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Redefining Purpose, five reasons why senior banking executives can't overcome the digital age challe

  • Lack of Knowledge
  • Lack of Experience
  • Strategies without purpose
  • Ignoring the new customer-centric reality 
  • A disconnect with a new generation of talent

 (Connect with the author, Frederic de Melker:

Retail bankers are middlemen.  The industry was the only gateway to the global financial system for individuals and corporates for centuries.  Now, technology provoked a drastic change in the banks' monopolistic status.  The digital wave has repositioned traditional banks into ancient fortresses with wide-open gates.   Today, banking customers, self-taught to new digital and mobile behaviours, force the financial industry to disrupt.  After centuries of power and bank-centricity, the tables have turned.

 A must-read Forbes article by Ron Shevlin, Cornerstone Advisors, describes the irony of today's situation.  Banks claim a swift implementation of their transformation strategies.  Even for half-executed projects, they report significant profitability improvement or cost reduction.  While bankers blame their legacy systems, seventy per cent of financial institutions don't plan to replace their core systems as part of their digital strategy". 

 Senior leadership teams want to deal with the situation with quick fixes.  They listen to what they want to hear and love the buzzwords.  They don't see or don't want to know the gravity of the situation.  They live in the status quo and desire to move back to the order of the day.  Inevitably, this behaviour will jeopardize their future and, for many, their reason for existence.

 The question is, why are senior leaders burying their heads in the sand?  Why do they ignore that the digital revolution is driving a shift from bank-centricity to customer-centricity?  It is such a fundamental change that there is no way back!  


Wisdom comes with age, or not?

A new analysis by Korn Ferry provides us with the average age of the leadership team level in the financial industry, which is 56.   It is not surprising that CEOs are, with 60 on average, the most senior in age.   

 Today's executives between 56 and 60 years old would have been at university in the early 1980ies. That means at least five years before launching the public internet, fifteen years before 3G networks, twenty-five years before the first iPhone and even longer before blockchain and cryptocurrency.

 Even though this highly educated generation of leaders, time created an enormous knowledge gap between the concepts they learned at university and today's reality.  This gap lacuna affects decision-making and is probably responsible for lagging banks. 

 In March 2021, MIT Sloan Management Review published the article 'Does Your C-Suite have enough digital smarts?' The research showed that large organizations with digitally mature leadership teams outperformed their peers by more than 48% based on revenue growth and valuation.  Unfortunately, only 12% of leaders are digitally savvy in the financial and insurance industry.  

 But the situation is not as depressing as it looks.   Leaders, curious to understand the new digital component of their strategic plans, can become digital savvy.  But that takes some academic work.  Top universities and business schools offer modules in fintech, blockchain, digital marketing, and many other strategic aspects of the transforming financial industry.   We must revisit what we learned and add these valuable insights to our knowledge.  


 Julius Caesar:  Experience is the teacher of all things.

In normal times of evolution, experiences close the knowledge gap.  Unfortunately, the sudden impact of the untamed ocean of digital transformation leaves today's leaders with no oxygen to quickly catch a breath.  Decisions are taken based on the wrong instinct.  In a time of trial and error, concept validation and agility, experiences from the past work contra-productive.  Reading reports and visiting themed events are not going to change the dial.

 Management experience around digital transformation is still skinny.  That's why it is so essential to make evidence-based decisions.   Test and learn methodologies are crucial.

 But how can you solve for lack of experience?   I would say talk to the right people.  In 2017, I paid a visit to Silicon Valley.  Silicon Valley is teaching the world to break with groupthink.  I met senior executives from famous disrupters like Netflix, and Tesla, startup enablers like RocketSpace and venture capitalists like Andreessen Horowitz or Silicon Valley Bank.  I spoke with a dozen successful entrepreneurs to understand their thinking and acting.  As a common factor, I discovered that successful market players are purpose-driven in relationship to products, customers, and employees.


 Strategies to fix, not to succeed.

Why do financial institutions have a separate digital plan next to a global strategy?  Why do they discuss their next five years business plan in an executive meeting room and the digital agenda in a lab?   A successful organization has one strategy in which they integrate and align every specific element. 

 But what are current leaders fearing?  I am pretty sure it is about a potential decline in short-term results.  The misconception that digital transformation undermines the organization's P&L influences decision-making.   I agree that it is more difficult to convince a board to take a path of investment than to find the money for a crazy idea from investors.  

 CEOs who sail their ships safely through the storm must show courage, technique, and determination.   It is about redefining relevance for the organization.   Strong organizations manage the short-term to survive in the long run by focusing on purpose and not the quick fix.

 A great article by Accenture, 'Purpose-driven Banking', explains that adopting a purpose-driven approach unlocks the total value of investments in digital transformation, relatively doubling the revenue growth of market peers.  Unfortunately, their research shows that most banks ignore this path.  Most institutions compare themselves with like-minded competitors, so they don't see the wide-scale disruption in their industry.  Consequently, they pursue a strategy of quick reward.  Board members suffer from the same flaw.  Their focus on delivering shareholders' return prevents management teams from embarking on an arduous journey of radical change.  As long as there is no explicit mandate from the regulator, those companies decide to sit on the bench, while inaction is not an option.


 Customer relations, old wine in new bottles   

So, most banks started an unprepared and unvalidated digital journey.  It quickly became an expensive struggle for the majority, pushing offline concepts and legacy processes into digital applications.  They created a digital circus, confusing customers rather than a customer-centric framework concentrating on hyper-personalization and digital delivery. 

 While traditional bankers still operate in terms of personalized marketing and communication, customer ecosystems have evolved.   Purpose-driven hyper-personalization means that financial institutions produce unique products and services that fit the need of one individual.  

 I predict that ten years from now, banks will exclusively focus on the flexibility of their product sets with instant delivery through platform aggregators.  Risk scoring and approval will be on the spot.  With fully outsourced distribution, human interaction will be reduced to complex product advice or mandated through a regulatory framework.  Till then, we will see a lot of Banking-as-a-Service and Open Banking platforms emerge.   Banks should embrace those initiatives and learn how to bring new relevance to their services and relationships. 


Talent in a force-fitted culture

The reduction of customer-facing teams will compensate for hiring fresh talent that can conceptualize, validate, and deliver the new purpose-driven customer-centric ecosystems.  But that is easier said than done.  Banks face severe problems in hiring and retaining young talent.  Despite the many efforts for cultural change, institutions are stuck in old frameworks of dominating top-down management styles with bottom-up feedback attempts.  The above-mentioned MITSloan article argues that digitally savvy top teams lead differently.  They focus on a coach and communicate leadership instead of command and control. 

 The Gallup Report, 'How Millennials Want to Work and Live', describes what millennials expect from their employer.  Although income stability and fairness are essential, it is more about meaning than paychecks.  Young professionals want to be part of brands with a purpose and a vision.  The internal culture should reflect that common goal.   Millennials don't want to be managed but coached.   They want ongoing conversations instead of annual appraisal reviews.  Young talent wants to develop strengths rather than fix weaknesses.  Jobs are part of a lifestyle rather than a nine-to-five obligation.

 For most organizations, these demands are at odds with the current organizational culture in which control is still the backbone of corporate life.   Cultural change doesn't start with a company-wide project with bells and whistles.  It begins with re-educating top team members to lead differently.




'Purpose' evaluation is the most crucial component of a successful digital transformation.  It must be redefined on every level of an organization, product, customer relationship and employee well-being.   Companies that took a profound step in that direction feel the benefit in tangible and non-tangible aspects of their business.  Non-believers are a product of groupthink and the status quo.  We must cure ourselves from the 'we are doing well syndrome' and become real 'Intrapreneurs' to bring back purpose, sustainable growth, and success.



Must Read and References


  1. Ron Shevlin, 'The End Of Digital Transformation in Banking', Forbes, Observations from the Fintech Shark Tank, Jan 10, 2022.


  1. Ron Shevlin, 'The End Of Digital Transformation in Banking', Cornerstone Advisors, 2022,


  1. Korn Ferry, 'The 2019 Korn Ferry analysis of age and tenure of members of the C-suite (CEO, CFO, CIO/CTO, CMO, CHRO) at the 1,000 largest U.S. companies by revenue'.


  1. Peter Weill, Stephany L. Woerner, and Amar M. Shah, 'Does Your C-Suite Have Enough Digital Smarts?, MIT Sloan Management Review, Spring 2021 Issue, Mar 03, 2021.


  1. Kim Kim Oon, Alan Mcintyre and Edwin Van der Ouderaa, 'Purpose: Driving powerful transformation for banks',  Accenture, 'Purpose-Driven Banking, the path to powerful digital transformation', May 5, 2021.


  1. Jim Clifton, 'How Millennials Want to Work and Live, Purpose • Development • Coach • Ongoing Conversations • Strengths • Life, The Six Big Changes Leaders Have To Make.' Gallup Inc, 2016.


  1. Rene Buest, 'Digitization: It's an Evolution and not a Transformation.' Apr 05, 2018,





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Frederic De Melker

Frederic De Melker

C-Suite Senior Executive, Advisor & Entrepreneur


Member since

12 Jun 2017



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