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Financial services leaders' insights on challenges to change culture PDF Print E-mail
Monday, 27 July 2015

The Financial Conduct Authority's recently published business plan for 2015/16 clearly highlighted ongoing concerns about the cultures and controls in the financial services industry, setting out its strategy to address the misalignment between incentive structures and corporate values that have led to excessive risk taking.

According to a new report from leadership development and employee engagement firms BlessingWhite and Bath Consultancy Group, 73% of senior leaders in financial services believe the new regulations will transform the way talent is rewarded and identified, moving away from a culture that allowed individuals to behave in a way that did not serve the customers' best interests.

The report is the product of in-depth interviews conducted with financial services professionals and senior individuals from 21 of the world's leading financial services organisations. The interviewees were Heads of Compliance, Audit, Customer Service, Learning and C-Suite Executives from retail and wholesale banking, financial advisory, insurance and asset management companies to gain insights from across the financial services spectrum.

The report, titled Leading in the New Regulatory World (http://impact.gpstrategies.com/LeadingRegEnvironmentResearchJune2015?r=eu), reveals fascinating insights into the opinions of senior leaders, with 30% expressing concerns that there is a lack of willingness in their organisation to learn the new skills required to meet their regulatory duties. Many also had concerns that the new regulatory environment could see the UK lose some of its key talent to less regulated geographies, highlighting the potential move of HSBC's HQ to Hong Kong as an illustrative example.

The ever-changing regulatory landscape, in the UK and internationally, has left some senior leaders feeling overwhelmed by new information and processes, and as a result "analysis paralysis" was a common theme in the interviews. This presents leaders with a challenge to clearly communicate principles about what is important and valued, with suitable incentives, rewards and training, in order to build a working culture that is flexible and responsive with employee behaviours supporting the organisation's long-term objectives.

"Reward and recognition is changing to be in line with the ‘spirit of regulation’. We work hard to reward people to find problems and resolve them instead of ignoring them." Cecilia Gejke, Executive Director, Risk Management Mizuho Bank.

Aside from the insights gained from interviewing senior financial services figures, BlessingWhite go on to give recommendations to address the key findings, including:

    •    Leaders must communicate very clear principles about what is important and valued in order to guide priorities and actions, in a constantly shifting landscape.
    •    Leaders now need to see their organisation through the lens of multiple stakeholders, including customers, employees and regulators, in order to get the right balance between profitability and prudence.
    •    Financial services leaders must take responsibility and adopt a collaborative approach in order to shift the culture and conduct of the industry.
    •    Leaders may need to focus on their employee brand and recruitment processes, in order to attract and develop the right kind of talent who will be motivated for high performance while maintaining the integrity of the organisation.
    •    Leaders must invest in education that aligns activity with a strong ‘why' to create a sense of purpose and custodianship in financial services long-term, in order to achieve sustainable change.

(Source - BlessingWhite and Bath Consultancy Group Press Release)

 

 
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