BANKING ON THE CLOUD FOR A SIMPLE, FRICTIONLESS HR SYSTEM

Many management teams at banks have been wondering how to increase their productivity, as low interest rates and new competitors have rendered them less profitable in recent years. In a service business, the answer is bound to be about the cost and quality of service the institution delivers.

While technology has brought new forms of competition from organisations that operate in niche services banks once dominated, such as peer-topeer lending, foreign-exchange trading, investment advice, deposit-taking and money transfers, technology also offers solutions to help banks solve the profitability problem. One way that full-service financial institutions can increase productivity is through more effective workforce management. Studies have shown that more engaged employees deliver better customer service.

Many smaller financial institutions rely on legacy systems and even spreadsheet-based data to manage their workforce. Larger global institutions may have homegrown systems built to satisfy a specific need — such as performance evaluation — which are incompatible with other Human Resources systems and rely on manual transfer of data to personnel or other records for tracking and analysis. Too often, payroll is not integrated across both HR and internal financial reporting systems.

In this older model, a company would deploy systems in-house and then undergo expensive and timeconsuming upgrades every few years. The results are a less than optimally managed workforce. Human resources needs to spend time moving data from one system to another, interfacing data records which often do not flow well across systems and, of course, there may be lost opportunities in terms of retaining, developing and advancing talent — the strategic things where HR should be spending the most time.

The fact that jobs in the finance industry are the second most challenging jobs to recruit for in Thailand, according to Mercer’s 2016 Total Remuneration Survey, creates an even more difficult situation for banks if HR managers do not spend the time wisely.

There is an option. The software-asa-service (SaaS) model allows financial institutions to subscribe to cloud-based applications that are kept up-to-date by the vendor, hosted on the vendors’ servers and paid for based on usage. It has been reported subscribers can achieve cost savings up to 50% and time to market measured in months versus years with the in-house, on-premises server model. Also, because true cloud vendors update the software over time, they will gain increased functionality.

Considerations for financial institutions contemplating a migration to the cloud include ensuring all the requisite business and regulatory requirements, such as privacy, security, business continuity, and integration considerations will be met. Advantages include the fact that the technology partner provides application updates and integration, leaving what is likely a smaller in-house team to focus on the strategic direction, management, and some vital technical functions in-house.

Global banks and financial services firms such as ING Bank, Saxo Bank, IMC Bank and the investment management firm Morgan Stanley, and Asia Pacific operators including ME Bank and Latitude Financial (formerly GE Money) have turned to cloud applications for HR management.

While some HR and IT managers will be concerned about security of data in the cloud, many analysts believe it is more secure than on a company server. However, companies contemplating the move to the cloud should also do their homework: ask about the service provider’s policies and procedures around data security. Ask where and how secure their data sites and backup sites are. Ask if they have ISO 27001 certification, the highest international standard for data security.

There are many advantages for employees and people managers when moving to cloud-based HR applications. Put simply, employees experience systems that are easy, simple, and frictionless with the functionality they need in one place. HR and people managers can focus less on the system and more on using the data in the system to gain insights on their workforce and to spend their time on the most strategic areas.

Workday, for example, offers multiple functionality through one system — with integrated modules for compensation, benefits, talent management, recruiting, payroll, time and absence, and learning and development — all on one platform.

In some cases, banks are also subscribing to cloud based financial management applications which offer a full range of financial capabilities, real-time business insight, and fully auditable process management, and also integrate with the HR applications for major efficiency and synergies. Typical financial management modules include: accounting and finance, management reporting, expenses, procurement, inventory, management, and project management and project billing.

Technology and cloud applications offer opportunities to improve workforce productivity and save costs, giving financial institutions in Thailand an edge in an increasingly competitive environment.