3 mei 2021

Young financials stimulate a culture change

Restore of confidence in the financial sector; debate VU University Amsterdam

Who and what will solve the blemish of the financial sector? The customer probably wants integrity. But it has to come from within! The core of the changes lies with the young guard, who prefers quality over quick money. Greed is good is really the past.

A new era has dawned in the financial sector. A time of modesty, self-reflection and back to basics. Customers just don’t quite believe it yet. And don’t blame them for that. How do the banks and insurers get their moral credit back, what ensures that confidence is restored? About 80 to 90 leaders from the financial sector debated these questions on October 7 2014 at the VU University Amsterdam.


Overestimation is the cause of the problems, says the financial specialist who opens the debate. Anyone who sees no boundaries cannot respect them. This applies to financiers, but also to private customers and companies. Think of Icesave (the Icelandic bank that promised irresponsibly high interest on savings). The municipality of Amstelveen and the province of South Holland has also stuck in it with open eyes. Whether the basis of the problems really changes? The speaker referred to a report from the IMF that warns against deferred bonuses. Are we aware that postponing is more dangerous than lowering?

On foot

Consciousness sometimes lags, the moderator continues. Customers did express their disgust about usury policies only after they had been entangled in it for years. Shame must have played a role, but apparently the sector was still very confident at the time. When trust, as they say, comes on foot and goes on horseback and the horse is already so slow …

But it is being worked on.

From previous sessions on this subject, young professionals have made a so-called culture map together with De Argumentenfabriek. The road to recovery has been laid down with this culture map within a number of core values. Today, in three debates, we zoom in on some of the topics derived from this.


DEBATE ROUND 1: Changing norms and values



The world is changing, just like leadership thinking. One of the ambassadors of the culture map, a typical young financial person, believes that modern leadership mainly means that you listen carefully to employees and customers. In the beginning, his vision found little response to the application committee of his current employer. Above all, you should set a good example, the senior told him. In the end they found each other – was it communication? By listening carefully you can also set a good example!


Listening carefully certainly fits in with the new movement we are seeing, says his table partner. He obtained his PhD as a philosopher on the relationship between modernization and tradition and nowadays applies his knowledge in the business world. This specialist, hoping for a movement from below, had actually expected the catharsis earlier. Where did the cleaning process stop? Probably where there was most to lose.

The third debater at this table, an eminent director, mentioned the research among 800 members of trade unions. This shows that motivated employees feel most often hindered by the top during (cultural) change.

Percentages of profit

He thinks that the core of sustainability should be central to changes. As a customer, we want to be served in what we really need. This means that as a bank you should not strive for high profit percentages for private individuals: 8-10% is already very solid. Is this new directive already noticeable? Little support from the participants! What happens now, is said, and is that regulators are cramped by all the new rules, protocols and checklists that have been poured out upon them by the crisis. This puts the customer out of the picture.


What should be the role and focus of the bank? The expert of technology: you have to separate the office function from the IT. The question is; are traditional banks the best party to develop IT? The development of new technology is booming in China and India. In Europe you often look at something that resembles to the Internet from the 1990s. You notice the effect, says a professor in the room. Google and Apple now account for a significant part of payment traffic. And what does it mean if they also trying to do deposits in the future?

Function of financing

Interesting question! Then the worst crisis may be ahead of us. The director thinks that parties like Google are more likely not to seek cooperation. He is more concerned about the bank’s funding function. We are on the eve of a major wave of investment that should take us from a linear to a circular economy.  There must be a connection between the banking and pension sectors. How are we going to do that? The Dutch financial sector is grossly lacking a solid system for financing venture capital. Peer-to-peer lending en crowdfunding are signs of the times. If banks manage to join new developments…


DEBATE ROUND 2: (in)comprehensible products and services


The bonnet

” When claimed pursuant to this article, the Debtor owes a penalty equal to the penalty provisions applicable at the time of repayment …” etc. Which customer understands what is stated here? And is it his job to understand exactly what he is buying? Not quite, says the first person of a new round of speakers, economist and dean at a well-known training institute in the financial sector. Ninety percent of people who buy a car don’t look under the bonnet either. It’s about fairness. You have to think, but as a customer you must also be able to assume that companies are also acting in your best interest.


Product descriptions remain a theme, despite some genuinely courageous efforts. There is something else. The second discussion partner, professor of general economics, points to the macroeconomic effects of some financial products. For example, do we know the so-called coco’s? These are bond loans that, if things go badly, are converted into equity. Good for the bank and for the customer, but very harmful to society. The professor is sometimes baffled about the level of knowledge or consciousness about macroeconomic effects among the providers themselves.


There is agreement about irresponsible system effects. The contamination that a bank like Goldman Sachs has passed on to society is far greater than the pain for some companies. It is striking that the younger generation is more open to a new financial ethic. A representative of this group at the table works in lending for the Dutch offshore. Would she protect unwitting customers against themselves? Yes, she says. That makes sense to me.

There is noticeable scepticism in the room. Will banks really improve their lives? Isn’t there a subtle but essential difference between trust and confidence? Why words like integrity, when it should go without saying? Speaking of ethical margins; wasn’t it been noted before that people think longer about buying a washing machine than about purchasing a mortgage? That margin is always used. Advisors who would ignore the company’s interest in favour of the client? Come on, that culture does not exist.


A culture can leave you dumbfounded. In his work as a coach in banking, he often sees the best ideas clot into a technical story. The higher he moves in the hierarchy of the company, the more persistent that tendency. Ultimately, he says, management is still based on Key Performance Indicators (KPI’s). What are principles worth if no one notices them? Another participant, a designer, chooses an unexpected angle. In the financial world he misses the aspect of design; a methodical, ethical and socially responsible way of working. In most sectors, designers are involved in the (innovation) process. In industry, agriculture, trade, entertainment, politics and even the pharmaceutical industry, he says, design has long been commonplace.


DEBATE ROUND 3: Address each other about ethical and unethical behaviour



The design aspect is well received. Yes, a protocol that stimulates ethics and makes it visible in images and language. There is another side, the inside. If the financial world wants to work on a new ethic, a culture will have to be created in which people address each other about deviant behaviour. How hard is that? A young professor introducing the latest round of debate notices that feedback can easily lead to irritation among the older generation. This generation is not used to a rebuttal, he indicates, certainly not from below. Of course you also have to dare to stand up against the establishment. For him it’s easy, he says. He is young, has no mortgage, and can still go in any direction.


A new culture requires new employees and a transition takes time, two bank executives at the table know. Addressing each other is not in your genes when you work at a bank, it is delicate; many people have yet to learn it. Despite training, not everyone turns out to be suitable. Many banks have been hit hard in the intermediate layer. Isn’t that extremely hard? A specialist in organizational behaviour says that her department initially thought dismissal was justified for every compliance issue, but later reverted to this. Something was wrong, she felt, it was too radical. And now? They don’t know yet and still thinking about it.

Back straight

Increase the throttle or reduce the throttle. Doubt can also be courageous. New legislation and regulations must guide and support the new culture, but in the end, as a disciplinary judge in the room emphasizes, it is all about morality. This judge believes that the sector is still painful lacking in self-critical capacity. Legitimate reasons for dubious actions always turn out to be available. It is said that the customer wants it. At a certain point, he points out, you also have to be able to keep your back straight to that customer and dare to say no. People must be trained and guided in this.


A theme, as said before, is still the bonus culture. About a quarter of a century ago we have ended up on the wrong track of profit maximization, repeats the speaker from debate round 1. People were given a bonus for serving that interest, which has given an impulse to some kind of unnatural action that has not yet been eliminated. What are we going to do about it? Although bonuses are now more strictly controlled, they still exist. In short, the will is there, but the way is still as long as the old culture is persistent. Real change seems to be the conclusion, will have to come from the new generation: Dutch promises in lean times! The young professional from this round does not receive a bonus from his bank. And he doesn’t need a bonus either, he says, without false modesty. He has seen what can go wrong and feels responsible for a new morality in this industry. He was hired on the day Lehmann Brothers fell. A human being does not need more symbolism.


Participants in this debate included:

Herman Wijffels (former chairman of the Rabobank and The Social and Economic Council of the Netherlands, SER), Haroon Sheikh (Dasym Investment Strategies), Dirk Schoenmaker (economist and dean at the Duisenberg School of Finance), Frank den Butter (professor of general economics at the VU University of Amsterdam), Joanna Kellermann (a director of the Dutch National Bank), Margreet van Ee (CEO of Achmea Bank) and Hub Bongers (strategist of itS Amsterdam).



Written by Yvonne van Osch

The debate is continued in The Young Financials Dialogues in the Nieuwe Poort