Bank management is often made up of people who grew up in the same financial institution and sometimes even in the same small community. This consistency often leads to overlapping skill sets and similar life experiences that can lead to a philosophy and culture that is resistant to change.
Identifying the need for diversity of thought is not easy because the model that banks have operated over the past decades has often worked well for them. This can manifest an attitude of “Why should we do things differently?” »
The answer to that question has come fast and hard in recent years. From the rise of fintech to the ‘great quit’, the need for fresh insights in the financial services industry has never been more urgent. For banks looking to breathe new life into their corporate culture, there are some crucial steps that can be taken to speed up the process.
Seek an outside perspective
There are immediate ways to start combating the groupthink that can stifle progress. A first step is to hire people to provide an outside perspective. Consultants can offer an outside perspective – their job is to be able to ask, “What is really different about your approach? They can also honestly assess where a bank stands against its competitors and what gaps need to be filled.
A clear distinction to make when hiring consultants is to treat them as partners and not as suppliers. Hiring people to tell you what you want to hear will not result in change, so banking institutions need to be open to real dialogue. A true partner will provide thought leadership on what is happening in the industry and will have the research to back it up.
Let the data tell the story
Instead of clinging to the way things have always worked, banks need to rely on data to tell them whether they are succeeding or not. In determining which solutions to deploy and when, banks need to pay close attention to consumer trends, both within the industry and in other environments, such as retail. The research and analysis that helps banks determine how customers transact and interact with their products and services provides valuable insights.
It is also important to leverage studies and data from external partners when justifying change. Most banks do not have the capacity to conduct large-scale studies or identify emerging trends. By leveraging data and research that extends beyond its traditional network, a bank can gain a holistic view of solutions that resonate with today’s consumers.
Invest in pilot programs
After finding the right people and analyzing the right data, the next step is to develop a mechanism to put that data to work and accurately measure success. This process includes a clear definition of objectives and expectations. Pilot programs offer the opportunity to take meaningful action in a way that can scale organically once results start rolling in.
A number of questions must be answered when developing a successful pilot program. Are the target markets clearly defined? Who is expected to adopt a particular product or technology, and equally important, who is expected not to adopt it? Are results set up to be measured continuously in case changes are needed in real time? Is the expected return on investment explicitly defined?
Programs like this don’t always yield immediate results, but they will always provide valuable insights and can bring about the kind of change needed for long-term growth. By clearly defining objectives from the outset, they can be important drivers of change.
Advocate for change at the board level
Advances in technology and changing consumer behavior continue to drive the transformation of financial services. For an industry prone to groupthink, pursuing diversity of thought also requires recruiting outside of banking – new voices are needed throughout the organization to help create an adaptive culture. Banks that harness research and data to navigate a changing landscape will position themselves to thrive.
Getting buy-in from the board isn’t always easy, but change can be justified by supporting objective research and new ideas from independent voices. It’s the board’s job to think about the bank’s finances, but it lacks the day-to-day customer experience needed to anticipate new trends. Using diverse voices and research to support bold ideas makes it more likely that financial investment can be secured for programs that engage customers and communities and lead to lasting success.
Simon Poley is responsible for consulting and advisory services at Diebold Nixdorf.