Insights & Opinions

The Banker's Oath and The New Ethos in Banking (part 1 of 2)

Mon, 18 Mar 2024

Rik Coeckelbergs Founder and CEO The Banking Scene

The Bankers Oath pt1 featured

My search for insights and input into my book led me to an interesting and in-depth interview with Eelco Dubbeling, Managing Director of The Dutch Banking Association and Chairman of the Executive Committee of The European Banking Federation. It was in fact so crammed full of insights that I decided to split the interview into 2 parts. In part 1, we dig into the importance of leadership and how The Dutch Banker's Oath impacts the culture and ethos of a bank.

My new book is titled "New Ethos in Banking - Embracing Ethics and Values for Meaningful Transformation". How would you define ethos in banking?

Let me start by sharing that it's fantastic that you're writing this book. The topic you are covering is very important and needs attention.

To me, the concept of ethos in banking is multi-faceted. It begins with your personal values and beliefs. It then extends to the company you work for, its products and services, and the culture it promotes. As a leader, you have the responsibility to foster an open culture where dialogue is encouraged, and employees are empowered to challenge their superiors if they disagree with them or have different views.

Additionally, the ethos of the banking sector as a whole is also important to consider. Initiatives such as your book and the events you organise can contribute greatly to promoting this dialogue. At the Dutch Banking Association, we focus on cultivating a positive culture within the banking sector. We use facts and figures to guide our efforts, but measuring culture is not an easy task.

One unique aspect of the Netherlands that drives culture is the banking oath, which has implications for company culture and public perception. Ethos is something that people see and experience, and we strive to ensure that our industry is characterised by a strong ethical foundation.

How do you see ethos on that personal level, and what role does strong leadership play in that respect?

As part of the Foundation for Natural Leadership, I have been organising leadership trips for a long time, where we take people into nature for a week, both in Africa and Europe, through the Foundation for Natural Leadership. This organisation has a mission to reconnect people with nature. It is my vast belief that when you connect to nature and Mother Earth, you also connect with yourself and your roots. By taking some time off to be in nature, you can reflect on yourself.

During the program in Norway, and this year in Germany, we spend time in nature, sleeping and eating outside, leaving behind our phones, wallets and other belongings. We explore and share our origins and connect with our inner selves and inner child. Midway through the week, attendees experience a 36-hour solo where they are completely alone and immersed in nature. That is where you truly connect with your own values and reflect on your life.

Three years ago, I had an idea to create a Sustainable Leadership Trail for bankers, a three-month program aimed at helping individuals reflect on their personal and professional lives and how sustainability plays a role in both. When I had this idea, I added it to the Dutch Banking Association’s board agenda to seek support from the CEOs of our banks. To my surprise, there was no hesitation, and they unanimously supported the project, ensuring that people joined us. It's fantastic to see how the Dutch banking sector has changed and how aligning personally with one's values is so crucial in today's banking leadership. It's hard to imagine that I would have done this 20 years ago.

These trips allow you to connect the different levels of ethos: the personal level, your ambition and your drivers, the things you do in your company and for the sector. So, leadership plays a crucial role in finding one’s personal ethos and translating that to the professional environment.

Most people I spoke to about ethos acknowledged that the banking sector had lost its ethos somewhere with a possible climax during the Global Financial Crisis (GFC). Although a lot has changed, we still see the results of GFC. How did you experience that crisis and how did perception change towards the industry since then?

Let me start by saying that we live in a completely different situation today compared to the crisis of over 15 years ago. However, I agree that we learned valuable lessons from that experience. The perception and reputation of the sector have been greatly impacted by that crisis and building on the lessons learned, also changed significantly since then.

I recall starting my career in a bank where the focus was on globalisation and consolidation, with a leadership that lived a vision that only a few global banks would remain in the end, with a culture that was primarily centred around career and financial success.

The crisis led to a recalibration of culture, products and services. In the Netherlands, we held deep discussions on the role of banks in society. For the right reasons, we had the Maas committee, and there was the banking code and the banker’s oath. While some banks did not experience any problems, others, in particular the large banks, had to face harsh consequences and learn valuable lessons.

Recently, I asked the audience at yearly conference of Young Bankers for their motivations to start working in the banking industry. Common responses were to do something useful with their life, to contribute to society, to contribute to the sustainable transition, and to learn how to grow. These motivations are a stark contrast to when I first began my own career, where most people's answers centred around materialistic reasons like a career, a good salary, becoming a ‘vice president’, or receiving a company car and bonuses.

So, people's motivations to work in a bank have changed considerably, maybe to such an extent that one could debate, for instance, if today, the banker’s oath would still be necessary in its current form.

Interesting debate, because the banker’s oath just got implemented a month ago in Belgium.

Interesting. I remember that when we implemented the oath, we triggered a wave of other changes as well. Of course, there are consequences if bankers don’t comply, but more importantly, it was the dialogue on all levels and the different culture programs of the individual banks that made it so valuable.

With the introduction, we agreed that there was flexibility for banks to implement it in their own way, taking into consideration their unique cultures and programs, so banks were able to adapt the oath to fit their own company culture successfully.

Some would take the oath and organise workshops across all levels, including dealing with dilemmas with the CEO, for example. On the other hand, we had smaller banks where the oath would be taken in a more personal setting, sometimes even in front of clients. This is a crucial moment where one's own responsibility is considered. For instance, with the Young Bankers, we mapped out our values. A group of young people from different banks had discussions on what values are important to them. We invited people from other sectors as well to reflect on how they do their work and what ethics means to them in their work.

Obviously, the financial crisis had a significant impact on our reputation, which was also linked to the economic downturn. Many people felt it in their wallets and even lost their jobs. However, we have learned from this experience and are committed to rebuilding trust with our stakeholders. All this led to a recalibration of what ethics truly means. Nowadays, there is a whole new generation of bankers and leaders in the sector who are much more transparent and have a better balance between their emotions and rational thinking.

As I will explain in the book, the prevailing belief in the past was that by prioritising the interests of shareholders, organisations would be compelled to act in the best interest of their customers, as failure to do so would negatively affect shareholder returns. However, the past decade has shown that this theory is flawed, and that it is necessary to consider the needs of other stakeholders as well.

That is also what we concluded. If you look at our strategy and the policy plan of the banking sector and the Dutch Banking Association, you will see that our pillars are a sustainable economy, digital inclusion, but also strong banks. We believe that having strong banks is crucial for financing the economy and facilitating the transition towards a better future. Shareholders are important in that respect, and making a profit is an essential element in a bank’s long-term trajectory.

However, we also acknowledge the importance of considering all stakeholders in our decision-making process. Today, we have a more balanced approach towards all stakeholders, and banks consider it normal to take their interests into account.

Let me share 2 speaking examples in that context. The first one is of a bank that when they implemented, the bankers oath, they put a big mirror in their hallway, and everyone that took the oath had to put their name on the mirror so that every day they would look in a mirror and reflect on, and be reminded of why they did that oath.

Another example is an art project, where bankers would visit customers in their homes, and take a picture through the window, from the living room to the outside world, and have a dialogue with their customer on what they see when you look out the window, to better understand your customer on a deeper level.

(This interview continues in part 2 here where the conversation covers diversity, financial inclusion, regulation and more.)

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