Ten chairs: how to change the bank

I was in the middle of a conversation about how to change the bank, when we started talking about the boardroom issue. As many of you will know, I often reference the fact that, according to research, over nine out of ten bank boardroom members have never had a job in technology. How can you convert to a digital bank if you have no digital people leading the change?

The issue is greater than this however. If you are working in a large bank, imagine that the leadership team has ten chairs. The ten chairs are filled by a variety of people who have gotten there by being good at their role. The CEO is a banker; the COO is a banking operations person; the CMO is a banking marketing person; the CFO is a banking financial person; the CRO is a banking risk person; and so on.

They are all banking people. They got to their chair by being a good person doing what banking has always done. Their chair was given to them for loyal service, doing what they have always done. Their chair will only be vacated if they leave, die or retire. There is no other way someone gets their chair. And if their chair does become vacant, then the CEO will only replace them with someone else who has been with the bank all their life and is the most similar to the person vacating their chair. In other words, another banker.

So, how do you get the digital people into the bank boardroom? How can you convert the bank to be a digital bank if all the leadership team are bankers, who have never had a job in digital or digitalisation?

That’s a tough call.

After all, there is no one in the leadership team who would vote to give up their role to hire a digital leader. They got to their chair after years of doing the job they have always done, and they are not going to stop doing it now.

This is why so many banking people are talking digital but not doing digital. They are banking people, and have always been in banking. They are not technology people who understand technology.

This is a core conflict in most banks: the fact that they are led by bankers. If you are in a bank that is led by only bankers, how will you ever become a digital bank? A digital bank is half digital and half bank. How can you ever become a digital bank if you only have bankers leading and changing the bank? How can you ever become a digital bank if you only have leaders who understand banking?

I guess this is why there are so few banks that I can point to who are truly converting to be digital banks. The few that I talk about – BBVA, DBS, JP Morgan Chase – have people at the helm of those banks who truly understand technology and digitalisation. It does not have to be the case that they are people who have been working all the time in technology – Jamie Dimon is not an IT guy – but they do truly show an understanding of how technology is changing the bank.

That is why these few, selected banks, show and demonstrate major change with technology and have technology people in the leadership team. Those ten chairs have been restructured with intent to ensure that two, three, four or five of those chairs are filled by people immersed in digitalisation.

How many of your leadership team’s chairs are filled by people immersed in technology? Are your leadership team’s chairs filled with people from the bank or from a digital bank? Take a close look at your leaders. Question their competency. Change the bank. Or leave the bank.