The latest CEO appointments at the two big Swiss banks show that the dominant ego-centric streak is making way for other character traits. Oliver Berger discusses the new trend in an essay for finews.first.
This article is published on finews.first, a forum for authors specialized in economic and financial topics.
Five years ago, I predicted that by 2020 we would see the first chief executive officers in larger banks who had made a career as chief information officers (CIOs). This prediction hasn’t (entirely) been born our by facts.
CIOs failed in recent years to define their roles more broadly and public-oriented and to ascend to the group executive committee. At the same time, the world has moved on over the past five years and therefore I've adjusted my prediction slightly. I’m still convinced that more technological expertise would be a plus for most executive boards – and for the boards of directors for that matter – but the conclusion «from CIO to CEO» is slightly too broad-brush.
Of course, the whole world is talking about digital banking. But the top management of most financial-services firms is still being recruited from the classic banking environment. In other words: bankers keep to themselves.
«Swiss giant UBS has opted for an external CEO who comes with a huge amount of early praise»
Still, the egos of CEOs are increasingly taking a lesser role as they seek to be more in tune with the rest of the executive crew, which also helps them match more closely the diverse interests of all stakeholders. As a consequence, we will see fewer CEOs with strongly narcissistic traits in the future.
Ralph Hamers may be a good example. Swiss giant UBS has opted for an external CEO who comes with a huge amount of early praise for his technological and digital know-how. This is certainly a positive at first glance. After all, technology and innovation will be core aspects of every banking strategy in the new decade. This decade will be shaped by much higher transparency, the emergence of new competitors, cost and regulatory pressures and clients better prepared than ever when they come to the bank.
«He worked in a business segment that UBS doesn’t even pursue on a global scale»
On closer inspection, the recent decision by UBS about its top management may also look daring. Dutchman Hamers has spent his entire career at ING, a bank that focuses on retail banking. To be precise, he worked in a business segment that UBS doesn’t even pursue on a global scale. The Swiss bank has an entirely different culture, based on its focus on wealth management.
It would indeed be hugely surprising if Hamers succeeded in presenting the same technological and digital aspects to wealth management clients at UBS as he has so far done in retail banking. The next UBS chief will have to show pretty quickly how he intends to lead the world’s largest wealth manager into the future and gain credibility with clients and staff.
«We are looking forward to promising times at both Swiss banking giants»
The almost simultaneous announcement of a change at the top of the other big Swiss bank, Credit Suisse, appears evolutionary and much less revolutionary by contrast. Thomas Gottstein, the man who assumes the lead at Credit Suisse, is a veteran of the bank. Studies have shown that when there is no need for fundamental change, an internal CEO will deliver a much better economic performance than a CEO who joins from the outside. The necessary turnaround at Credit Suisse was initiated by Tidjane Thiam, Gottstein’s predecessor on the job.
Gottstein, who may not have a technological background as such, deserves credit for having consistently launched and successfully implemented technological initiatives at the bank together with his management team.
«The bet is on!»
We are looking forward to promising times at both Swiss banking giants, and also for the whole industry. While recent years were influenced by regulatory issues and the huge process of coming to terms with the past, the coming years will be shaped by technology and by the client who expects much more from his bank.
In this new world, the CEO will play an even more crucial role, because he will need to further accelerate the necessary business transformation. A phase that will prove decisive for all banks. Either they are going to be demoted to acting as mere providers of products by tech companies, or they will manage to hold their ground through innovation.
I expect the latter to come true and I'm convinced that by 2030, we will see a banking industry with protagonists who will be even bigger and more complex as they bid to tie their clients more closely and comprehensively to their bank. The bet is on!
Oliver Berger is a partner at Zurich-based Witena Leadership Advisory, a leading executive search company. He is active in Switzerland and abroad and focuses on mandates for executive and supervisory boards in financial services. Berger studied law at the University of Basel and the University of Freiburg im Breisgau, graduating with a Master’s degree. In addition, he holds a diploma in coaching and organizational consulting from Zurich University of Applied Sciences.
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