Diversity in Banking

Blog: A Holistic Approach to Diversity in Banking

August 08, 2022  |  SIMON POWLEY

Using a range of voices and research can support bold ideas for programs that engage customers and lead to sustainable success. Bank leadership is often comprised of people who have grown 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 change-resistant philosophy and culture.

Identifying the need for diversity of thought is not easy because the model that banks have operated under the last several decades has often worked well for them. This can manifest an attitude of “Why should we do anything differently?”

The answer to that question came swiftly and harshly in recent years. From the rise of fintech to the “Great Resignation,” the need for fresh perspectives in the financial services industry has never been more urgent. For banks looking to breathe new life into their company culture, there are some critical steps that can be taken to accelerate the process.

Seek an outsider perspective
There are immediate ways to start combatting the groupthink that can stifle progress. A first step is to hire people to provide an outsider perspective. Consultants can offer an outsider view – their job is to be able to ask, “What’s actually different about your approach?” They can also honestly assess where a bank stands relative to competitors and gaps that need to be addressed.

One clear distinction to make when bringing in consultants is to treat them as partners and not vendors. Hiring people to tell you what you want to hear is not going to result in change, so banking institutions must be open to having real dialogues. A true partner will provide thought leadership about what’s going on in the industry and have the research to back it up.

Let data dictate the story
Instead of clinging to the way things have always done, banks need to rely on data to tell them if they are successful or not. To determine which solutions to deploy and when, banks should pay close attention to consumer trends, both within the industry and in other environments, such as retail. Research and analytics that help banks determine how customers are conducting transactions and interacting with their products and services offer valuable insights.

It’s also important to leverage studies and data from outside partners when making the case for change. Most banks don’t 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 get a holistic view at solutions that resonate with today’s consumers.

Invest in pilot programs
After getting 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 clearly defining objectives and expectations. Pilot programs provide the ability to make meaningful measurements in a way that can organically scale once results start to flow in.

A number of questions need answering when shaping a successful pilot program. Are target markets clearly defined? Who is expected to embrace a particular product or technology, and just as importantly, who is expected to not embrace it? Are results set up to be measured on an ongoing basis in case changes are needed in real time? Is the expected ROI explicitly defined?

Programs like this may not always yield immediate results, but they will always provide valuable insights and can drive the type of change necessary for long-term growth. By clearly defining goals up front, they can be major vehicles for change.

Advocate for change at the board level
Technology advances and shifts in consumer behavior continue to drive transformation in financial services. For an industry prone to groupthink, pursuing diversity of thought requires also hiring from outside banking – new voices are needed throughout the organization to help create an adaptive culture. Banks that tap into research and data to navigate a changing landscape will position themselves to thrive.

Getting buy-in at the board level is not always easy, but the case for change can be made by supporting objective research and new ideas from independent voices. It’s the board’s job to think about the bank’s financials, but they don’t have the day-to-day customer experience necessary to anticipate new trends. Using diverse voices and research to support bold ideas makes it more likely that a financial investment can be secured for programs that engage customers and communities, and lead to sustainable success.

Our team of experts can help you create the right delivery model that is tailored to your specific needs. Schedule a consultation today

First appeared in BAI Banking Strategies

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