Changing bank culture, from one driven by profits, to one that balances money-making activities with client’s interests, has been a hot topic since the financial meltdown of 2008. The roots of ‘bad’ culture, according to many commentators, run deep; so deep that it could take a generation to change. But do the recent remarks of UBS’s CEO – where he states that risk taking and mistakes are acceptable, as long as they are honest ones – suggest that banks are really ready to change?
Many banks have already introduced extensive ethics and compliance training. And, whilst a good start, it continues to place the blame on an individual employee, rather than recognizing the responsibilities of senior managers. Culture is about behaviour, specifically the behaviour of the organisation’s top executives, and it is this behaviour that cascades down and becomes ingrained in everything the company does.
Senior Managers Regime
To address this and restore accountability, the UK will adopt the Senior Managers Regime that will hold top individuals more accountable; they will be assessed, monitored and reviewed like never before. It is with this in mind that the UBS CEO made his remarks – he is telling his executives that, while there will be a greater onus of responsible, they should not fear it – by better understanding the company’s risk profile, innovation and prosperity can still be driven within this framework. And he is right, people do need to achieve success, and in so doing the new culture that delivered it will thrive.
Why wait a generation?
While some challenger banks may have ‘adopted’ senior managers from their parent group (think Sabbadel/TSB spinning out of Lloyds), many have the opportunity to start anew. They must, however, resist the temptation to simply hire experienced managers from established banks that will likely bring with them ‘old’ habits. The quest for experience needs to be balanced with people who can offer new ideas, embrace change and accept compensation that reflects integrity-led behaviour.
Finding these exceptional people, the right-minded people with the desire to adapt to the new regime, is the real trick. EM Group is more than just a high-level executive recruiter. Our dedicated challenger bank team understands the industry, its evolving nature and, of course, its senior people. And we are committed to building trusted client partnerships for the long-term.