Career Bankers Are The Industry’s Biggest Threat?
David M. Brear
Co-Founder & CEO
Legacy banking organizations are filled with career bankers who are set in their ways and naturally resist change. These managers can stifle the creativity and innovative spirit of others, impacting the ability for the organization to make needed transitions and remain competitive. What type of banker are you?
Banks have been talking about a legacy holding them back for decades, but usually this discussion revolves around IT, core banking systems, distribution channels and traditional operation processes.
This article was first published on the Financial Brand in July 2015.
[vc_row][vc_column][vc_column_text]Legacy banking organizations are filled with career bankers who are set in their ways and naturally resist change. These managers can stifle the creativity and innovative spirit of others, impacting the ability for the organization to make needed transitions and remain competitive. What type of banker are you?
Banks have been talking about a legacy holding them back for decades, but usually this discussion revolves around IT, core banking systems, distribution channels and traditional operation processes.
[/vc_column_text][vc_column_text]As banking has tried to embrace the required components of becoming a more digital organization that is better positioned to defend against an increasing number of FinTech start-ups, a question has been raised by many in the industry … “What is the biggest impediment holding the banking industry back?” The answer may be as simple (or complicated) as the people within the organization.
People do the work, make the decisions on what to invest in, define the culture and decide who to hire and who to promote.
Despite FinTech startups picking off customers around the edges, banks still have most of the customers, billions to invest in technology and marketing, but have now become calcified around processes and technologies that no longer serve the organization or the consumer. Banks and credit unions, in their current form, are becoming less relevant to the challenges and market that they operate within despite having a wealth of resources and experience.
The financial crisis, re-organization after re-organization, low wages relative to expertise and a public perception of being the “bad guys” have left significant splits in the workforce of most major financial institutions. In most organizations, the banking workforce at most organizations now fall into 8 distinct categories:[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Decision Makers[/vc_custom_heading][vc_column_text]These are the absolute few. Some sit up in the clouds where the air is thin and have achieved prominence in the organization by “doing their time.” Many of these are lifetime bankers with a history of being right by doing things the way they have been done in the past. Unfortunately, there isn’t a new wave of capable people being brought in to respond to the new realities in banking. How much change can so few make? Time will tell.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Empowered[/vc_custom_heading][vc_column_text]These are one of the smallest group in the bank. They have the power to make and influence real change across the entire organization.
This is not to say they are capable, but they have power at their disposal to impact organizational culture and the overall strategic direction of the organization.[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Retire to Be’s[/vc_custom_heading][vc_column_text]Estimate are that this category of banking executive equates to roughly 10% of the overall workforce. They have likely been at the organization a long time, probably have a large retirement war chest and a potential bonus pool that is a driving factor in their decision making process. This group, generally speaking, do no push the agenda or seek change in the organization.
In fact, they may be the roadblock to many of the changes needed within the organization. Given their tenure, they are likely middle or senior management that have an impact on daily decision making.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Incompetent[/vc_custom_heading][vc_column_text]These are one of the smallest group in the bank. They have the power to make and influence real change across the entire organization.
This is not to say they are capable, but they have power at their disposal to impact organizational culture and the overall strategic direction of the organization.[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Deadwood[/vc_custom_heading][vc_column_text]This category of employee is in a job and/or an organization they don’t care about, and are probably just there for the money. There is nothing wrong with this group, and in many cases they can get the job done.
They just do not have the desire to spearhead change within the organization. If they stay in the organization, they will most likely transition into being ‘Incompetent’ or a ‘Retire to Be’ and, in a few rare examples, become an ‘Empowered’ employee.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Disenfranchised[/vc_custom_heading][vc_column_text]
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_single_image media="55935" media_width_percent="100"][/vc_column][/vc_row][vc_row][vc_column column_width_percent="100" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/1"][vc_column_text]With this distribution, if 71% of bank employees are Incompetent, Disenfranchised or Deadwood, are we really surprised with the current state of the banking industry?
Look around the room during your next meeting. Who in the room would you put in what category, and how could this impact the ability to move your organization forward? Who would you want on your team? How do you convince the others of the need for change?
More importantly, if you looked in the mirror, what type of banker are you?[/vc_column_text][/vc_column][/vc_row]
[/vc_column_text][vc_column_text]As banking has tried to embrace the required components of becoming a more digital organization that is better positioned to defend against an increasing number of FinTech start-ups, a question has been raised by many in the industry … “What is the biggest impediment holding the banking industry back?” The answer may be as simple (or complicated) as the people within the organization.
People do the work, make the decisions on what to invest in, define the culture and decide who to hire and who to promote.
Despite FinTech startups picking off customers around the edges, banks still have most of the customers, billions to invest in technology and marketing, but have now become calcified around processes and technologies that no longer serve the organization or the consumer. Banks and credit unions, in their current form, are becoming less relevant to the challenges and market that they operate within despite having a wealth of resources and experience.
The financial crisis, re-organization after re-organization, low wages relative to expertise and a public perception of being the “bad guys” have left significant splits in the workforce of most major financial institutions. In most organizations, the banking workforce at most organizations now fall into 8 distinct categories:[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Decision Makers[/vc_custom_heading][vc_column_text]These are the absolute few. Some sit up in the clouds where the air is thin and have achieved prominence in the organization by “doing their time.” Many of these are lifetime bankers with a history of being right by doing things the way they have been done in the past. Unfortunately, there isn’t a new wave of capable people being brought in to respond to the new realities in banking. How much change can so few make? Time will tell.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Empowered[/vc_custom_heading][vc_column_text]These are one of the smallest group in the bank. They have the power to make and influence real change across the entire organization.
This is not to say they are capable, but they have power at their disposal to impact organizational culture and the overall strategic direction of the organization.[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Retire to Be’s[/vc_custom_heading][vc_column_text]Estimate are that this category of banking executive equates to roughly 10% of the overall workforce. They have likely been at the organization a long time, probably have a large retirement war chest and a potential bonus pool that is a driving factor in their decision making process. This group, generally speaking, do no push the agenda or seek change in the organization.
In fact, they may be the roadblock to many of the changes needed within the organization. Given their tenure, they are likely middle or senior management that have an impact on daily decision making.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Incompetent[/vc_custom_heading][vc_column_text]These are one of the smallest group in the bank. They have the power to make and influence real change across the entire organization.
This is not to say they are capable, but they have power at their disposal to impact organizational culture and the overall strategic direction of the organization.[/vc_column_text][/vc_column][/vc_row][vc_row row_height_percent="0" overlay_alpha="50" equal_height="yes" gutter_size="3" shift_y="0"][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Deadwood[/vc_custom_heading][vc_column_text]This category of employee is in a job and/or an organization they don’t care about, and are probably just there for the money. There is nothing wrong with this group, and in many cases they can get the job done.
They just do not have the desire to spearhead change within the organization. If they stay in the organization, they will most likely transition into being ‘Incompetent’ or a ‘Retire to Be’ and, in a few rare examples, become an ‘Empowered’ employee.[/vc_column_text][/vc_column][vc_column column_width_percent="100" back_color="color-lxmt" overlay_alpha="50" gutter_size="3" medium_width="0" shift_x="0" shift_y="0" z_index="0" width="1/2"][vc_custom_heading]The Disenfranchised[/vc_custom_heading][vc_column_text]
