Why we need to revisit bank culture post-crisis, again

Firms active in the capital markets need to take a long look at their staff morale and how that will impact the public perception of their firm in the long-term, writes Virginie O’Shea, post-trade FinTech analyst and advisor.

If there’s one thing a crisis does effectively, it’s to throw a spotlight on all the industry’s operational cracks and weaknesses. The 2008 financial crisis drew public attention to the gaps in firms’ counterparty risk assessment frameworks among many other things. It also effectively highlighted the excessive risk taking within certain segments of the market, thus tarring the whole industry with the same brush and making bankers less popular than used car salesmen for a period of time.

On a practical level, this current crisis is highlighting how challenging business continuity can be within a remote working environment but it’s also exposing some recurring problems related to bank culture. With news stories highlighting that some bank staff are feeling pressured to return to their offices, even if bank execs refute that direct requests have been made to do so, once again the banking industry is in the spotlight for the wrong reasons. The stories of executives continuing to receive large bonuses while swathes of staff are laid off or furloughed is also a significant reputational hit, and rightly so.

The film industry has certainly done no favours for banking, especially Wall Street, over the years, with “greed is good” as the motto of the eponymous ‘80s film and the various nefarious behaviours demonstrated in the Wolf of Wall Street. By appearing to pressure staff to put their lives at risk rather than allowing and enabling them to work from home if such arrangements are possible, banks are once again the villains of the piece. By failing to curb bonuses or executive pay-outs when the vast majority of people across the globe are facing financial hardship in the market downturn, banks are likely to exacerbate an already negative public view of their operations.

Given the current crisis and the pressure everyone is under, executives of firms active in the capital markets need to take a long look at their staff morale and how that will impact the public perception of their firm in the long-term. There’s a lot of industry chatter about financial wellness, but actual physical and mental wellbeing of every member of staff is equally, if not more, important. Employee productivity and performance is likely to be much better if individuals are able to work in conditions that are safe and flexible enough to support working from home.

That kind of flexibility includes investment in communication tools, connectivity, internal infrastructure and training and support for staff in using these tools effectively. Firms that actually focus on transforming their technology and operations to support this new reality in the short-term will also benefit from these foundations in the longer term.

The current industry investment focus on environmental, social, and governance (ESG) factors reflects the changing priorities of the current and next generation of investors, and it also signals that the incoming workforce is less likely to be attracted to firms stuck in the veritable dark ages when it comes to the treatment of their workforce. It is not only the staff of today that require these changes – investment in supporting remote working and in operational infrastructure overall could make a significant difference in attracting the next generation of skilled workers to your firm.

Remote working support and greater communication infrastructure investment is likely to attract a greater pool of talent to your firm. By moving away from a culture of presenteeism and strict communication hierarchy in which innovation is potentially stifled as only a small number of voices are effectively heard, firms could become nimbler and faster to respond to market requirements or technology change. A different way of working could also attract a more diverse community of applicants also – including parents coming back to work after time caring for young children. Greater diversity allows executive teams to operate more effectively – a wider range of viewpoints allows for better planning and creativity when it comes to new products and services.

Don’t let this crisis turn your firm into the bad guy. Your people and technology are your business – invest in them.