Recent news of JP Morgan Chase’s $2 billion trading disaster provided yet another nail in the coffin of the banking industry’s reputation. For many, the negligence is eye opening, but not because it’s unexpected. It’s simply hard to believe that yet another industry giant allowed greed to stand in the way of sound business practices. Unfortunately, this behavior has become business as usual in the financial services industry.
After all, this is the same industry that contributed heavily to the 2007 financial collapse and then gave out huge bonuses as the government bailed out the biggest culprits. And it’s the same industry in which some companies admitted to betting against their own customers in order to make a buck. By and large the big names in banking have lost any concept of what service really looks like, and that loss has created a culture that just isn’t sustainable.
Service is taking action to create value for someone else. In some banks, though, the focus has become taking action to create value for oneself. The prevailing mindset seems to be, ‘As long as our share prices go up and we get big bonuses then we’re a good bank.’ But that forgets the whole purpose of banking.
There was a time when the banking industry was committed to a purpose higher than big profits. Bankers used to be committed to building their communities. They were driven by a great sense of integrity. The industry used to be about financial service. Instead of focusing only on bonuses and stock prices, there was a concern for the people and businesses they served. Today there is an overall loss of respect and distrust of those in banking, and it has developed, in part, because of the industry’s move away from uplifting service.
The banking industry has suffered a moral disaster. It has lost its way and it won’t be back on track until there is a shift in the culture. Clearly, a sole focus on the pursuit of profits is not sustainable. There is a crisis of mistrust towards the banking industry today, and I think this lack of trust breeds only more corruption within these infected cultures. Until banks return to the fundamentals of service, these kinds of disasters will continue to occur, and, unfortunately, we’ll all suffer for it.
It’s time for the financial industry to make service a priority again.
1. Start at the top. Leaders in the industry must restate their purpose. They must make it clear to employees at every level that a “make money at all costs” attitude will no longer be accepted. These leaders must put forth in clear language that it’s time to create value through service to their customers, not themselves.
Leaders must role model the service they want to see from employees. Jamie Dimon’s accepting the resignation of his chief investment officer is a step in the right direction. Once you have a leader like Dimon or a CEO of another big bank say, ‘Our purpose is to help our customers succeed. Our purpose is to help companies serve their customers. Our purpose is to help build our communities,’ then you begin to make service your biggest priority again. Employees at the company will see that and they will start to make the transition as well.
2. Recruit the right minds. The banking industry doesn’t attract only greedy people. There are folks out there who understand what financial service means, who want to be a part of community development, who want to help build businesses and put people in homes. The industry should strive to recruit employees who have a vision greater than making money.
Each new hire either makes your culture stronger or makes your challenge to build a great service culture a little harder. The right people pull naturally in the right direction. As we’ve learned following the financial crisis, it takes the greed of only a few to bring down an entire industry. Every new hire sends a message to everyone else. Either you are committed to your service culture and hire good people to prove it, or your commitment is shallow lip service only, and your next hire also proves it. It’s time for those in the banking industry to start recruiting based on the service they want to provide.
3. Provide fundamental service education. Unfortunately, many in today’s workforce go through college, graduate school, or technical training and then spend years in their profession without ever really learning how to serve others. Few people can define for you what service is. Sure, they might take part in some perfunctory customer service training. But they’re never really educated in service. Real service education means that people learn to think and act differently in service so that their actions always create value for someone else.
Service education is more than teaching employees to follow a standardized script or deliver a routine level of service. Real service education is a foundation for creating a culture of uplifting service throughout the organization. Infusing service education into the banking culture will be a vital process in the industry’s renewal. In a business powered by service education, when those you serve are successful, then you are successful. When team members are confident that everyone is committed to this cause, they will work enthusiastically together to deliver uplifting service to each other and to their customers. This is how loyal customers are created, and the business thrives.
4. Recognize what matters. Judging by the long list of financial failures that have made headlines in recent years, months, and days, it isn’t difficult to deduce what kind of behavior is recognized and rewarded at the big banks. It’s an industry built on money and finding as many ways as possible to make money, and it would seem that these companies have made it clear that a tunnel-vision focus on making profits is considered good business.
If making money instead of providing service is recognized and rewarded at the banks, then that is exactly the behavior that you’ll get. What if instead these companies recognized those who really facilitated and enabled quality service? For example, rather than reward a broker who came up with a way to unload the company’s bad investments on some other company, what if you rewarded one who came up with an investment program to help veterans start their own small businesses, or a more equitable system for young people to get started in life while responsibly paying down their student loans? When you recognize those actions, the company becomes driven by service. In the end, that provides a much stronger foundation for long-term success than the ruthless pursuit of money.
5. Take a renewed look at your vision. During the big money days of the housing bubble, it was perfectly acceptable for a company’s vision to be focused solely on making money. But when that vision nearly collapsed the economy, everything should have changed.
Companies need to take a renewed look at their service visions. They need to unite around a cause that is much bigger than making money. We’ve seen that visions based solely on huge profits do not create sustainable companies. Eventually, in the name of making money, someone will get too greedy, someone will make a mistake, and everything can come crashing down. Companies that take the time to define, refine, and craft an engaging vision based on service can arrive at a greater understanding of their value, their customers, and themselves.
6. Learn from uplifting service companies. Critics will say that a banking industry based on service simply can’t work. The industry’s purpose is finding and making big money, and any company that moves away from that won’t last long. On some level, every business is about making money. But there are plenty of businesses that have decided to make those they serve their core purpose. And they’ve become quite successful because of it. The banking industry would do well to take a look at some of the best service companies—like Zappos, like Apple, like L.L. Bean—that have made a commitment to their customers and have achieved sustained success because of it. The banking industry needs to develop focused service providers who seek to understand: How do other leaders create uplifting service experiences for their customers and colleagues? What can we learn, then adapt, adopt, and apply to improve the service we deliver to our customers and to each other?
7. Allow more oversight. There’s been a clear lack of oversight within the financial industry in recent years. It’s time for the industry to once again open its doors to the criticism and feedback that can make it better. The banks need to hear from their customers what they really want. I think a lot of them just assume, ‘Our customers want us to make them a bunch of money.’ I’m sure that’s true on some level. But they also want stability. They want to be in business with people they can trust. They certainly don’t want to be working with people who will bet against them for their own profit. It’s time for these companies to listen to their customers and be responsible to their communities. They also need to listen to their harshest critics—those outside financial experts, policy makers, and even protesters who are demanding more from them.
An all-consuming drive to make money has not fortified the banking industry. But a renewed focus on service can. It’s time for those in banking to remember what financial service really means. It’s time to move from a focus on making money at all costs to providing great service at all costs. Uplifting service is a much wiser investment in the future.
Watch this recent TV interview with Mary Nelson on the Financial Crisis on the Morning Blend – https://www.youtube.com/watch?v=5EIH2GpIfKw