The need for a revised Organising Framework for Occupations in the Banking Sector
Author: Indira Bhagaloo – 2018
On 27 March 2018, President Cyril Ramaphosa launched the Youth Employment Services (YES) initiative, which aims to guarantee over a million young South Africans paid work experience during the next three years. This social compact between government, business and labour is part of government’s drive to achieve inclusive economic growth in the country – one of the goals of the National Development Plan, as encapsulated in Vision 2030. One of the advantages of this workplace experience is that it will clearly indicate which skills are most urgently needed in workplaces for them to function most efficiently and effectively.
When the Sectoral Education and Training Institutions (SETAs) were re-established in 2005 by the Minister of Labour, they were tasked with managing skills development needs across various sectors, where graduates should be equipped with life skills to enter the world of work with ease and quickly become productive (Department of Higher Education, 2005; National Plan for Higher Education, 2001). However, it has been argued by the Department of Higher Education and Training, (2015) that they need to be repurposed to meet current training needs in the workplace. The report suggests that since their creation in 2000, they have not fully enabled learners at learning institutions to progress seamlessly to workplaces in a way that enhances economic growth and social development.
The SETAs are enablers of skills development and transformation in various sectors and supports people development through partnerships, skills development, alleviating unemployment, creating a brighter future and enabling change. They focus on SMEs, the youth, adult education, continuous professional development and research. Skills development has been identified as a key requirement for economic growth in South Africa, as a result, the Skills Development Act provides a framework for the development of skills in the workplace. Amongst other things, the Act makes provision for skills development by means of a levy-grant scheme, and the establishment of 21 sector-specific Sector Education and Training Authorities – or SETAs – to administer the scheme’s funds and manage the skills development process. Part of the function of the SETAs has been to identify scarce and critical skills within the workplace. Scarce skills refer to occupations in which there is a shortage of qualified and experienced people, while critical skills are ‘top-up’ skills within a particular occupation. In order to address this lack of skills, the National Qualifications Framework (NQF) developed Unit Standards that are grouped together to form part of a full qualification that could be registered as a learnership (Department of Education and Labour, 2002).
Through this learnership offering, the SETAs provides a vehicle to employers to take on unemployed youth and/or employed learners from previously disadvantaged backgrounds to complete these skills-based qualifications. These qualifications not only provide learners with a qualification but also equips them with essential skills to execute their job requirements effectively.
According to the National Skills Development Plan, SETA functions will be reduced to focus on workplace learning from 2020 and the Quality Council for Trades & Occupations (QCTO) will take over quality assurance for both public and private providers, the reallocation of SETA funds to QCTO, and shared services for SETAs ‘to reduce costs’ (RSA Government Gazette, 2017). The QCTO in terms of the Skills Development Act (1998), was established to provide a coordinating framework to support various role-players and structures active in the labour market, such as the SETAs, the Standards Generating Bodies (SGBs), providers, assessors and professional bodies. These various bodies created an inefficient, overcomplicated system and the QCTO’s aim was to allow them to focus on what they did best while giving coherence to their activities.
There is a common understanding within the QCTO and South African Qualifications Authority (SAQA) for an occupational qualification that states an occupational qualification means a qualification associated with a trade, occupation or profession, resulting from work-based learning and consisting of knowledge unit standards, practical unit standards, and work experience unit standards as defined in the Skills Development Act and has an external summative assessment (Randall, 2017). The purpose of an occupational qualification is to qualify a learner to practice an occupation reflected in the Organising Framework for Occupations (OFO) or an occupational specialisation related to an occupation that is reflected on the OFO, which includes those occupations for which artisan qualification is required. The OFO is intended to set the base for linking various occupations to specific skills and will assist in identifying further training needs (Department of Higher Education, 2013). The QCTO is the basis for developing occupational qualifications to meet the needs of specific industries. There has been some concern among providers and members of Private Providers of Education Training and Development (APPETD) regarding future qualifications within the QCTO. A paper to this effect was facilitated by APPETD on the 15th June 2018 to the QCTO and addressed the key concerns of providers of which the author of this paper provided input on the banking sector.
A lack of occupational qualifications in the banking sector
Amongst concerns raised in the paper to the QCTO, the author identified the problem statement relating to OFO codes within the banking sector. The current OFO codes have limited scope for the banking sector with only two full occupational certificates registered for a very small banking population. In addition, there are two part-occupational certificates that are outdated and do not speak to current realities in the sector. There is no career lattice evident within QCTO in respect of banking qualifications and the banking sector does not have defined learning pathways. The author’s research indicates that the current situation in the banking sector in South Africa suggests that there is a significant lack of suitable occupational qualifications that addresses the current needs of the sector.
The author further established that within the South African skills development environment, the OFOs were developed to establish a common language for talking about occupations – but very little to no scope was provided in terms of OFO codes within the banking sector. Occupational qualifications play a key role in providing educational solutions to the sector to meet various needs. An occupational qualification should take the following into account:
· The learner should be able to demonstrate occupational competence;
· The design and outcomes of the qualification should address the needs and standards of the banking sector;
· The Integrated Authentic Assessments need to be designed so that learners can demonstrate their competency within their respective roles;
· The design of the qualification should be more effective in promoting the practical application of learning in the workplace than most other qualifications, providing the banking sector with the assurance that those skills levels are elevated while employees improve their work performance; and
· The qualification should clarify matters related to access to mobility or progression within education, training and career pathways.
With the development of the original major groups of OFO codes in 2015 (Gazetted 16 January 2016), and with the updated OFO codes published in 2017, very little to no scope has been provided for OFO codes within the banking sector. This has left a regulated sector without suitable occupational qualifications that address the needs of the sector, especially from a FAIS Fit and Proper perspective.
There are currently only two banking-associated part-occupational qualifications registered with the QCTO, namely:
· Occupational Certificate: Bank Teller (NQF Level 4 / SAQA ID: 101673 / 49 credits)
· Occupational Certification: Bank Customer Services Clerk NQF Level 4 / SAQA ID: 101710 / 51 credits
Although these part-occupational qualifications should lead to a full qualification, the QCTO has failed to establish which full qualification this would be. They are therefore not beneficial to the sector and are in addition non-compliant with current FAIS Fit and Proper requirements (which call for a qualification at NQF Level 5 with 120 credits).
On the list of registered occupational qualifications, there are only two others that could possibly be considered for the banking sector, namely:
· Occupational Certificate: Compliance Officer (SAQA ID: 91671 / NQF Level 6 / 240 credits)
· Occupational Certificate: Organisational Risk Manager (Risk Practitioner) (SAQA ID: 94222 / NQF Level 2 / 125 credits)
These are full qualifications but cater only for a very small percentage of the banking population and do not solve for the FAIS Fit and Proper requirements.
The solution: to create a specific OFO code for the banking sector
According to Price Waterhouse Cooper, (2017); DeLoitte, (2018); business live (2017); fin24 (2018) the traditional bank has a bright future, despite predictions that “disruptive new entrants” may cause banking as we know it to collapse. The winners of retail banking in the future will be those banks that prioritise customer needs over pricing and product concerns. They will need to shift employee skills in a way that integrates soft and technical skills, with a strong emphasis on industry knowledge, analytical thinking, and entrepreneurial development, resilience in a high-pressure environment, visionary focus, self-efficacy and agility. Banking professionals of the future will be highly valued for their ability to think outside the box, solve problems, and predict and avert problems that have not yet materialised. As banks evolve, so, too, do banking regulations. Successful banking professionals will need to be intimately familiar with the regulations governing banking, both in South Africa and internationally, as these changes and adapt to new realities within the sector.
Until recently, when talking about the South African banking environment, words such as ‘stable’ and ‘never changing’ were used, which sounds quite safe and manageable; however, in recent months, emergent narratives has such as ‘disruptors’, ‘digital platforms’ and ‘unexpected entrants’ are beginning to shake up the old, trusted banking industry.
Unexpected competitors from the insurance sector, such as Discovery with their credit-card facility and now a Bank with transactional capability, and Old Mutual with their money account, are also giving the traditional banking industry a run for its money. New entrants such as Bank Zero and Bettr are taking digital banking to a whole new level. The great thing about change and competition is that it raises the bar. The new disruptors are setting the standard for the future of banking with many benefits as a result, not only for the customer, but for the industry.
Emerging themes from the research suggest the following:
Meeting customer expectations: Customers don’t want to have to go into a branch; they don’t want to complete (or keep!) any paperwork and they certainly don’t want to stand in a queue. Banking needs to be instant and safe. Banks also need to provide customers with non-banking options, for example some banks make it possible for customers to collect smart IDs and passports at their branches after applying for them online.
Going digital: The development of digital banking platforms is on a rapid rise and all banks will have to stay one step ahead of the techno age. There are even talks of voice transactions being the way forward.
Soon there will be a rise in cryptocurrencies, despite their currently still being very immature due to price volatility. The cost of electronic transactions will be reduced significantly. Contactless transacting is the name of the game and we will soon move away from using cash and cards.
Going digital benefits us by allowing more people to enter the formal economy. Transaction costs are reduced and innovative businesses can gain market share by introducing new products and services.
Open banking: Based on the premise that the customer’s data belongs to the customer, not the bank, and that all data should be available to any third party with whom the customer wants to do business. This will allow for collaboration between banks and create the infrastructure for competition to thrive. This might lead to a customer having multiple banking products with different banks and being able to view all his or her accounts on one single app (and transact among them seamlessly).
Help us to help you – Customer service won’t just disappear with the increased use of digital platforms and digital wallets. Digital literacy and skills development need to remain high on the bank’s list of priorities and staff should have the skills to help customers help themselves.
The changing competitive landscape in the financial services sector should not mean that traditional banks no longer have a vital role to play in South African banking. Much has already been done by the ‘Big Four’ in terms of hopping on the techno train with mobile banking, banking apps and cardless transactions. However, if banks want to sustain their current profitability levels, they will have to take swift action. They can remain relevant by partnering with fintech companies to find new ways for banking and thereby rapidly implement digital technology.
The professionalisation of the banking sector means transforming the sector’s client-engaging workforce while meeting regulatory requirements and fostering human capital for improved capacity development. In order to continue this initiative, it is critical to develop qualifications that will meet the needs of the banking sector, including:
· Complying with Fit and Proper requirements
· Identifying and nurturing the banking roles of the future
· Ensuring employability and career mobility
· Professionalising the workforce
· Creating a career pipeline for banking professionals
With fast evolving emergent themes in banking, the industry is required to take bold steps in ensuring that current and potential employees have the desired learning pathways to succeed in the industry. Shirley and Stoltz-Urban (2018:26-28) have called for leadership in the banking industry to elicit dialogue in this sector, and “for the development of a competency framework that will enable providers, both public and private, to develop programmes that will equip the ‘banker of the future’ with the skills required to take this industry forward”.
They have proposed that curricula for the ‘banker of the future’ consider the “ways of thinking, ways of working, tools for working as well as essential elements for ‘living in the world’ to develop well-rounded bankers who will be able to navigate the complex new world of banking with confidence”.
Ways of thinking
1. Creativity and innovation
2. Systemic thinking
4. Critical thinking, problem solving, decision making
5. Learning to learn, (lifelong learning) metacognition
Ways of working
7. Collaboration (teamwork)
Tools for working
8. Information literacy
9. ICT literacy
10. Technical/discipline specific knowledge and skills
Living in the world
11. Economic and financial literacy
12. Citizenship – local and global
13. Life and career
14. Personal and social responsibility – including cultural awareness and competence
Table 1 Conceptual frame for 21st century banking skills: Shirley & Stoltz-Urban (2018)
It is therefore the author’s contention that new qualifications be created that will address the needs of the banking sector, updating the OFOs and learning pathways to include relevant and more pressing occupations in banking. The key non-technical components have been validated by Shirley & Stoltz-Urban which proposes well defined skills required for the evolution of banking.
As such, it is recommended that a specific OFO code be created for retail and business banking in order to cater for key regulatory occupations, as defined by the Financial Sector Conduct Authority (FSCA), as Phase One for prioritisation. Note that the roles are not extensive, however, highlights key customer facing and support roles. It is further recommended that new specialisations be created and added to the OFO LIST (naming conventions may differ from bank to bank. Descriptors have therefore been extracted from (PayScale, 2018)
· Senior Bank Manager (handling a number of departmental/organisational responsibilities – orchestrating a sales team, setting short- and long-term goals for a sales division, collaborating with other departments, documenting and presenting sales data, analysing sales and industry trends, communicating with board members)
· Business and Commercial Manager (ensuring that company operations proceed smoothly – can involve drafting and executing plans and tasks, assigning work, organising workflow, recommending inter-departmental changes or improvements, ensuring that expenses are within the operating budget, and drafting and presenting reports to executives as necessary)
· Senior Product Manager (handling many oversight duties involved in getting product from concept to production; maximising product by foreseeing customer and market demands, co-ordinating marketing, sales and other product-implementation strategies)
· Operations Manager (overseeing production of goods and/or services; overseeing various departments such as purchasing, warehousing and manufacturing and ensuring that products meet or exceed client expectations; overseeing budgets and the smooth and effecting running of company operations; complying with safety and environmental regulations)
· Branch Manager (leading teams of employees and ensuring that they build strong relationships with clients; monitoring a branch’s revenue and expenses)
· Relationship Manager – Retail Banking (managing the financial accounts of high-income clients)
· Relationship Manager – Business Banking (liaising between IT and business sectors of a company to help companies better understand customers’ needs; recognising potential risks associated with this)
· Relationship Manager – Commercial (filling a non-technical, business-oriented position within the company; overseeing revenue and expenses used to create financial returns through policy-level work; creating rules of practices to determines the steps the business takes when conducting commercial business; additional sub-roles that can include individual sales responsibilities, marketing, contracting, negotiating, financial administration, contract laws, property management)
· Team Leader (assuming supervisor’s position; overseeing many day-to-day activities of a business or store; reporting to middle or upper management)
· Business Banker (working in a financial institution and managing a business loan portfolio; performing careful analysis of prospective clients’ needs and best options; working with client to determine optimal banking solutions)
· Retail Banker (working one-on-one with customers to handle transactions such as check cashing, withdrawals, loan repayments, cash advances, money transfers; meeting sales goals; working with customers in a face-to-face role at a physical location or in a call-centre environment)
These would be linked to the following occupations:
· Senior Bank Manager – Bank Manager
· Business and Commercial Manager – Bank Managers
· Senior Product Manager – Bank Managers
· Operations Manager – Bank Managers
· Branch Manager – Bank Managers
· Relationship Manager – Retail Banking – Sales Managers
· Relationship Manager – Business Banking – Sales Managers
· Relationship Manager – Commercial – Sales Managers
· Team Leader – Bank Worker
· Business Banker – Bank Worker
· Retail Banker – Bank Worker
These are the core frontline regulatory roles (yet not limited) under which several key occupations within the banking sector can be listed.
If the proposed specialisations are approved, the sector will be empowered to develop occupational qualifications that will not only address key roles within the sector but also address Fit and Proper requirements.
The proposal has been socialised with BankSETA with the following recommendations.
· Once the OFO code has been approved by the QCTO, BankSETA can be appointed as the Development Quality Partner (DQP).
· The detailed breakdown of the OFO code should be undertaken on a consultative basis with representatives from the banking sector and training providers who have a vested interest in training within the banking sector.
· The development of the above occupational qualifications should be prioritised to ensure that the banking sector has suitable qualifications to continue meeting its regulatory Fit and Proper requirements.
The challenge in converting job titles into OFO codes and have all roles coded is evident. Whilst it is encouraged for organisations to work within the national list of codes and map them to the potential job titles the frequent changes in the OFO codes and the difficulty in timeous adjustment has potential for rigidity.
As such, BankSETA has been progressive in its approach regarding the relevance of the OFO codes and has recently commissioned Wits University to undertake research addressing various issues at WITS Research Centre. The absence of representation by QCTO and DHET is evident and may compromise the leap required to revaluate the relevance and significance of OFO codes.
The objectives of the research are as follows:
1) How have employers in the banking sector used the OFO to identify skills needed?
2) How have BankSETA and employers in the banking sector used the OFO for sector skills planning and has it created an interface between education and work?
3) How are occupational classification systems structured and used in work and learning in Singapore and South Africa?
4) What are the emergent notions of skills, jobs, occupations, knowledge and work prevalent in the banking sector and are these notions responsive to local and global changes?
5) What are the relationships between education and work in particular occupations/professions? (What do the curricula look like and how do they relate to work?)
6) What are the observed occupational shifts and changes in the banking sector and are they indicative of a just transition? A key activity in the above process will be mapping jobs against occupations on the Organising Framework for Occupations.
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