“While capital, financial, administrative, control, and technology issues are sporadically debated on and commented on, the new challenge of leadership in PSU banks begs a serious consideration in the intellectual arena. Apart from ownership, ethical challenges, tenure, and compensation structure, there are a host of other leadership dimensions that needs discussion and awareness.” Mrutyunjay Mahapatra Ex MD & CEO, Syndicate Bank.
The Indian banking and Finance sector is going through an exciting phase, with lot many ups and downs. It is one of the most challenging times for senior leadership. It is very challenging or rather impossible for traditional banking leadership to sail through the current disruptive competition. Today’s competitive ecosystem is driven by new-age technology, stringent regulation, and high ethical expectations. it is too dynamic and complex for traditional leaders to navigate. Today, the banking industry, just like any other industry needs futuristic Leaders, who can feel like a psychic, think of strategists, and act like pragmatic solution providers. In short, to achieve success for the institution, banking leaders do not just have to deliver but have to constantly control, and develop the employees according to compliance and market needs.
The Banking leadership job has been disrupted because of the following factors that have been discussed in the previous article
- High Competition with the Emergence of Fintech
- Low Margins because of High competitive market
- More Aware Customers
- Need for New Age Technology
- Non-Availability of dedicated competent Staff
The only way leaders can address these challenges is by transforming themselves.
Traditional leadership usually got engaged with one-down leadership only to get things done or to control or develop the stakeholders but now things have changed. In the current scenario, the CEOs need to engage with the middle management, junior management, and sometimes even with the front task force to have a piece of real-time information about the stakeholders and competitors, so these employees directly impact the decision-making at this moment, it is also crucial for organisations to retain these employees as finding a substitute is easy and comes at a very high cost.
Today’s leaders need to be futuristic and must adopt inclusive and collaborative approaches as they need to transform themselves to
- Manage the operational and risk credit events in the new supply chain which is partially invisible to them in the new business structure which involves partnerships at multiple levels.
- Set the systems and Processes for understanding, monitoring, evaluating, and utilizing the information that is intangible, like network customers’ impact vis-à-vis own customer data and impact, leveraging on partner brands, valuation & contracting, etc,
- Understand the nuances of platformisation, cloud-based services, and big data to rethink, re-position, and repurpose the actions of the institution to connect, communicate, cooperate, and collaborate with all the stakeholders. In today’s time, banks need to position themselves at multiple levels ranging from global to local to cater to the needs of diversified customers.
- Be customer-focused as well as customer
- Invest in employee development and empowerment endeavors, these initiatives prepare the employees to manage demanding situations and enhance the confidence and interest of the employees in their role and contribution. Prepare them to remain customer focused and customer-centric. In today’s era, every employee need to understand and adopt the “business of Relevance” approach and create value-based experience for each client.
- Collaborate with all the business stakeholders and also with new Fintech competitors to explore new markets, design customised products, and innovate ways to create an experience that goes beyond the expectations of the customers
Employee development and empowerment initiative has always given a positive impact on the mindset of the employees which in turn helps in improving their working ability as well as the overall performance of the organization
Conclusion: The banking leadership role is changing, he needs to
- Create such a purpose and vision for his institution that enables the enrollment of even their competitor for collaboration
- Exhibit service leadership and empower their down-below leaders to understand and be competent to face the challenges of customers and new market
- Be sensitive to the needs of the potential customers who are at the extremes of the spectrum and take up the role of a social reformer to create a financially inclusive society.
