Listen to an earnings call from a financial services company today and you will hear the CEO describe the impact of the COVID-19 pandemic and the way it has affected everything from revenue and customer service to managing how and where work gets done. But you might also hear something else on that call — an acknowledgment of the need to create a more inclusive, sustainable, and just world and the firm’s commitment to doing its part to make it happen.
That is a profound shift, and it reflects an important new reality. Financial services companies have a unique opportunity to address major societal issues, while also nurturing new markets and generating profit. Companies can — and should — aspire to this, as it is an opportunity to not only benefit shareholders but also to collaborate with other key stakeholders.
We call it a “higher bottom line” of human-centered capitalism.
Financial institutions are in the best position to help move society in a different direction because they sit at the center of the economy. Following this path will truly set them apart because stakeholders increasingly will expect financial institutions to do the right thing — and profit while doing it.
Many firms have already started. More than 40% of participants in a March Deloitte-hosted webcast said their organizations were focused on “maintaining trust and confidence to drive economic growth and spread prosperity.”
Financial institutions that not only embrace this amplified role but also lead the way will be the ones who make a new future possible. They will have a commitment to making an indelible social impact alongside robust profits. Let me suggest a few things that organizations leading the way will do differently and better.
Financial firms that seek to lead in the future will pair the power of advanced technologies with human ingenuity. Artificial intelligence, for example, has the potential to replace routine human tasks but also provide insights for bankers, insurance underwriters or property managers to solve complex problems. In fact, “superjobs” — roles that require a breadth of technical and soft skills and aggregate roles previously performed by multiple people — will emerge in many areas of the financial services industry.
Helping workers adapt will be critical. In a recent Deloitte survey, 72% of financial services executives identified “the ability of their people to adapt, re-skill, and assume new roles” as a high-priority item to navigate future disruptions. Similarly, the number of leaders highlighting the need to transform worker roles has doubled since the onset of the pandemic. It’s on the minds of rank-and-file workers, too. A plurality or participants in a recent Deloitte webcast said “new tools to augment and automate human activities” are having the greatest impact on their organizations.
Financial services leaders can play an important role in supporting society through work, workforce and workplace transitions and can serve as a model for efforts to reach excluded segments of the workforce. One example is a community-hiring model developed by a major bank that seeks to reduce barriers to employment for qualified individuals with criminal records. The bank recently announced plans to expand the program, which provided jobs for more than 2,000 people and represented 10% of its new U.S. hires last year.
In the years ahead, financial firms will also become even more customer-centric. Delivering on the expectations of high-value customers — those that demand more direct, personalized and socially responsible offerings — will be even more important for not just profitability, but also to help support a broader social mission. Keeping and attracting high-value customers will, in fact, put firms in a better position to invest in financial inclusion initiatives directed toward the underserved.
Finally, we expect financial organizations to form alliances that enable them to extend the scope and value of their offerings and innovate for the next generation of consumers.
New business models that respond to urgent social challenges will more than compensate for declines from traditional revenue sources, but they will require drastic shifts away from current ways of making money.
The recent launch of Google’s Plex bank account, in partnership with several banks, is an example of this kind of emerging cross-industry alliance. This product lets users open bank accounts, pay friends and manage budgets through a new version of the Google Pay app. It is a model that appears to benefit all involved.
These examples underscore our belief that it is possible for financial firms to positively affect society without negatively affecting profits. This belief guides our vision for the future and inspires us to redefine the bottom line. A higher bottom line values the future of our planet and people just as much as profits. It blurs the line between the striving and the successful until there’s less inequality and more shared wealth. That boost to the economy is also a virtuous cycle that enhances the profit potential for banks yet again.
Financial firms can create real and lasting change for the better on a global scale. They are in a position to influence almost every corner of the economy and play a vital role in transforming it. Their ability to seize the emerging opportunities our changing world presents can have an enormous impact both on the industry and our collective human experience in the years ahead. If they embody the principles of a higher bottom line — placing people on par with profits, and actions over intent — financial services will lead the way to a more inclusive, educated society and a sustainable, profitable future.
