroom-based education, and I guess that is why books like What they don't teach you at Harvard Business School become bestsellers.
How does one go about entering the banking sector as a young college graduate?
Speaking for Laxmi Bank, the minimum criteria that we require is as an undergrad or Bachelor’s level education. We also have a management trainee programme for those who hold Master's degrees, like an MBA. But it is important to know that an academic degree can open the door for you but academic qualifications alone are not enough to become successful professionals.
In your opinion, what skills can help someone build a successful career in banking?
Banking is not rocket science. A strong academic inclination will probably help you start quicker, but I believe, over the longer run, soft skills such as the ability to manage relationships within and outside the organisation, a positive and open mind, and common sense are equally important skills in this sector. After all, banking is a customer-oriented business where you are required to work with and impress external and internal clients.
Are there any misconceptions about banking? Would you like to set any rumours at rest?
In the age of open communication and easy access to Google, there are hardly any secrets about anything, so the people who interview with us are aware of what lies ahead and we manage their expectations accordingly. However, if there are any misconceptions today, it is that people think the best place to work in a bank is in the 'credit relationship' area as loan officers. This is not true. As banks are expanding their product lines and services, there is equal opportunity for growth in other functional areas, such as digital channels, risk management, treasury, human resources, marketing, including others.
What is the human resource condition like at Laxmi Bank? Are you looking for qualified candidates?
Currently, 1,100 employees are working in the bank with a 35:65 female to male ratio. As we are following a 'phygital' strategy--that is, increasing our presence in both physical and digital space--we are recruiting aggressively at the entry level across the country. Laxmi Bank offers great career opportunities for people with the right attitude.
We look for people with hard and soft skills and who we believe can fit into our unique culture. We believe we must invest heavily in 'people development' to meet our broader strategic and financial goals and have put in place 'learning and development' structures and systems that help identify training needs and delivery of quality training programmes. We believe the best employees are engaged and empowered employees, and so we invest equally in organisation development and culture.
What qualities do you look for in potential employees?
The traditional system of recruitment is flawed, as the selection of employee is based on a 15-minute interview and written tests, which are not sufficient to know potential candidates. At Laxmi Bank, apart from formal academic criteria and basic characteristics such as integrity and commitment, we look for people who display common sense, the ability to manage relationships, and communication skills. It is our experience that people with these skills generally do well in our organisation in leadership roles.
As the CEO of a successful bank, what advice do you have for young people who want to get into banking?
Apart from what I've already said, I have some advice for someone thinking of a banking career or just starting out. First, keep a long term view. Do not jump from one bank to other in a short period for short term gains. Have patience. Work hard where you are. Leave only if you don't like the working environment or if you believe you are not growing personally or professionally. Invariably, your lack of commitment and loyalty will work against you when you move up the corporate ladder. Second, it is more important to work with a line manager or supervisor who can help your career aspirations. When you are starting out, it is better to work with a good boss than to work with a bad one in a more glamorous department. Choose a mentor who you respect and who respects you, and work with that person to guide you and help shape your personal and professional growth.
Published: 29-04-2019 07:00
- nepal banking