Knowledge Center: Publication
Consumer Banking, Finance, and Small Business Banking
Leading Culture Change in Banking10/25/2013 David Boehmer and Daniel Edwards
Take the path to high performance in today’s demanding new environment.
In an industry that historically has changed at a sedate pace, big banks have been altering the way they do things at dizzying speed. Facing narrow margins, tighter regulation and wary customers, they are forging new business models, transforming operational processes and re-orienting around service. At the same time, the ongoing digital and data revolution continues to bring wave after wave of change, making banks more technology-driven than ever. And in perhaps the most interesting about-face of all, financial services organizations are now taking culture change very seriously.
Talk to most bankers today and you will hear the word “culture” repeatedly. They know that strategies, operating models and organizational structures are only as durable and effective as the culture that holds them together. And they know that when you dramatically change those fundamental elements of business, you must also change the culture that underpins them.
The banking sector has been under intense scrutiny and pressure to make transformational change in recent years in the wake of the financial crisis. In 2012, Stephen Hester, then chief executive of part-nationalized Royal Bank of Scotland, called for a wholesale change in the culture of banks to refocus their behavior on meeting the needs of customers to restore trust in the industry.