Let’s face it. The financial sector is a competitive industry — one that’s focused on hiring cream-of-the-crop talent from Ivy League Schools for decades.
Top that off with increasing demand for financial jobs projected well into 2032, and suddenly, the competition just got a whole lot more fierce.
So, as a financial services firm looking to hire the best talent in 2024, how do you give yourself the best shot at hiring (and retaining) top talent to help spearhead your growth without impacting your bottom line?
There’s no doubt that artificial intelligence (AI) has played a key role in data analytics for marketing. Thankfully, with its data-crunching abilities, there’s also a wide range of benefits for human resources (HR) teams.
In this article, we’ll explore the six ways you can integrate AI into HR within the financial sector.
1. Recruitment and Talent Acquisition
The last thing your organization needs is bad hires. These are the people who:
- Aren’t competent enough to fulfill the obligations of the role
- Don’t embody your organization’s core values
- Don’t have the right cultural or personality fit
Let’s not forget that bad hires are a time drain and expensive. By the time most organizations realize things are going wrong, they’ve already wasted $18,700 (on average) to train and pay this person.
And the worst part? They usually don’t end up sticking around for long. Studies show that 30% of bad hires leave within 90 days for the following reasons:
- They feel the company isn’t a good cultural fit
- The role doesn’t meet their expectations
Thankfully, you can mitigate these issues with AI — here’s how.
Resume Scanning
You can feed AI software the ideal qualities needed for an advertised role. Then, it scans and evaluates each applicant’s resume and cover letter to identify the candidates with the highest potential.
This automation saves countless hours (if not days) in reading individual resumes. Now, let’s take a look at an example in action.
Say SoFi is looking to hire the perfect candidate for onboarding new clients when they open an online savings account. To find the right fit, they ideally want to identify potential candidates with prior experience in consumer banking rather than financial planning and analysis (FP&A) or accounting.
They can train their AI models on keywords to pick out keywords and phrases such as:
- Financial concepts related to savings accounts (interest rates, overdraft fees, etc.).
- Familiarity with online banking platforms and digital financial services.
- Ability to assist customers with their accounts and resolve issues.
- Awareness of financial regulations and compliance standards.
- Knowledge of how to protect customer information.
But that’s not all. AI is the perfect solution for minimizing unconscious biases. You can finally evaluate based on job criteria alone.
How can you apply this example to your organization? Avoid feeding the AI model generic job competencies like “being organized” or “attention to detail” because that would broaden the shortlist.
Give it historical employee performance data and the specific qualities that set someone up for success in the specific role you’re hiring for. That way, AI can use predictive analytics to tell you which candidate is the most likely to succeed.
Your chances of making a bad hire now significantly drop.
AI Chatbots
AI chatbots are about going a step ahead before resumes even hit your desk.
They can conduct preliminary screenings by asking relevant questions and assessing candidate responses, thus creating for you a shortlist before the shortlist!
Chatbots also enhance the candidate experience by offering a more interactive and responsive application process — making them likely to participate throughout the hiring process with more enthusiasm.
2. Internal Hiring
The silver lining of employees leaving is that it gives you a chance to restructure and streamline the work among existing employees.
So, whenever someone leaves, it’s best practice to assess whether an employee already on the books can fill the job opening.
With data onboarding, you can seamlessly integrate vast amounts of employee data, from recruitment records to performance metrics. This robust dataset now empowers your AI tools to generate valuable insights, enabling your HR professionals to:
- Build a high-performing workforce
- Optimize internal recruitment
- Predict employee potential
Now, any internal hire recommendation is based not only on their current skill set but also on their potential for growth and career development.
If an employee is falling slightly short of meeting the criteria for a job, AI could also suggest tailored learning modules to help the employee bridge any skill gaps.
This approach aids the employee in realizing their career aspirations. It also helps you:
- Reduce turnover costs
- Retain valuable talent
With the help of AI, you can find the right internal talent and nurture them for roles critical to the company’s growth.
3. Employee Onboarding
Once you’ve secured the necessary talent, you want them up and running immediately. AI plays a pivotal role in automating parts of the modern paperless onboarding process.
Say a company in the financial industry hires an analyst. The AI-driven onboarding system will initiate the process automatically:
- Guide the new hire through the essential documentation to ensure compliance.
- Schedule the necessary training sessions, focusing on areas of weakness.
- Give them access to relevant employee resources and software.
The AI system continually assesses the new hire’s progress through quizzes and interactive sessions, adjusting the learning plan as needed.
For example, if the new analyst excels in the initial modules on financial regulations, the system might advance them to more complex topics such as derivatives ahead of schedule, speeding up learning and development.
Instead of every employee having the exact generic onboarding experience, AI provides training that closely aligns with their competencies and the organization’s specific needs.
With 88% of employees unhappy with their company’s onboarding process, getting this right will do wonders for employee retention and boost your employer’s brand within the financial industry.
Are you stressed about the upfront investment in these HR tools and how it’ll impact your bottom line? Don’t worry. There are plenty of highly rated free HR software with training and onboarding features that employees can access on the go.
Employees get a better onboarding experience. And there’s no out-of-pocket cost. It’s a win-win.
4. Organizational Network Analysis
Streamlining internal workflows is crucial for the finance industry. AI supercharges your finance companies’ organizational network analyses(ONA).
Let’s consider a hypothetical large investment bank that used AI-driven ONA. The AI system examines financial workflows like:
- Collaboration on financial reports
- Participation in strategy meetings
- Email exchanges
During this analysis, it discovers a highly interconnected group within the trading department who are working effectively and sharing information crucial for real-time market decisions.
However, the AI also identifies a critical issue: the compliance and risk management teams are somewhat isolated from the core operational teams like trading and asset management.
This disconnection could delay important compliance checks or risk assessments, affecting the bank’s ability to respond swiftly to market changes.
Additionally, the system spots a key influencer in the finance department — not a top executive but a mid-level manager who acts as a central node in the information flow between finance, operations, and the executive team.
This insight allows the bank to leverage this individual for better coordination across departments.
The system also flags a potential bottleneck: a senior executive whose approval is required for high-value transactions, leading to decision delays.
Addressing this bottleneck through delegation or process streamlining could significantly enhance operational efficiency.
In the finance sector, where timeliness is non-negotiable, examples like these show how AI-driven ONA can be instrumental in mapping and optimizing internal networks.
5. Enhancing Written Communication
The margin for error in the financial sector is razor-thin. One comma can make the difference between thousands and millions of dollars. So, proofreading offer letters before they go out to candidates is well worth the extra effort.
Thankfully, AI-powered online proofreaders can reduce the time burden without sacrificing the quality of the review.
How? These tools leverage advanced algorithms to analyze grammar, syntax, and even context. The result? You can significantly reduce the likelihood of mishaps in critical financial reports and documents.
In other words, AI proofreading tools can automatically detect and correct grammatical mistakes, typos, and inconsistencies. Now, your HR team can focus on the substance of their messages without being bogged down by mundane proofreading tasks.
This enhances the overall quality of written content and contributes to a professional and polished image for financial organizations.
6. Employee Benefits, Compensation, and Wellness Programs
How do you know whether your finance company’s benefits are competitive in the industry, especially with the complexities of global payroll?
One way financial services companies can keep up is by taking on the time-consuming and painstaking task of searching for relevant data online.
Or you can ask AI to continually scan and analyze the available data to keep you abreast on a regular basis. That way, you can:
- Tailor your packages by demographic and protected characteristics. What a white male needs might be different from a Black female. The perks a disabled employee desires would differ from those of a non-disabled employee.
- Offer employees relevant mental health and wellness programs.
- Regularly update your benefits package.
For instance, we learn from the Employee Wellbeing and Voluntary Benefits Survey that employees care most about
- Performance bonuses
- Medical coverage
- Paid sick days
- Paid time off
On top of that, here are some further insights into what employees value.
Let’s not forget that 79% want employers to help meet their emotional needs. With the help of AI, the financial services industry can use this and thousands of other data sets to build effective packages that keep the best talent.
What Challenges Do Financial Sector HR Teams Face When Implementing AI?
Implementing AI in HR for the financial sector presents unique challenges, largely due to the sensitive nature of financial and employee data. Here are some key obstacles:
- Data Privacy and Security: AI in HR requires access to vast amounts of employee data, which poses privacy concerns. Financial institutions are especially cautious due to regulatory compliance requirements around personal data. Ensuring robust data encryption and secure storage is essential to gain employee trust.
- Cost of Implementation: AI technology can be expensive to develop, integrate, and maintain. Smaller financial institutions, in particular, may find investing in AI infrastructure and talent challenging, making it harder to compete with larger firms.
- Employee Resistance: Some employees may feel apprehensive about AI in HR, fearing reduced privacy, job insecurity, or biased evaluations. Building awareness and transparency around AI’s role and benefits can help mitigate resistance.
- Technical Expertise: Effective AI implementation requires HR teams to work closely with IT and data science teams. However, finding HR professionals with the necessary technical skills or hiring data experts with HR knowledge can be difficult.
- Bias in AI Algorithms: AI algorithms can unintentionally reinforce biases if trained on unrepresentative data. This can lead to skewed hiring or evaluation decisions, particularly problematic in the highly regulated finance industry.
Streamline the Hiring Process With AI-powered HR Software
Artificial intelligence is an impressive technology that can significantly improve a historically tedious hiring process.
From optimizing talent acquisition and streamlining administrative tasks to fostering data-driven decision-making, it opens the door to cost savings and finding the best candidates that’ll actually stick around.
So, it’s safe to say that AI is changing the future of recruitment and HR. And those in the financial services industry who act first will reap the rewards in 2024.
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