As the characteristics of business banking continue to evolve almost quarterly, so do those of the C-suite dedicated to these necessary changes. As recently highlighted in American Banker, institutions of all sizes are finding that as customers become more knowledgeable about lending and employees more selective about their work environment, it’s in the best interest of revenue and productivity to have high-level individuals act as champions of progress and mentors of transition. These organizational adjustments and additions can be attributed to the financial and reputational hit that banks took during and just after the Great Recession, the rise of the Millennial generation’s population and discerning place within the business community, and the shear competitiveness of banking in an age of low interest rates and a hyper-dynamic lending marketplace.
Design Your Own…Job Title
One executive cited within the American Banker piece is a chief strategy officer charged with planning and steering the growth trajectory of his bank as it navigates industry obstacles, while removing role redundancies with the goals of cutting expenses and increasing revenues. Among Timothy Spence’s specific endeavors are the utilization of data analytics for commercial customers and investigation of banking behaviors of millennials. He conveys the critical importance of his role by saying, “If you want to make a change, you have to be really deliberate and consistent.”
Steve Ellis is EVP of innovation at Wells Fargo, overseeing that company’s one-hundred-person incubator team. His sphere of influence centers on exploring, defining, and perhaps adopting components of banking innovation, or more importantly, disruption. By staying ahead in areas like data authentication and biometrics, Ellis’ multi-faceted role not only allows him to effect change across several of Wells Fargo’s divisions, but also ensure that the company remains competitive and grows revenue by adding value for customers.
A third C-suite-level position explored is Dennis Budinich’s chief culture officer role at Investors Bancorp. It’s there that Dennis keeps employees engaged and happy as fresh programs and processes designed to update legacy functions and systems are rolled out. This allows employees to focus on their core strengths and most valuable contributions. Dennis’ cross-functional position helps facilitate these major changes by keeping communication between typical banking silos open, and in turn this fosters collaboration among peers.
Not Your Grandfather’s Bank
The days of rigid, hierarchical organizational charts and isolated C-suite roles above respective departments are giving way to these new, interdepartmental and dynamic capacities. This isn’t occurring out of some frivolous trend in organizational management, carried over from the Silicon Valley startup world, or because business banking is desperately looking for a 21st century identity. The reason is as fundamental as the market-based system in which banks operate: customer demand.
As previously stated, banks were heavily impacted during and following the Great Recession, and now, with a focus on structural reforms and greater customer accessibility, they are listening to what potential borrowers are saying loud and clear. And that shift towards a customer-centric banking environment and vision requires the demolition of functional redundancies and the establishment of roles that bridge both internal and external divides.
In American Banker, Gerard du Toit of Bain & Co. is quoted as saying, “Completely reorganizing the bank to operate across all of the silos is unimaginable.” This succinct explanation of why Timothy, Steve and Dennis’ positions exist is transferable to the digital and user experience initiatives they are undertaking. While the functionality of business banking may be in the midst of a transformation, no one is talking about completely destroying what is without a doubt a pillar of our economic existence. Rather, any experimental endeavors or streamlined programs must be retrofitted to the critical framework that already exists.
A Resolve to Solve
Illustrated by the creation of unconventional executive titles and innovation incubators, banks are serious about becoming more operationally efficient and market responsive. The dilemma of how to reduce costs while raising revenue through increased customer traffic is complex; how one fattens margins in today’s banking environment is the perpetual million-dollar question, but banks are quickly embracing their market’s hyperactivity. By implementing new strategies designed by nontraditional industry executives, effectively conveying their greatest asset, knowledge, in manners more modern and proactive than ever, business banks are poised to yield positive results both in terms of income statement bottom lines and customer experience intangibles.