"Just because we're changing our tactic does not mean we got it wrong. It means we're being responsive.” - John Janclaes
Fear of change is a powerful force that sometimes pulls teams apart, but it doesn’t have to. Some financial brands are harnessing fear and using it for positive progress that helps them succeed in the financial marketplace. The secret lies in collaboration.
James Robert Lay recently sat down with Renee Newman, Industry Advisory Board Member and John Janclaes, CUSO President, both of Nymbus, a banking solution and digital financial transformation company.
The Key Elements of Collaboration
Collaboration has two key elements that play a role in the financial industry: internal collaboration and external collaboration.
To get the most out of collaboration, it’s vital to go ALL in on them:
As CUSO President at Nymbus, John Janclaes recently went on a listening tour. He visited his credit unions in 15 cities and met with 50 different leadership teams to hear their strategies and goals. He asked questions about things like their challenges, their main drivers, risk management, and handling COVID-19.
When it comes asking questions about what’s going on, it's important to identify the problems and really "lean into" them. Internally, when systems aren’t operating optimally, it’s an opportunity to get to the bottom of persistent problems and finally start to solve them.
Thorny Issues for Financial Brands
For financial brands, thorny issues are the kinds of things that keep leaders up at night. They’re the roadblocks and challenges that hurt.
One issue, for example, is the compression on earnings that’s happening in the marketplace. There’s competition on every line item on income statements, which puts pressure on companies and leads to discussions about financial stability.
Another thorny issue exists in the realm of technology. There’s a pressing need for modernization and tech replacement that’s not going away. Financial brands are competing to stay relevant and up-to-date in a tech-infused world that’s always changing.
Finally, there’s the thorny issue of speed. Innovation by its very nature creates a time pressure that’s felt intensely in financial brands that are trying to grow and change.
How can we do it faster?
How can we keep up?
This question seems to permeate every conversation about innovation and future strategy.
CUSOS and Keeping the Focus on the Consumer
In dealing with all of the challenges enumerated above, it’s also important to keep the focus of a financial brand’s efforts where it belongs: on the consumer.
When asking questions like, “What are we trying to accomplish?” and “What’s our purpose?” the customer should always be at the core of any answer.
It’s also important to remember that employees are a type of customer that shouldn’t be ignored. Employees help create memorable brand moments where consumers are surprised and delighted. Employees should always be part of the customer conversation because if nothing else, they’re usually closest to the consumer.
A Credit Union Service Organization (CUSO) provides an opportunity for a credit union to use its superpower of collaboration.
What are the CUSOs of the future going to look like? What is their mission and how is their technical delivery? How will they collaborate?
This relates to the concept of an investment portfolio and investing in fintech. It brings an enormous opportunity for collaboration.
Elevating Teams to Capture Opportunities
Partnerships and collaborations offer opportunities to see things you didn’t see before. They expand thinking and open up new strategic options that weren’t available in the past.
Before the pandemic, Renee says, there was a notion in the marketplace that fintech was evil. It was coming to take over and ruin banking as we know it.
But the pandemic helped reshape this notion and give fintech a new and more positive reputation. Traditional institutions had to adapt or get left behind in a world that’s so online-focused. They started to have “aha!” moments where they realized what was and was not working - and fintech was largely working.
This led to a new willingness to collaborate, even when thinking competitively. Competition sometimes arises due to scarcity, when there’s no longer the same abundance and innovation is necessary.
Collaboration is sometimes a tricky idea for financial services. It’s easy to fall back into a competitive mindset and avoid collaborating with partners who seem like they might eat your lunch.
The banking industry needs its top leaders to be more open to collaboration and encourage everyone in the organization to be open to it, despite all the fears. This, of course, requires a major shift in culture that many traditional banking organizations struggle with.
Financial Stress: The Silent Epidemic
Financial stress is a silent epidemic in our country and has a known impact on physical well-being, relational well-being, and mental well-being. Financial stress causes people to lose hope, which is enormously destructive.
There’s an opportunity to alleviate financial stress through collaboration. When people receive financial guidance, they find renewed hope and see positive outcomes in the future. Financial brands can be these vital financial guides and guardians.
For example, a bank can give a customer a heads-up when they’re about to become overdrawn and automatically provide an option that prevents it. In the meantime, they can ask about the person’s financial goals and deepen the relationship. Then they can provide a positive reward for reaching their financial goals in the spirit of financial literacy.
In John’s role as CEO of Partners, he participated in a project that involved doing cash flow analyses and helping customer households understand their financial threats. For example, they could highlight a danger zone in six to eighteen months where the family might have financial difficulty.
This presented the opportunity to reach out to people in a caring and proactive way. John says they helped 80,000 households get back on their feet in difficult circumstances, which was a moving experience for him.
Collaboration Tips for Digital Transformation
When it comes to collaboration at financial companies, one of the top priorities should be to include a wide variety of voices. The more voices the better.
Another tip is to take away the fear of failing. Allow employees and teams of people to fail sometimes and see that it’s not the end of the world. Reframe failure as adaptation. Instead of saying we failed, say we learned and adapted.
Also, encourage people to tell the truth about what they’re seeing, especially when it comes to dealing with those thorny issues. Tell your teams, “If that’s the way it really is, let’s just call it that.” This goes a long way toward removing fear.
This speaks to the concept of SBI, or specific behavioral impact. If we see it and talk about it, we have a chance at changing it. We look at real things in real-time, then adjust to the way the world is.
It’s also important to accept the vulnerability that comes with change. Receiving feedback is hard and comes with unpleasant facts. There are lots of uncomfortable conversations that put people on edge. When there’s a misstep, it’s a point that leaves someone feeling vulnerable.
Top managers need to do what it takes to reassure people and help them feel secure. Show that you’re vulnerable too. Expose yourself to negative feedback, accept it, and show that you’re human and you can take harsh criticism as well as anyone else. It’s a grassroots effort to “de-risk” collaboration.
John emphasizes the need for top leaders to take a listening tour and hear what people are saying. If nothing else, schedule one hour a day for it. Plus, he says, every executive’s calendar should have two meetings with people they don’t know, who don’t work in their discipline, and who can teach them completely new and different things.
Renee suggests creating an innovation conversation that involves collaboration. Ask what else you could be doing that’s outside your lane and imagine what big things could happen if you just changed a few small things you’ve always done.
This article was originally published on January 14, 2022. All content © 2023 by Digital Growth Institute and may not be reproduced by any means without permission.