How to achieve change in the finance sector?

Michel Malpas is an independent director and consultant. He is an advisor to the executive board at CBP Quivest SA, where he develops the investors services business.






Is the financial sector being transformed ?

"Yes, absolutely! We are witnessing a period of regression where the situation on the markets is stagnating. In fact, the current transformations are not really a positive development, they are transformations of existing regulations. It is the regulatory framework which forces the various actors to take decisions. We see new regulations every single day, but few strategic decisions. SHAPE is a Brussels-inspired idea."


What are the challenges financial institutions have to face as a result of these permanent changes ?

"It is absolutely essential to have the necessary resources to be able to cope with these changes: manpower, technological infrastructure, a proper understanding of regulations. All this is required apart from business as usual. Thus an administrative overload, combined with greater speed and intensity, is inevitable. What’s more, there is a tough regulatory competition among member states. Countries outbid each other on every level."


So an appropriate dialogue is crucial to implement change within a financial institution. What strategy would you recommend ?

"A regulation is a lengthy process. You have to make sure that the rules are both understood and adapted. You have to create an interface between an intellectual regulation and the practical guidelines employees ought to respect. Once the procedure has been set up, its proper implementation has to be monitored. In this environment communicating by newsletters gives no sense. Communication is more rigid, military, and there are internal audits and other checks."


Why are employees often reluctant ?

"The predominant attitude seems to be : « I have done this for ten years, why should I do it differently now ? » Changes require extra work and constraints towards one’s clients. Hence you need to communicate the changes coherently to the outside."


What does the role of the managers consist in?

"They have to reach a certain level of communication and simplication; they might have to offer workshops. They have to get across the message that nothing is fixed and that there is a constant evolution. In fact, they ought to create a culture of change so that new procedures will not come as a surprise."


Do these changes have any repercussion on the identity of a company?

"Of course they do! There is less time for real business, i.e. to devote time to one’s clients. Experience shows that regulations can be a burden; they are hardly ever helpful when dealing with clients. But they have to be implemented even though they do not boost performance. There has to be a certain level of commitment and employees need to acknowledge that it is part of their job."


What about the CEO ?

"He has to be sensitive to the issue of regulations. He is in charge of monitoring. He has to display commitment and great knowledge. The CEO will also have to put the blame on employees who do not respect the norms. When dealing with stakeholders it is crucial to be well-informed if you want to convince people who are not necessarily specialised in the field.  Information is extremely important !

Even though information might be transparent, it could still be misleading or upsetting when discussed in the media. So the CEO will have to show leadership and display superior knowledge if he wants to maintain the support of the stakeholders.


Are there any good news ?

"Yes, there are. The more you manage to develop in a difficult and complex environment, the greater the merit/respect you will get in the end. Adaptability will create the difference, it will become the factor that sets you apart from others and proves your strength."