Over the last five years, there has been a significant change in large organizations worldwide. This change has been driven mainly by people who have climbed and reached top management positions within large organizations.
The common factor in this change is that these people are millennials, who bring with them new skills and perspectives, as well as a different vision. All these factors, together with the use of new technological tools, can generate significant changes in various sectors; however, many people wonder if this new generation “really” has the potential to “change” the banking and financial environment.
Millennial Leaders
Millennial leaders are the generation of leaders between 30 and 42 years old. This generation grew up and matured with the perception of the most important transitions we have experienced in the technology and communication (internet and social networks) sectors. For this reason, they have a different vision, besides possessing various skills or abilities to adapt or generate changes. However, when we talk about the financial and banking field, there are many challenges that these leaders must face to make these changes.
According to Chris Skinner (in his blog, The Finanser), this new generation of leaders must face three significant factors within these organizations (which have been operating for many years based on the same infrastructure, culture, and operation mode). The first factor is living with the predecessor’s rules, norms, and culture; the second is the challenge of transformation and change, and the third is how to execute change and transformation while continuing to operate.
Live with the rules, norms, and predecessor culture
When a banking organization has been in the market for several years and has survived significant economic shocks, it generally tends to adhere more to the rules, norms, culture, and attitude that allowed it to become “stronger” at the time.
This trend means that all those workers who want to climb the ladder and occupy top management positions maintain the same approach as their predecessors. At this point, the first challenge arises for the new generation of leaders who want to climb because if they are defiant and radical to implement a change since their beginnings, they just will not be able to continue ascending.
Therefore, we can say that, to overcome this first challenge, new leaders must learn to live with their predecessors’ rules, norms, and culture to gain their trust and please their superiors, and then subtly propose their new ideas and vision.
All this means that new leaders in the banking and financial sector must initially comply with pre-established rules and adapt to their current environment (without proposing radical changes) to climb the corporate ladder and reach a position with sufficient power and influence to be able to “make” significant changes within the banking or financial entity.
Challenges with transformation and change
When a person who belongs to the new generation of leaders manages to climb, ascend, and occupy an important position within the management of a financial or banking organization, he faces the second challenge: transformation and change.
Perhaps at this point, many will think that if the person is a “senior manager,” he can initiate “without problems” the transformation and change at a structural and technological level; however, the truth is that to achieve significant changes within an organization, certain paradigms must be broken; at this point, the challenge of changing the culture and mentality of the people within the institution arises to generate the need and commitment of the people “inside” the organization to make a real technological and structural change.
All this means that once the leader has reached a prominent position in a financial or banking entity, he must start working on changing the mentality and culture of the entity’s employees so that they can “accept” the proposed changes and commit themselves to the transformation process.
How to execute changes and transformation (without ceasing to operate)
After demonstrating that technological changes and the adoption of new financial tools are necessary for the evolution of the organization, in turn, it has been possible to generate a change of paradigms and mentality, getting people to commit to change and transformation for the benefit of the organization, now comes the third challenge, which is how to execute the changes and transformation “without ceasing to operate.”
We should note that banking organizations have been characterized by operating for many years, adopting technological structures, and making them work on their old inherited platforms, which can generate some difficulty when making a complete restructuring of their central digital bases; this is one of the many challenges that the new generation of leaders in a banking or financial environment will face, especially when it comes to making a technological and structural transformation.
At this point, we can say that it may be difficult for a new leader to get rid of inherited structures without letting the organization cease to work and instead demonstrate to their customers that the organization continues to function without problems or operational failures. To understand this point, we can use the example of moving into an older home, where you may get leaky roofs, holes in the walls, broken pipes, and a faulty electrical system; in this case, there are many problems to solve, but it can be “complicated” to fix everything without visitors noticing that we are making repairs to the property.
All this means that, while the new technological platform is being implemented (either through a Fintech, internal development, etc.), the old platform must “continue to operate” to avoid harming existing clients. Subsequently, when an “operational break-even point) is reached, the old platform will be abandoned, and only the new platform will be used. However, in some cases, this will not be possible, as there will be certain old functions that cannot be without due to contractual or operational factors; in those cases, the ideal will be to maintain a “hybrid” model until it is possible to migrate to the new platform.
Will the new generation change the banking environment?
Everything will depend on how these three stages develop in each banking or financial institution. As we can see, it is one thing to want to make changes in a traditional banking institution and quite another to have the capacity to implement and execute such changes.
As we have seen, these challenges are independent of the generation since everything depends on the mentality and paradigms of the staff and management of the banking or financial environment. However, it is not enough to have “good wishes” because, in some cases, it may be difficult to generate these changes without “clashing” with the “status quo” and without affecting current customers. Therefore, the skill that will make the difference in this type of case will be the ability to interact and work as a team with people or workers of different generations, transmitting new ideas, values, and concepts efficiently and effectively.
What do you think about this topic? Do you know of any other challenges that new leaders in the sector must face in order to implement changes?
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