6 minute read 17 Mar 2023
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Three ways to unleash the power of people in banking transformation

Jan Bellens

EY Global Banking & Capital Markets Sector Leader

Passionate leader on innovation in financial services, especially in emerging markets. Global citizen. Keen traveler.

Katherine Savage

Partner, People Advisory Services, Ernst & Young LLP; EY EMEIA Reward Sustainability Advisor

Passionate reward and talent leader. Helps drive sustainable remuneration and effectively navigate the future of work. Enjoys time in Cornwall with her husband and son, fresh air, seafood, surfing.

6 minute read 17 Mar 2023

Banks need to adopt a fail-fast culture, actively engage employees and diversify employee backgrounds and skillsets.

In brief

  • Executives can promote a fail-fast culture by opening up about mistakes.
  • An unclear vision is the most frequent cause of transformation failure.
  • “Teams of teams” create much-needed diversity, but are prone to underwhelm.

Transformation is derailed by many factors, but a lack of focus on the people that set the strategy, carry it out and keep it going is the common denominator of failure. EY research has found that businesses that put humans at the center of transformation are 2.6 times more likely to succeed. Many banks acknowledge the importance of people but are unsure how to respond.  

In this article, the second in our banking transformation series, we outline three ways banks can position their people to deliver. This follows the first article in the series: Five ways to commit to customer centricity in banking transformation

1. Foster a fail-fast culture

Keeping pace with rapidly changing customer expectations and competitors’ innovations requires banks to not just transform, but also to do it at speed. This has led to many banks adopting agile techniques in their transformation programs whereby work is conducted in sprint cycles. This involves building and piloting minimum viable products (MVPs) and refining them based on customer input. It may sound counterintuitive, but making mistakes is an important part of this process and is necessary to outpace rivals. The capacity to fail fast, learn from mistakes and shift to new solutions prevents a bank from wasting time and resources on unproductive initiatives.

However, failing fast is not the norm. Just 43% of executives say they make it clear to employees that failed experimentations will not negatively affect their career or compensation. It is easy to understand why: regulation has established controls within banks that are designed to prevent failure. Making mistakes goes against not just the culture but also the very governance system of most banks.

In this context, how can leaders create an organizational culture that balances effective risk management practices and the concepts of fast failure?

First, define what “fast failure” means within a bank’s risk culture. Within those defined limits, it typically means testing ideas, often with customers, to detect risks of failure early and learning from these findings to improve the end result. Considered this way, the concept of fast failure is in fact a vital risk-mitigating technique. When employees and executives understand that failing fast is encouraged, they are more likely to push the boundaries that lead to innovative results, safe in the knowledge that mistakes will help to manage the bank’s exposure to risk, instead of creating catastrophic consequences for them or for the business.

With an intentional design, incentives can encourage agile and experimental behaviors. Whatever leadership says, teams will be discouraged from taking bold risks if others that work on failing transformations are subsequently overlooked when it comes to promotion and compensation. Rewarding transformation teams on the balance of behaviors and ways of working, in addition to end results, can be a helpful way of encouraging experimentation within transformational programs.

Leaders are challenged with finding a balance between encouraging a fail-fast approach with ensuring effective risk management practices as established by regulation.

2. Co-create and continuously articulate a transformation vision to boost employee engagement

Ultimately, transformation happens because of employees. But, they are often understandably focused on their day jobs. They may be aware of transformation initiatives but feel detached from the process and not emotionally invested in the vision. Indeed, according to transformation leaders, the most frequently cited cause of unsuccessful transformation is an unclear vision. And less than half of employee respondents (41%) say they understand and believe in their organization’s transformation vision and strategy.1

This needs to change. Transformation will only succeed if employees are fully aware of the strategy, believe it will materialize and are willing and empowered to help to implement it. Maximum success can be achieved when the purpose of individuals and the organization align.

The first step to achieving this is for senior leadership to communicate a clear transformation vision, articulating why it is important, what it entails and the role of employees in its success. This will help to build belief in the transformation goals across the organization and inspire teams to participate.

A transformation vision that is documented in a few presentation slides and only accessible to a limited circle of executives is insufficient. Instead, banks must relentlessly communicate the bank’s transformation vision to the entire employee base through a range of channels, including in-person, online, and even through immersive platforms like the metaverse. Innovative branding gives transformation roles prestige, which can excite employees to participate. 

Executives can also maximize employee engagement in transformational programs by encouraging employees to co-create the change. This could be formalized through crowdsourcing initiatives such as hackathons, which create an environment where employees can offer ideas that accelerate existing projects or inspire new ones. Many banks already do this to some extent, and involving senior leadership in these initiatives is critical.  

Gamification can help encourage participation and bring hackathons to life. For example, senior executives could serve as judges, unlocking incubator funding for winning initiatives. Employees that make meaningful contributions could be celebrated in company-wide communications and awarded prizes such as dinner with the CEO.

All of these initiatives must be underpinned by empathetic leadership that cultivates a “we and not me” culture. To avoid dictating transformation from the top down, leaders should encourage a two-way dialogue between executives and employees to ensure that everyone feels included in organizational change. An environment of psychological safety must be created in which fast failure is accepted, not punished, empowering individuals and teams to experiment. This approach is especially likely to appeal to newer entrants to the workplace, who tend to respond positively to an open and considerate working culture that values their participation.

3. Design for diverse viewpoints

Successful transformation requires a diverse range of perspectives. There are two aspects to this: diversity dimensions, such as gender, ethnicity, age, sexual orientation, social mobility and ability (among others); and employees’ competencies and skillsets.

Cross-functional teams-of-teams that bring together multiple competencies to solve problems and deliver specific transformation outcomes can promote diversity of thought. These teams should include employees from multiple functions, including technology, control functions and the business, and also provide balance with respect to diversity dimensions.

Leaders of these teams must adopt various techniques to ensure that diverse voices are heard and acted on. For example:

  • They could evoke perspectives from quieter members of the team and make efforts to control dominant personalities.
  • They can invite those attending meetings virtually to contribute first to nurture their contributions and reduce in-person bias.
  • They can be mindful of scheduling calls at mutually convenient times for team members operating in different locations.
  • They can send material ahead of meetings to help non-native English speakers absorb content.
  • They can instill governance protocols that define decision-making rights to protect a consultative approach.

Many banks have established teams-of-teams, but often find them ineffective. This is partly because employees see them as a distraction from their day jobs. Leaders can address this by giving teams-of-teams “protected time” so that team members can focus on transformation initiatives without it detracting from their primary roles. Individuals could also be seconded to a team-of-teams for a defined period of time, enabling them to spend the time that is necessary to experiment, build new skills and expand their professional network.

Teams-of-teams should also be given some license to co-design their own ways of working, including allocating roles and decision-making rights. They could also determine how frequently they interact and establish a preference for in-person or virtual meetings based on the collective needs of the team. Rules of engagement could also be set across the team, such as taking everyone’s opinion into account and not blaming individuals for mistakes.

Here are some questions for banks as they perfect the human aspects of transformation:

  1. Does our organizational culture support agile transformation and fail-fast principles?
  2. How do we incentivize meaningful employee participation in transformation?
  3. How do we ensure that our transformation vision resonates with the people it is designed to benefit?
  4. Are our teams-of-teams designed for success? How can we help them perform more effectively?
  5. How can we balance incentives to reward both agile ways of working and successful transformational outcomes?


The lack of focus on the people experience may be one of the primary causes for failed transformations. Promoting a fail-fast culture, articulating a clear vision and continuously and actively engaging employees on the execution of this vision, and adopting techniques to bring in diverse skillets and perspectives, will be key in unleashing the people potential. 

About this article

Jan Bellens

EY Global Banking & Capital Markets Sector Leader

Passionate leader on innovation in financial services, especially in emerging markets. Global citizen. Keen traveler.

Katherine Savage

Partner, People Advisory Services, Ernst & Young LLP; EY EMEIA Reward Sustainability Advisor

Passionate reward and talent leader. Helps drive sustainable remuneration and effectively navigate the future of work. Enjoys time in Cornwall with her husband and son, fresh air, seafood, surfing.