PwC Consulting: "Digital Transformation of HR Is Essential for Banks"

“Execution Strategy for Digital Transformation of HR in the Financial Sector” Report

As banks and other financial institutions evolve into organizations with technological competitiveness on par with IT companies, there is a growing recommendation to actively pursue the digital transformation (DX) of human resources (HR) management in order to secure tech talent and operate organizations with agility.

On September 12, PwC Consulting announced the publication of its report, “Execution Strategy for Digital Transformation (DX) of HR in the Financial Sector.” The report comprehensively analyzes trends and successful cases of DX in the HR sector within the financial industry, aiming to present a blueprint for the future direction of HR in finance.

The report identifies the need for DX in financial sector HR as a response to workforce restructuring driven by the expansion of digital financial services. According to the Financial Supervisory Service, over the past 13 years since 2011, the number of branches at 15 domestic commercial banks decreased by 33%, while annual IT development expenses increased by 255%. This indicates that hiring for tech development roles and reskilling or upskilling existing employees for IT positions is becoming increasingly active. The report states, “Securing talent in the digital competition is directly linked to organizational capabilities. Every organizational change requires its own response strategy, and it is essential to systematically establish reskilling (transitioning to new skills), upskilling (advancing existing careers), and talent acquisition systems to enable rapid adaptation to the required skill sets in line with these strategies.”

The report further emphasizes that, as the need for fast and accurate organizational and workforce operations grows to expand the digital ecosystem, a data-driven and agile HR platform is essential. For example, organizations such as “Digital Strategy Headquarters” or “AI Finance Centers” have been newly established to search for and assign employees with appropriate skills, or to form and dissolve task force (TF) teams for the development of new online financial products. The report highlights, “A data-driven HR management platform is indispensable for predicting workforce supply and demand in real time, making decisions through simulations, and searching for employees with specific skills to assign the right personnel to the right positions.”

Finally, as preventing financial incidents and managing risks become increasingly important, a monitoring system based on HR data that enables thorough internal controls and proactive prevention is needed. In particular, the accountability structure introduced to strengthen internal controls at financial companies must operate with a focus on prevention rather than post-incident sanctions, making it crucial to reinforce preventive measures linked to HR, according to the report.

Accordingly, the report presents the following execution strategies for building a data-driven HR platform: ▲ a skill-based DX strategy that can be linked with internal business operations, ▲ process optimization for data-driven HR, and ▲ trust-based DX execution that also considers risk management. The report stresses, “HR is closely tied to business direction, so it is necessary to clearly define the expected roles and scope of new HR solutions in line with the expansion of non-financial businesses, as well as to optimize systems, data, and processes. By enhancing the functions within the HR system, organizations can ensure transparency and consistency, strengthen brand trust, and secure competitiveness both internally and externally.”

Jo Hyesu, a partner at PwC Consulting, stated, “Competition to secure tech talent in the financial sector is fiercer than ever. It is now crucial to transition to an HR system that can effectively support business strategies.” She added, “Given the high level of regulation and complex organizational structures in the financial industry, there are more factors to consider than in other sectors. For successful DX in HR, strategic approaches that align with regulations and the environment, as well as stable execution, are essential.”