How leaders can help financial services be a force for good
Leading a financial services organisation right now is like walking a tightrope, on stilts, during an earthquake. We all know the challenges: the cost of living crisis, ongoing climate challenge, and serious geopolitical unrest. But in the midst of all this, we believe the opportunity is there for financial services to become an incredible force for good. That includes creating a safe financial system built on trust, helping customers to prosper in their communities, and using the full potential of financial services to help save the planet. All that takes skilled, thoughtful leadership. And it’s much more than personal success or industry recognition at stake.
Many financial services leaders are already embracing a future focus, according to our recent research. Almost three-quarters of the financial services leaders we spoke to (73 percent) identified themselves as revivers: focused on acceleration, transformation, and investing in growth and innovation.
This is above average compared to other sectors: overall just over half (56 percent) of leaders saw themselves as revivers, not survivors. Change in the sector is mostly being driven by technology acceleration, and the industry’s strong customer focus: more than three quarters of financial services leaders say they’re using customer trend data to prioritise objectives and quickly respond to changing demands. That’s good news, but in a time of crisis and unrest, there’s more to be done.
So how can leaders make the most of opportunity to be a force for good? We believe it comes down to balance. Nine in ten financial services leaders told us that the best leadership comes from being both compassionate and commercially savvy. It’s a fine line: being kind towards customers, who may be facing immense challenges, with enough commercial awareness to keep delivering value for shareholders. And it’s just one of the tightropes leaders need to tread. Being flexible enough to deal with constant change, while being bold and decisive enough to make things happen. Here are three ways to find the balance.
1. Get ahead of the curve: make space for different voices
One of the trademarks of reviver leaders is their capacity to think ahead: not just following the regulations but doing things better before you have to. Financial services is the standout sector for seeking inspiration in surprising places, with four in five leaders focused on that (83 percent). But this doesn’t always play out across all areas of focus, for example in recruitment. Financial services is a varied sector, and specific skills are important for many roles, but all too often businesses look for people who’ve done exactly the same role somewhere else. Those people might have the right skills, but it’s harder to think differently when you’ve always had one way of doing things. So, our recommendation is to recruit with more imagination and breadth: thinking beyond specific technical skills, finding inspiration from other areas of financial services, and other industries altogether. And embrace your internal disruptors, the ones who want to challenge the status quo and do something different. That could mean creating a group of non-executive employees to share insight direct to top-level leadership, also known as a shadow board, or finding other ways to bring in new voices.
2. Make authenticity everything: build trust by being real
Building customer trust and transparency is an ongoing challenge. Half of the financial services leaders (50 percent) we spoke to ranked it as the most challenging trend to address. The aftermath of the last financial crisis still lives on in public memory. Research shows that two thirds of British adults still didn’t trust banks to work in the best interest of society. Interestingly, at the start of the pandemic, trust in the financial sector went up. For many financial services organisations, this is when leaders had to become more authentic, leading meetings from their homes, becoming more relaxed and casual. Resist the urge to retreat into a more distant, less human style.
The culture in financial services is shifting, but there’s still a way to go. And that starts from the top. How willing are you to be real, to have empathy, to be selfless in the interests of a wider good? And how willing are you to do all this when times get tough? Your purpose should be the compass that guides you through the most challenging times, and as a leader you need to model that purpose consistently. Four in five leaders in financial services (80 percent) told us that their purpose creates a unifying sense of optimism and creativity. So this is an opportunity to bring people together, if you’re willing to define and live by a purpose that creates impact beyond your bottom line.
3. Be kind: inspire and motivate with optimism
The financial services sector isn't renowned as a kind industry to work in. But what if it was? The reality is that old models of leadership based on command and control aren’t particularly fit for purpose anymore. They don’t work for employees, who are moving to businesses that are actively seeking to do good. They don’t work for customers who are increasingly fed up with institutions that chase excessive profits without considering the human impact. These old ways of doing things don’t work for leaders either, where the pressure to have all the answers is more likely to lead to stress and burnout than any good outcomes. Fostering optimism through kindness is one of the most positive impacts that financial services leaders can have. As a study by Gallup found, happy employees translate to happy customers. And purposeful kindness is more likely to attract the right kind of talent, including a younger generation who are itching to do good. Being a kind, compassionate leader is good for all of us.
The right leadership approach will not only open doors for both organisations but the industry more broadly. Banks, insurers, and pension providers that embrace the right leadership attributes will be best placed to pursue business for good, prove their worth to society, meet regulators expectations, inspire our teams, and find creative solutions at unprecedented pace. Becoming a force for good starts with leadership.