As new regulations and slim profit margins challenge the banking industry, the skills and backgrounds of the employees who work in banking must change as well. Bank Director asked legal experts to address the question of how the talent needs of the industry will shift in the next five years.
How will the banking industry’s personnel needs—including executives within the C-suite—change over the next five years?
While banks will continue to rely on service providers for efficiencies, expect a premium to be placed on those middle managers who can negotiate and manage third-party relationships. Encouraged by the regulators, banks have become increasingly attuned to the risk management burdens of outsourcing, particularly with regard to consumer-facing services and information technology. In the bank C-suite, expect to see continued strong demand for those with risk management, compliance, technology, information security and credit risk backgrounds.
—Cliff Stanford, counsel, Alston & Bird LLP
In recent years, we have already seen the need for dedicated Bank Secrecy Act/Anti-Money Laundering compliance officers and Community Reinvestment Act officers. In the information technology area, there will be a need for a chief information officer and possibly a separate chief information security officer. Both the C-Suite and the boardroom will also have a need for individuals with extensive, detailed regulatory and compliance experience to assist with policymaking and strategic planning, especially to keep the compliance burden cost effective.
—Keith Fisher, Ballard Spahr LLP
More bank consolidation is expected in the next five years, so executives in the C-suite need to be prepared to be leaders of change. Along with the board, they need to create and implement a vision that reflects the bank’s brand and corporate culture. Recently, some banks have created a position of chief culture officer that reports directly to the CEO. That position involves much more than simply training the new people on how your systems work. Rather, the focus is on moving the bank forward as one family with one voice and one mission, and overcoming the natural tendency for an “us versus them” culture that often follows an acquisition.
—Norma Sharara, Luse Gorman Pomerenk & Schick, P.C.
The risk management expertise needed by a bank is increasingly dictated by regulatory standards. In addition, regulatory reform and legislative developments will continue to be important on both sides of the Atlantic. Thus, it will be important for banks to maintain personnel, including C-suite personnel, who can maintain relationships with regulators and other relevant policymakers, and effectively communicate with the public about the positive role of banks in the economy. Implementation of new rules and enforcement actions will continue, and therefore compliance and legal staff will continue to play key roles as new policies and systems are designed and banks respond to regulatory inquiries.
—Don Lamson, Shearman & Sterling LLP
Risk management and technology will continue to require executive oversight. Institutions that do not have C-level talent addressing such areas will be expected to add them as they grow. The bigger question is what level of committee and task force infrastructure will be needed to respond to the increasingly interdisciplinary nature of banking? We are getting to the point that bankers are unable to schedule time with customers among the jumble of committee and task force meetings. Unfortunately, I do not see a quick change to such meeting proliferation.
—Peter Weinstock, Hunton & Williams LLP