Financial Institutions and Banking

Going Digital: Banking’s Workforce of The Future

The discussion about digital transformation in financial services often focuses on which tools and solutions can best help an organization address challenges and opportunities. However, identifying the right tools is only one component. A successful digital transformation strategy should also address staffing considerations and plans for enablement and adoption.


Organizations need support and buy-in from staff who have strong digital literacy and the ability to build on necessary skills. As banks work to fill open positions and retain top talent in a highly competitive labor market, leaders should monitor shifting workforce trends and employee expectations to ensure the organization has the right people to execute its digital strategy.


A New Era of Banking

Digital transformation is a top priority for banks looking to meet customer needs, mitigate risk and improve efficiency, with 53% of respondents to BDO’s 2022 CFO Outlook Survey citing digital transformation as their top innovation strategy for this year. While expanded offerings and capabilities can create new opportunities for financial institutions, implementing a robust digital strategy can also expose banks to new threats. Rapid digitalization efforts have coincided with an increase in cyber risks, which can have dire financial and reputational consequences — especially in a heavily regulated industry like financial services. Any transformation plan should incorporate and/or develop thoughtful employee training programs in regard to the institution’s cybersecurity posture. Employees are the first line of defense when mitigating risk.


Beyond cyber risks, today’s era of banking has ushered in a new appreciation for digital transformation because CFOs and other financial leaders recognize a data-driven approach may help them spur growth, capture additional market share, and counter disruption from fintech competitors.


…And The Staffing Considerations That Come with It.

Financial institutions know that staffing plays a key role in effectively implementing digital transformation — and that not having the right people in the right roles can significantly hamper these efforts. Respondents to BDO’s 2021 Financial Services Digital Transformation Survey indicated a lack of skills or insufficient training (50%) and employee pushback (46%) as two of the top reasons why their digital initiatives underperform.


To help ensure success, a robust digital strategy should also address the “people” component before and during implementation. This initiative includes focusing on existing employees by developing a comprehensive change management strategy that’s supported by senior leadership and implementing applicable trainings, as well as identifying and filling any needs for new talent.


Meeting Shifting Employee Expectations

As in many other sectors, financial institutions are struggling to overcome a labor shortage caused in part by a wave of employee resignations and early retirements. In order to attract and retain top talent in a shifting labor market, financial institutions should have a clear understanding of what employees are looking for in a new role and where they are finding it.


While the financial technology (fintech) sector was already encroaching on investor capital and market share, banks must now also compete with fintech companies for skilled talent. Sustained growth has enabled fintechs to offer greater work/life balance, competitive compensation and greater flexibility than some traditional roles in banking. Part of the digital transformation process involves finding ways to remain competitive in the labor market.


Among the tactics CFOs are implementing this year to address these workforce challenges, 42% are developing flexible working arrangements, 40% are increasing compensation and 36% are upskilling their talent, according to BDO’s 2022 CFO Outlook Survey.


As CFOs assess flexible working arrangements, banks are evaluating their corporate footprint in multiple markets. As branch footprints are right-sized, banks are also deciding where offices can be consolidated.


Gaining A Competitive Edge Through:



In addition to meeting elevated customer expectations, digitalization can help attract and retain skilled employees. The innovation introduced by digitalization creates new opportunities for training and upskilling, which enables existing staff to develop their knowledge and experience. Automating previously manual processes can also free up time for employees to focus on higher-value services instead of more menial tasks. In fact, 37% of CFOs cited ‘implementing automation for manual tasks’ as a key consideration to meet shifting employee expectations and address workforce challenges. Above and beyond the employee experience, automation impacts the customer by providing a better experience for them, too.


Reevaluating benefits and compensation

Competitive salaries are important, but a competitive compensation strategy should also include nonmonetary benefits, such as wellness perks, that help meet employee needs. The digital strategy can also help financial institutions embrace a hybrid or remote work environment, providing employees with increased flexibility while also expanding the pool of potential applicants.


Aligning with ESG values

Employees are increasingly scrutinizing a potential employer’s commitment to environmental, social, and governance (ESG) values and prioritizing purpose-driven work. This is being recognized as a priority, with 38% of respondents to the 2022 CFO Outlook Survey listing “actionable steps on diversity, equity, and inclusion” as an area of investment for 2022. As financial institutions set ESG goals and distance themselves from clients who are not meeting environmentally sustainable criteria, publicizing these efforts can help attract new employees and retain existing staff.


Third-party advisor benefits

Partnering with a third-party advisor can provide a financial institution with a bird’s-eye view of opportunities and challenges related to staffing and digital strategy that may not have been identified in-house. The insights gleaned from a third-party analysis can help shape digital and workforce strategies, including areas for hiring, upskilling and retaining top-tier talent that can support a continued move toward digitalization.


A third-party consultant can aid in the strategic development of ESG strategies and the adoption of automated technology. They can even provide outsourcing and co-sourcing services for financial and accounting roles as banks and financial servicers reevaluate their employee/departmental needs.


Get Onboard for The Future Of Banking

A bank’s workforce is an integral component of their digital strategy and it has become apparent in the past year that there are unique challenges in recruiting and retaining top talent with digital skills. Continued success in this competitive market will depend on a financial institution’s ability to create a robust strategy for adapting to what comes next. Banks should identify the skills, training, and talent they will need to successfully adapt to a digital environment if they want to maintain their edge in a rapidly evolving financial services landscape.


Written by Mark Houston. Copyright © 2022 BDO USA, LLP. All rights reserved.


Financial Institutions and Banking

Get Ready for General Qualified Mortgage Final Rule

In April 2021, the Consumer Financial Protection Bureau (CFPB) delayed the deadline for compliance with its revised general qualified mortgage (QM) rule to October 1, 2022. But it’s a good idea for banks to start reviewing the requirements now and determine how they’ll need to update their procedures to incorporate the new rule. QMs — which avoid certain risky features and meet other requirements designed to make them safer and easier for borrowers to understand — are presumed to comply with ability-to-repay rules.

Currently, for a loan to be a QM, the borrower must have a total monthly debt-to-income ratio (including mortgage payments) of 43% or less. The revised rule greatly simplifies the definition of a QM by discarding the debt-to-income limit in favor of a price-based model. For loan applications received on or after March 1, 2021, but before October 1, 2022, lenders have the option of complying with either the current or the revised general QM loan definition. (Note: Separate rules apply to “seasoned” QMs.)

New lease accounting rules back on banks’ radar

After several delays — including a one-year postponement due to COVID-19 — the new lease accounting standard is scheduled to take effect for private companies for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. If your compliance efforts have been on hold, it’s time to ramp them up again. The upcoming transition to the new rules may influence current negotiations between banks and their loan customers, and banks that lease their facilities, equipment or other fixed assets should prepare for the rules’ potential impact on their balance sheets and regulatory capital. Plus, the standard’s transition approach may require banks to implement certain changes before the rules take effect.

Guide to conducting due diligence on FinTech companies

Community banks are under increasing pressure to provide their customers with digital products and services, and many banks are partnering with financial technology (FinTech) companies as a strategy for developing innovative, customized, cost-effective solutions. These partnerships can be complex ventures that involve a variety of risks, so thorough due diligence is critical. To assist banks with these efforts, federal banking agencies have published “Conducting Due Diligence on Financial Technology Companies: A Guide for Community Banks.”

The due diligence practices described in the guide are voluntary and don’t establish any new risk-management requirements. But they provide valuable guidance on what community banks should be looking for when they evaluate potential FinTech providers in six areas: 1) business experience and qualifications, 2) financial condition, 3) legal and regulatory compliance, 4) risk management and controls, 5) information security, and 6) operational resilience.

For more guidance regarding your bank’s compliance, contact Jack Matthis at

© 2022

Financial Institutions and Banking Milan, TN

What’s Your Bank’s Plan to Counter Ransomware Attacks?

Cybersecurity continues to be a key risk that businesses face today, and banking is among the industries most affected by cyberattacks. Some experts estimate that around a quarter of all malware attacks target financial institutions. Of particular concern are ransomware attacks, which have increased dramatically in the past couple of years.

The threat of ransomware is so serious that the National Institute of Standards and Technology (NIST) — developer of a widely used cybersecurity framework — recently published a draft Cybersecurity Framework Profile for Ransomware Risk Management (the Ransomware Profile).

Ransomware and risk management

Ransomware is a type of malware that encrypts an organization’s data. Once malware has infected a system, the attackers demand payment in exchange for the encryption key that unlocks the data. In some cases, they may also steal an organization’s information and demand additional payment to avoid disclosure of that information to authorities, competitors or the public.

The Ransomware Profile outlines several basic preventive steps organizations can take to protect themselves against the ransomware threat, including:

  • Use antivirus software at all times,
  • Keep computers updated with the latest security patches,
  • Segment internal networks to prevent malware from proliferating among potential target systems,
  • Continuously monitor for indicators of compromise or active attack,
  • Block access to potentially malicious web resources,
  • Allow only authorized apps, and avoid use of personal apps — such as email, chat and social media — on work computers,
  • Use standard user accounts, rather than accounts with administrative privileges, whenever possible,
  • Restrict personally owned devices on work networks,
  • Educate employees about social engineering (for example, to not open files or click on links from unknown sources without scanning for viruses or taking other precautions), and
  • Assign and manage credential authorization for all enterprise assets and software, and periodically verify that each account has only the appropriate access.

Organizations also should take steps that will help them recover from future ransomware events, including developing and implementing rigorous backup and incident recovery plans.

Backup strategies and incident response plans

Simply keeping backups of data isn’t enough. Any significant gaps in recoverable data or delays in restoring systems can be devastating for banks. So, they must back up data daily and test and periodically validate it. Also, banks should store backups offline to prevent a ransomware attack.

A well-designed backup strategy is worthless, however, without a solid incident response plan. This critical step helps banks restore systems quickly and minimize downtime in the event of a ransomware or other attack. A cyberattack is highly stressful. So, to avoid a paralyzing panic, your response plan should provide step-by-step instructions on who does what and when. The plan also should be kept offline to ensure that it’s accessible if your systems aren’t.

Be prepared

All banks should have a comprehensive cybersecurity plan to prevent ransomware and other cyberattacks and to minimize damages should an attack occur. If your bank doesn’t have a plan or you’re unsure whether your plan provides the protection you need, contact one of our industry leaders about conducting a cybersecurity risk assessment with ATA Secure.

© 2022