It’s a sign of intelligence to embrace change rather than ignore it, especially when it’s clear that there is no other way forward.
By MaiteBarón, CEO, The Corporate Escape™
Whatever critics may wish, banking is here to stay … at least for the foreseeable future. But that doesn’t mean the sector isn’t long overdue a makeover.
Events in recent years have rightly led to the widespread belief that banking has lost its way. The issues that continue to arise, such as Libor fixing, rate swap scandals and ongoing mis-selling, have done little to blow away the dark cloud and large question mark that hang over the industry.
But, if banking is to reinvent itself, at some point it must wholeheartedly grasp the challenge of turning from ogre into dependable guardian of financial well being, not least by looking at the way it interacts with and provides services to its customers.
So what needs to be done to make the transition? Here’s some food for thought.
- Build a culture of trust and transparency
This is essential if banking is to regain its once well-regarded position in society, something that’s eroded away over the years. In part, this is the due to the ‘silo’ structure within large organisations where groups working in isolation from other elements of the business are shielded from ‘outside’ influences, and therefore lose awareness of consequences of their actions on others.
- Welcome different ways of thinking
Working in a bubble, with like-minded people, there is little to disturb or question the prevailing culture. In such a closed environment, even if not intentionally, secrecy and introspection are the inevitable consequence.
- Make customers feel part of the conversation
At a retail level, the public could help play a part in helping to create greater transparency by becoming more finance-savvy themselves, something that banks should actively encourage … and not just as a cosmetic exercise.
- Make money education accessible and fun
Better financial education would enable more people to feel comfortable discussing money matters, to the point where it became as natural as talking about the weather … or almost.
Unfortunately, as long as there remains a sense of mystery around money, people will continue to distance themselves from it and so put a barrier between themselves and financial institutions, feeding the disconnection between banks and their customers.
From a young age, we need to become more financially literate so we can have a better understanding of the profound effect the money decisions we make can have on us and our families. Banks can play their part in making that happen by helping to create a new generation of financially savvy individuals.
- Develop employees who aren’t focused solely on process or profit
Of course, for many banking customers, there is a sense that this disconnection is virtually institutionalised, not just by procedure but also by the attitudes of banking employees. Clearly, the development of greater emotional intelligence within the banking community would help in providing a more empathetic response when talking with customers, particularly those in difficult financial situations.
- Make creativity and innovation part of your cultural DNA
So, while the sector has come a long way from the days when it offered a limited range of vanilla products, with little distinctiveness between banks, there is still a need for more creativity and innovation. This is particularly so in our fast-changing digital world,where people of all ages search for and expect new ways of doing things that are more in keeping with their lifestyles.
For banks, that ought to mean developing innovative money solutions, nuanced to the needs of different groups, especially when it comes to provision of out of branch services.
Apart from their duty to customers and shareholders, being in control of the nation’s purse strings puts banks in a privileged position that is distinct from any other type of business. As such, they should be regarded, and should regard themselves, as having an obligation to society at large.
That means starting to look and think beyond pure profit, and some financial institutions are taking a few tentative steps towards this. Events since 2008 have shown what happens when banks focus solely on the bottom line. If there is any sense of déjà vu in that respect, we all know that politicians of every denomination are ready and waiting to hold banks to account.So better to make the first move, than to be beaten to it by those with axes to grind and careers to promote.
- Develop a values-driven organisation that works for the greater good
Banks must start to think about the extra value they can bring to a community, above and beyond merely servicing someone’s account. This requires an ethical shift to a more values-driven way of thinking – something that’s already happening in the wider business community. By taking on a more inspirational role, banks could be a driving force for both economic growth and social change through the encouragement of enterprise. In so doing they could yet turn themselves from ‘bad guys’ into good.
- Bring soul and heart back into banking
Going forward, banks simply need to be more human. We all know that processes will almost certainly become increasingly automated. However, that doesn’t mean that banks should hide behind the machine, or the human touch will be lost, further widening the divide between banks and their customers. People need to be around when important decisions have to be made. Some boutique banks are already devolving decision making to local level, which, in an increasingly sterile digital age, brings a sense of value and care back to the banking experience.
- Think partnership and collaboration
Naturally, there are financial considerations in retaining the ‘human factor’. It is after all the need to save on costs that has increasingly driven people out of banking. To counterbalance that effect, perhaps banks should start to think more collaboratively, about working in partnership with one another. A collective approach may be just what’s needed, with banks sharing the provision of customer services, cutting costs to customers and offering them the support they need in a way that’s less possible when banks take an individual and competitive stance.
Every business sector periodically undergoes periods of change that can be either be resisted or see as an opportunity to be embraced. If banking is at such a transition point then reinvention may be the best cure.
At The Corporate Escape™, developing entrepreneurial leaders to succeed in a future world of work is our passion. It’s time to take control of your career by shifting your mindset.
Global Banking & Finance Review
Why waste money on news and opinions when you can access them for free?
Take advantage of our newsletter subscription and stay informed on the go!
Finance3 days ago
Why should the financial sector care about the dark web?
Top Stories3 days ago
Dollar steady as week of key central bank decisions kicks off
Banking3 days ago
BANKS KNOW WHAT EMBEDDED FINANCE IS, BUT DO THEY KNOW HOW TO USE IT?
Technology3 days ago
Xsolla Launches Mall, An Online Destination For Video Games