Banks & The People Agenda
Who would be a banking CEO these days? Waking up to geopolitical uncertainty, cyber-attacks, a raft of new regulations or the menace of technological disruptors aiming to kill off the banking industry altogether. In the words of one banking CEO quoted in a recent PWC report, “the world needs banking but not banks.”
A lot has already been written about how for banks to succeed and remain relevant they need slicker technology and better engagement with their customers. However far less is said about the equally important need for a change in culture which, to quote a recent EY report, encourages “diversity of thought.”
Prior to the financial crisis, banking was in many ways a closed shop. Employees joined a bank at an early stage in their career and moved through the ranks. Whilst many firms may claim to have fostered an entrepreneurial culture, there is an argument that it was not done in the right way, and benefitted the employees of the bank rather than the customer.
However, since we have emerged from the financial crisis, banks are now looking to be more creative around their talent needs, particularly looking to learn lessons from other industries. Whilst complex regulation may make it difficult to be creative about hiring a new Chief Risk Officer or Financial Controller, there is plenty of scope for lateral thinking across areas such as technology, digital, marketing & customer experience; front facing disciplines which have a tangible effect on the customer. It is here where banks can remove the shackles and ensure they remain as nimble as the fin tech firms who are looking to steal parts of their business.
In the Irish market, new perspectives can also be found by attracting Irish expats, who may have left during the crisis, and have gained exposure to transformation programmes in larger economies. Banks are also, arguably for the first time, looking to augment a range of business units with completely new perspectives gained from other industries. In the data analytics space, for example, the “diversity of thought” referred to by EY can be found by hiring experienced professionals from telecoms, or other data heavy industries such as gambling or pharmaceuticals. Technology teams in particularly, given the legacy systems issues facing most banks, will benefit from hiring leaders who have operated within technology firms and can lead a cutting edge digital agenda.
From a HR standpoint, banks need to be ready to integrate new hires from outside industries into their culture and ensure their unique voice is not lost in the maelstrom of received wisdom. In many respects, banks are still on the defensive and must therefore work hard to ensure new hires navigate any initial difficulties and frustrations, and buy into the journey as a whole.
Why move to a bank if you work in one of the areas mentioned above? The ability to get noticed and truly make an impact is a key advantage that a bank may have over a technology firm where a digital expert, for example, will be one of many. One Spanish banker recently suggested that 90% of the world’s banks will vanish in the next twenty years. Whilst that opinion might appear extreme, there is little doubt that many business models are no longer fit for purpose and banks will need to shrink or consolidate. What price to be part of the top team in one of the winners?