This article puts insights on the HRM Challenges which fall under the Syllabus of CAIIB HRM Paper for CAIIB NOV/DEC 2023 Exams.

The Indian Institute of Banking & Finance (IIBF), formerly known as The Indian Institute of Bankers (IIB), is a professional organisation of Indian banks, financial institutions, and their employees. It was founded in 1928 as a company under Section 25 of the Indian Companies Act, 1913. The IIBF’s Mission and Vision Statements are as follows:


To be the leading institution for fostering and developing knowledgeable individuals in the banking and financial sector.


Principally through a process of education, training, examination, consultancy/counselling, and ongoing professional development programmes, to generate professionally certified and competent bankers and finance professionals.

In order to fulfill this mission and vision, IIBF conducts various flagship courses, and CAIIB is one of them. CAIIB EXAM 2023 can be given by candidates who have already cleared JAIIB and are current members of IIBF. CAIIB EXAM 2023 consists of two obligatory papers, i.e., ABM and BFM and one elective paper. Candidates can choose any subject they want for elective papers from the options of risk management, rural banking, retail banking, human resource management etc.

In this article, we are going to discuss human resource management and the significant challenges faced by banks in this area. 


What is Human Resource Management?

The process of finding, selecting, deploying, and managing people is known as human resource management (HRM). Human resources, or HRM, is another name for it (HR). The HR department of a business or organisation is often in charge of developing, implementing, and monitoring the firm’s policies regarding employees and their interaction with them. The word “human resources” was initially used to refer to all of the employees of an organisation in the early 1900s, and it became more popular in the 1960s.

Before we move on to the challenges faced by banks, we need to know what core banking is; then, only we can describe the various challenges.

Core banking 

A back-end system called core banking links together many branches of the same bank to provide real-time service for tasks like loan administration, withdrawals, deposits, and payments.

To give customers more independence when using their accounts and carrying out transactions from any location in the world, the term CORE stands for Centralized Online Real-time Environment. This implies that the customer can experience the bank as a single entity, regardless of their location.

What essential are IT banking features crucial?

We identified the essential banking elements required in a good solution after examining the leading banking software vendors.

  • Dashboard in the Center

To observe the system in real-time, bankers want a single-view dashboard. Additionally, having the same dashboard view available to bankers and customers would aid in speedier problem diagnosis and resolution.

  • Starting up (with KYC features)

The client must sign in to their account using a unique username and password before using the dashboard. Banks can confirm prospective customers’ identities when they register, thanks to KYC features. Users should be able to finish the onboarding procedure stress-free if possible.

  • Using two factors to authenticate

To increase security and safeguard clients’ private information, the system must support two-factor authentication.

  • Using push notifications

Use push notifications to provide clients with fast account updates while developing a core banking solution for mobile.

  • Managing loans

Customers must be able to track their loans and schedule payments in accordance with the predetermined schedule, thanks to the core banking solution.

  • Interest rate estimators

Users must have access to real-time calculators for loan and mortgage payments in order to make wise choices.

  • Live Chat

For users to contact support personnel when they need assistance, the platform must provide a live chat function. Automated chatbots are also capable of answering frequently requested queries using pre-written templates.

  • Management of transactions

To keep their contact lists current, clients can modify their well-liked payments and P2P transfers. Additionally, they can trade on their favoured currencies via multi-currency exchanges.


What varieties of core banking systems are there?

IT core banking systems can be categorized into the following groups depending on where they are hosted:

An in-house solution. The local hosting of the system’s infrastructure gives the bank administration many customization choices.

Core banking software that is housed in the cloud, as the name suggests. An application may occasionally be made available by a cloud provider as a pay-per-use cloud service (CaaS). When they need greater flexibility, businesses might sometimes shift their local servers to the cloud.

Major HRM Challenges facing banks

The financial sector is booming. More than two million people are employed by banks throughout the nation, according to recent estimates.

The banking industry faces particular human resource concerns in addition to the extra difficulties brought on by managing a large number of people. Human resource departments have to deal with workers with various talents and levels of experience because of the peculiar nature of the banking industry. Additionally, front-line staff members are responsible for interfacing with the general public and handling the difficult situation of occasionally turning down a customer who has applied for a loan.

The following are some of the top HR issues that the banking and finance industries will be facing this year:

The Skills Divide

The financial sector is seeing a growing skills shortage daily. The development of digital technology is making it difficult for banks to locate IT specialists and digital professionals who are familiar with the quickly evolving state of banking technology.

Millennial Talent Retention

Millennials fill the bulk of entry-level banking positions. Given that just 10% of millennials intend to stay long-term for a single company, it can be difficult to manage to have such a high number of this group of employees.

That means that more than 90% of millennial employees don’t intend to stay on. The price of acquiring and training new personnel has dramatically increased as a result. The banking industry is wise to continually look for new tactics that will assist them retain staff in light of this predicted turnover.

Making an Alluring Workplace Culture

A recent survey found that more than 86 percent of millennial workers would prioritise a positive workplace culture that aligns with their values over financial compensation.

If banks want to be able to attract and keep top talent, HR departments need to make sure that the work environment is inclusive and has a positive culture. This entails actively seeking out diversity, showcasing an environment that values a good work-life balance, and providing employees with a clear career path with opportunities for advancement.

Candidates now have more options and influence.

Jobseekers now have more options, which gives them greater power, thanks to today’s historically low jobless rates. Many companies, including the banking sector, have found it challenging to draw in and keep top people as a result.

These conditions have allowed job seekers the leverage to negotiate better employment terms and salaries.

In order to be competitive, many banks are now offering attractive incentives beyond monetary compensation, such as wellness programs,  tuition reimbursement,  competitive onus potential, increased vacation time, and an inclusive company culture to stand out from competitors.

Workers with Student Loan Debt

Student debt concerns have greatly impacted employees across the board. Surveys show that over 78% of the employees with student debt want repayment benefits as a part of their salary packages. Offering loan repayment can dramatically help attract and retain employees and boost their performance.

When recruiting entry-level workers fresh out of college, this can be a very effective strategy.

Now that we are done discussing the major challenges HRM facing banks, we would like to tell you that we have free and short easy notes for you all to study from.



CAIIB EXAM 2022 is one of the most challenging exams to clear, and it takes a lot of dedication and determination to pass it but worry not, we are here for you. At Learning sessions, we provide short and easy notes of human resource management to make the learning process easier for you. These notes are compiled by keeping the CAIIB SYLLABUS 2022 in mind. 

These short notes that we provide are complementary along with our video lectures. You can access these notes 24X7 on our apps. We have two apps for android users- ‘Learning sessions pro’ and ‘IIBF LEARNING CENTER’  and for iOS, we have ‘MY INSTITUTE APP.’ 

We have various offers available at affordable prices which you can check out on our website ,i.e. You can easily clear CAIIB EXAM 2022 with the help of our short and easy notes as they would cut your studying time in half and you won’t have to go through the long and tedious books that are available in the market.


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We hope that this article was useful for you. 



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