4 Critical Skills Of Banking Leaders Today

The banking industry is known for constantly innovating and evolving to meet customer demands and requirements in different financial climates. In 2020, banks were forced to make years’ worth of revamps to technology and business models in a short amount of time.

Crucial skills for leadership in banking

Strong leadership in banking is crucial in these post-pandemic times as it could make or break the entire organization. Here are 4 critical skills all banking leader needs to hone to navigate today’s everchanging financial landscape.

 

Forward-thinker

 

Visionary leaders are always on the lookout for new opportunities to elevate their organizations, especially during times of crisis. Since the pandemic hit, the banking industry quickly embraced technologies such as cloud computing, wearables, and AI chatbots, to enable a frictionless digital banking experience for customers.

Shanker Ramamurthy, Global Managing Partner, Banking for IBM states that cloud computing and artificial intelligence (AI) will continue to be key tech focus areas in 2021. “For the foreseeable future, banking will operate in a hybrid, multi-cloud world. Most financial institutions are in the process of transitioning parts of their workload from their data centers into a private cloud and into multiple public clouds.“

It’s worth noting that a major part of the banking technology vision now focuses on the use of blockchain, as it has the potential to solve the drawbacks in traditional SWIFT bank transfer and the client identification system.

   

Technological literacy

 

A bank’s survival depends on how quickly it could respond to consumer needs by leveraging technology to update legacy systems and help employees adapt to working in the new normal.

Hugo Nájera Alva, Head of Business Development at BBVA Bancomer, shares that it is important for leaders to always be ahead of emerging technological trends.” Competitors are no longer financial institutions, but technology players,” he says. To get ahead of the competition, banking leaders must think outside of the portals of the finance mindset.

Digital banking has undeniably been one of the largest technological shifts in the finance industry. Banks are expected to grow digitally even more in 2021 and present the following trends:

• Personalization: Consumers want instant access to information about their finances to make informed financial decisions with the impact of the pandemic. Future financial products should be customized to their needs to drive engagement and loyalty.
• Automation: Banks will set up more autopayment features to make it easier for customers to pay bills on time and help them reach their savings goals.
• Real-time payments: The use of cash will slowly dwindle this year with the rise of contactless payments and e-wallets.

Technology is the game-changer in modern banking institutions. A keen eye on the latest trends and technologies will enable leaders to gear up for forthcoming challenges in the industry, simultaneously introduce new solutions to existing problems and revolutionize the banking experience at large.

 

Adaptability and Agility

 

Banking leaders need to adapt to current times and grow a mindset rooted in flexibility and agility. Many aspects of banking are in a state of flux— the viability of the branch bank model, future technological adoptions and changing customer demands, among others. Stepping out of tradition is vital given the rise of disruptions such as fintech start-ups, cryptocurrency and banking-as-a-service (BaaS).

According to Ramamurthy, “70% to 80% of all the bank tech spend is for middle and back-office operations. Maybe 20% is spent on the front end, what we call the customer-oriented, multi-channel ecosystem.” The banking of tomorrow will invert that ecosystem, as technology will be primarily used to service customers and their respective needs.

There will also be a focus on cybersecurity given the abundance of sensitive data collected in digital banking. Deloitte’s 2020 Digital Banking Report revealed that organizations are prioritizing investments in privacy and security solutions more than any other technology.

   

Strong Empathy and EQ

 

Banking leaders must not lose sight of the most important asset of their organizations, which is their employees. The mental health and wellbeing of employees have been brought to the forefront as the negative effects of the pandemic have taken a toll on many emotionally and physically. Immediate branch closures, shrinking revenue and preparation for a hybrid work environment are huge changes that can cause a lot of stress — potentially affecting job engagement and productivity in the long run.

A good banking leader should be able to help his employees regulate and navigate these emotional challenges. According to Gartner, 68% of organizations have already introduced at least one new wellness benefit to help improve their employees’ mental health. Additionally, banking leaders must restructure working environments to prioritize job satisfaction. For employees to deliver an effective customer experience, they should have a work culture where employee experience is given due importance.

The transformation of leadership in banking is defined by these four skills for banking leaders, and is essential to guide employees and customers into the future of banking.