5 hopes for the future of banking

January 28, 2017

5 hopes for the future of banking

After the financial crisis in 2008 we had a great chance to change a system that turns out to be rotten in various areas and beneficial to a few who understand how to run the system mainly for themselves.

Banks survive on governmental bail out and the taxpayer has to bear the cost. The regulators, who amongst governmental officials, failed to control banking, striking back fiercely. We still struggle to convince the public of our purpose.

I feel that a lot of the change we have seen has been enforced on banks, as we (rightly) couldn’t be trusted and also because we are very slow in changing old beliefs and seeing an opportunity in the new world.

Speaking to many people in our industry here a my “5 hopes” for the future of our industry:


  1. Vision

  • What’s our long term plan?
  • Where do you we see our institutions in 5-10 years’ time?
  • Why will the customers want to bank with us?
  • Where are we unique?
  • What will a customer make choosing us over another institution?

A vision or common cause unites employees, inspires them to work for something other than money. At current, I can't see an inspiring vision in most banks. We hope some competitors will simply cease to do business in some areas or will suffocate on their old business models. Gaining assets or gaining market share because others exit, isn’t real growth. Talent with experience leaves (or are forced to leave) to work on new start ups in FinTech, when we are like the rabbit in the headlight believing this is all nonsense or we are afraid to invest the money. We hire young folk (cheap cogs) to replace the old cogs in the machine.


  1. Employee engagement

Many employees love their craft but disconnect with their organisations. Their environment is one of control, rather than trust. They are asked to deliver but have hardly any say over the “how to”. We want them to be leaders but do not trust them as such. Management by trust beats management by pressure and fear. Giving people responsibility for the full circle we will get more engagement and more cost savings than when we can imagine.


  1. Invest

Things we invest in grow. When we invest time in a relationship it grows, when we invest in sport we get fitter, when we spend money on a better diet we become healthier. Things we don’t invest in, die or best stagnate. We can look at businesses and evaluate their wealth for our vision, we can cut cost where they don’t fit our vision our close them down. However, all investment has to base on our vision and not on external shareholder value or analyst demands. If employees of a firm believe in the vision it doesn’t matter if others believe in it. If large shareholders don’t agree with long-term goals and are only in for the short term gain, let them go. They wont be part of the long term big value gain too. Saving costs as a primary focus comes at the expense of growth. We deplete our employees, we disengage them and our business stagnates at best.


  1. Authenticity

Authenticity is "the" cornerstone of leadership

It stands for trustworthiness, credibility, correctness, accuracy, legitimacy. You get what you see. No lip service. Living your values means doing it and not just writing it in your mission statement. Social masking breads disengagement. In the long run it takes too much energy to hold up your mask. We still have a hierarchical “hacking” order engrained in our thinking. Therefore, we often do behave outside our authentic self by overplaying our authority or underplaying our input as subordinates. The focus on the vision needs the pari passu input of all employees.


  1. Ethics

At school we ask: “Is this lesson part of the exam?” If it isn’t, we don’t learn it. One can’t “learn” ethics. To a large extend its common sense and part of our upbringing. If something smells fishy, it probably is. Doing mandatory causes with pages of content a lawyer struggles with, is a short term “CYA policy”. I don’t believe it will make a person a more ethical employee. Circumventing ethical behaviour comes from disengagement (no vision) or unrealistic short term goals which create unhealthy pressure and fear to be replaced by a cheaper “cog”. We need to create an environment where doing the right thing trumps short term return.


Re-think and grow

To sum it up, I believe banking has a great future when we are able to change our old thinking. We need to kill the goose that lays the golden eggs and bethink of being of service to clients. Such an act doesn’t need to be at the cost of revenue or share price. When clients buy into our vision because we genuinely demonstrate our values, our share prices will soar.



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