Polarizing Topics Among Financial Services Leaders

Every Thanksgiving, we see a blog or a meme outlining all the polarizing conversation topics we should avoid discussing with our friends and family over dinner. And despite these warnings, every Thanksgiving, your aunt or uncle brings one of them up after one too many glasses of wine.

Well, there are several critical priorities on which financial services leaders are not in agreement. These are priorities that leaders should discuss to create unity and increase collaboration and efficiency across their organizations. However, these topics should be addressed in a board room, a conference call, or a virtual meeting…but probably not at the office Thanksgiving party. And definitely not over Thanksgiving dinner.

Here are two examples where financial services leaders disagree about their approach to the economic downturn:

• Whether to increase or decrease workforce investments during the economic slowdown: Just one-quarter of financial services leaders are confident in hiring and retaining talent in today’s market. But it appears leaders are divided on the urgency of this priority. With a potential recession looming, we asked financial services executives about the first and last investment they would cut. Thirteen percent said investments in the workforce and talent development would be the first thing they’d cut. But another 13% said it’d be the last thing they’d cut. While these percentages are not massive, this comprises over one-quarter of leaders who disagree on what seems to be an urgent priority. (See my recent blog on Three Ways to Meet Employee Demands.)

• Whether or not now is a good time to invest in new technology capabilities: Similarly, the economic slowdown has divided financial services leaders on technology investments. Six percent of leaders said investments in new technology capabilities would be the first thing they’d cut. But 13% said it’d be the last thing they’d cut. Our research shows that contextualizing the digital experience is a huge opportunity for growth. And to do that effectively, a financial institution may need to upgrade its mobile application or implement intelligent automation tools to better harness customer data. So obviously, this is a topic that affects functional leaders throughout the organization.

There are also two priorities for which business and technology leaders are not on the same page. It might make sense that there’s a divide given the different nature of their roles. But there are also some pretty big gaps that should need addressing.

• The importance of optimizing real estate or branch footprint: Nearly half – 48% of business leaders – believe optimizing real estate and branch footprint is a top priority, but just 27% of technology leaders agreed. Admittedly, this decision is for the business unit leader, the CFO, and/or the Head of Strategy. However, there are big technological implications for supporting customers and employees in remote, hybrid, or colocated environments. While it might not be the CIO’s decision, you’d think there’d be a higher percentage listing this as a top priority.

• Investment decisions on environmental, social, and governance initiatives (ESG): While 50% of business leaders said investing in ESG is an important priority, only 30% of technology leaders agreed. Most executives I speak with would agree that this is “important,” but few are making progress. We’ve outlined several different ways to win on ESG goals. And whether it’s through green investing or expanding credit access, there’s a big role for technology leaders to make sure the financial institution has the infrastructure to support these strategic initiatives. Leaders should start prioritizing this in the coming years. As my colleague Sophia Palmstedt pointed out, ESG is something the next generation of customers really cares about. 

Financial services leaders should address these disagreements, and they likely have addressed some of them in recent months as they build their 2023 strategic plans. And conversations between business and technology leaders on these topics should continue throughout 2023 and beyond. 

So let’s embrace debate. Let’s discuss these polarizing topics as a group. And let’s get feedback from others.

But if we don’t want a food fight, let’s not bring it up over Thanksgiving dinner.