The Greater Reset

  • By Paul Franks - SAS

The next wave of change will focus on smaller, smarter steps than ever before, with social license becoming a prime driver of opportunity in the market.

We've heard it said too many times: change is a constant. But has there ever been more truth to the idea than in 2021? As we dig into the broad changes we're seeing across regulation, culture and technology, the need to embrace a 'Great Reset' will boil down to a classic concern – authentic leadership.

Changes to regulation have been speeding up in 2021 across the region. COFI in New Zealand, RG 271 in Australia, a renewed focus on AML (though Australia has been embarrassingly slow on this front) and plenty more besides. The velocity of regulatory change is only increasing, and so our preparedness to meet not one but a wide range of regulatory outcomes must be the focus.

At the same time, work cultures are dramatically changing while ESG comes into laser focus. These cultural forces should not be underestimated – and they won't be by any serious leader. In financial services our regulatory license might be what gives us permission to open the door, but it is our social license that will matter most as to whether anyone will keep wanting to walk through it.

Off the back of COP26, ESG and climate change factors are great examples of embracing what is important and really deciding to offer products and services that facilitate the right path toward the future. As new regulations arrive alongside so much wider change, poor leaders will complain about "all this stuff we have to do." Smart firms will embrace the opportunity to make compliance a path toward rethinking the road ahead for their entire business.

This doesn't mean it's time for another round of large-scale transformation though. Big 'T' transformation is over. Little 't' transformation is where it's at. Less risk, less exposure, more iteration, more control. Change is always messy, it's just a question of how much mess you want to manage. Know what you're changing and know why you're changing it.

Don't just pivot. Pivot with purpose.

It's easy to talk about, but hard to get right. There's a lot of fatigue out there right now, and I fear that many will lose the momentum toward change that the pandemic brought about. As we shift from pandemic crisis to endemic management, we return to workplaces and slip into old habits. It can feel very comfortable to decide to ignore what needs to be done to iterate toward a better future.

But this is exactly why small transformations are the right path forward. If you're too aspirational, that fatigue will rear its head, leading to sloppy execution and failures that lead to more excuses to ignore this Great Reset and just spectate from the sidelines. History will not be kind to those who think they can move forward from here by standing still.

New players are primed and ready to challenge anyone standing still. We long thought the major banks were impenetrable – but the tide is turning. Traditional barriers for entering the banking sector have fallen, making way for new entrants. There are plenty of major and growing technology brands that have the resources to earn banking licenses and the brand trust to win customers.  

These challengers aren't just nascent startups anymore. They arrive at financial services with a running start and plenty of fans ready to climb aboard. They have their eyes on the future and know that the customers they can take from incumbents want to follow a brighter vision too. And they are native to an ecosystem of interconnected technologies, where the bank branch sits in the palm of every hand.

Platitudes without authentic sentiment collapse all too quickly in this new era where social license reigns. We need leaders who can drive these new small 't' transformations with a consistency and persistency that sets the right expectations internally and externally to the market.

So, how is your social license and are you ready for the Great Reset? Is your institution ready to respond or still contemplating action? Being ready for renewed customer expectations, increased competition, and transforming with purpose and authenticity is what will set your financial institution apart. You have the data, you can access smart technology and your processes can change. One day or day one. The choice is yours.

You can view this article in the AB+F Magazine December issue here