While many industries have embraced innovative ideas regarding boardroom leadership, the financial services (FS) industry still has a reputation for being set in its ways.
Intriguingly, banking board members have faced what are arguably some of the most unique and daunting challenges over the past two decades.
The rise of the Internet-age has brought about major changes in how we bank as well as how we keep our accounts secure. As PwC’s most recent financial services survey explains, “Boards face a growing set of risks, opportunities, and competitive challenges from technology.
New customer-facing options, such as mobile wallets and social media, hold promise to boost revenues, while better back-office systems can improve efficiency. FinTech competitors are intruding on traditional FS space, while cybersecurity is demanding more attention.”
So how can boards at financial institutions keep up with the changing times? The focus is, of course, consistently turning towards technology. Although financial experience and risk management are the two attributes most sought after in banking board members, IT strategy and cyber risk experience have cracked the top six most desired skill sets.
This is a big shift for the financial sector, which is accustomed to hiring lifelong bankers to board roles. These days, that expertise just isn’t enough, though. FS boards must place an emphasis on expanding technology in order to have any hope of success in the field.
In addition to a focus on technology, it’s important that FS board members embrace continuing education. At the pace that the industry is moving currently, no one would be capable of keeping up with the daily changes on their own.
It’s vital that bank leaders seek out opportunities to learn from other leaders with highly specialized backgrounds. In the asset and wealthy management sector, a shockingly low percentage of board members (only 19%) sought out 16 or more hours of outside education during their most recent board term.
The role of the board member has greatly expanded, which means that the time constraints on these decision-makers have increased as well.