The Enemy Within: Why Indecision is the Banking Industry’s Biggest Threat
By E.J. Kritz, Chief Experience Officer at DBSI
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Executive Summary
- In today’s banking environment, business decisions are increasingly complex, encompassing choices in everything from technology and business models to staffing strategies and branch deployments.
- While “data-driven decision-making” sounds great in principle, in practice too much data can create a paralysis in C-suites and boardrooms.
- The solution is to not try to gather all the information available, but just enough to make a decision. Not making a decision (or delaying a difficult decision) is a decision in and of itself and may be the worst option.
The biggest threat to banking is not what you think. It’s not AI, it’s not the regulatory or rate environment, and it’s most certainly not fintech.
A look inside the four walls of an individual financial institution is the first place to look if you want to find the industry’s true threat. That is where the sleeping monster lives.
Its name? Indecision.
When Process Kills Progression
Lindsey Ogan, CMO of Stride Bank (the bank which holds deposits for Chime and helps move payments for DoorDash and Lyft) put it best when she said, “No one makes perfect decisions because none of us have a crystal ball.” And yet, indecision rages on.
I think back, not-so-fondly, on a particular instance in my banking career when I was asked to create a comprehensive plan to help improve the service culture of the organization. It was the assignment I’d been anxiously awaiting so I quickly got to work. After several weeks, my five-point plan was complete and ready to present to the executive team.
Or so I thought.
First my boss needed to review it. That took weeks.
Then “my boss’s boss” needed to review it. That took months.
By the time the plan hit the desk of the executive in charge, it had been sterilized past the point of recognition, rendering decision-making nearly impossible. The plan was DOA.
In this instance, the indecision was tied to a lack of employee trust and empowerment, one of many reasons an executive may struggle to make the call.
In today’s banking environment the decisions are far more complex, and with far-reaching implications. Critical choices to be made about things like technology investments, staffing models, and branch deployments – and these are just the tip of the iceberg. While saying “we’re working to make data-driven decisions,” sounds great in principle, in practice too much data can create an environment of decision-making paralysis in C-suites and boardrooms.
“You must collect enough appropriate data points to make a decision, but you must make a decision. Not making a decision, is a decision in and of itself, and that may be the worst option,” says Jason Lee, the forward-looking CEO at REV Federal Credit Union headquartered in greater Charleston, SC.
The problem is understandable.
Dig deeper:
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Breaking Down the ‘No’ Mindset
Investments are massive, tech stacks complicated, and consumer and employee trust nearly always hangs in the balance of virtually every decision executives face. Whether the goal is to be a fast-follower, early adopter, trend setter, or whatever you want to consider yourself, hanging on the perch is potentially the true danger.
While it may be easy to point the finger at the C-suite as the greatest source of indecision, it is this writer’s opinion that banking is still (though hopefully not forever) plagued by the “we’ve always done it that way” legacy mentality. This may be the worst source of decision paralysis as it robs the C-suite of the ability to make decisions.
Simply put, legacy environments serve as brick walls, preventing an opportunity from hitting the decision-makers’ desk.
The CEO’s biggest challenge is breaking down legacy thinking and removing what I call the “No mindset.”
As longtime TD customer experience leader Linda Verba would frequently say, “Our job is to find a path to yes.”
REV’s Jason Lee recognizes the importance of leading this shift within the confines of a growing credit union. Leading a solid-sized financial institution with over $1 billion in assets, tens of thousands of members, and a growing footprint with nearly 20 branches in the Carolinas and soon West Virginia (thanks to REV’s acquisition of First Neighborhood Bank), Lee knows the responsibility of moving past “no” starts with him.
“I deliver a new vision and formulate the strategy to achieve it. From there, I seek to motivate leaders and key contributors to buy in on the plan. I create excitement and enthusiasm for everyone to leave old legacy behind and to participate in the creation of a whole new future,” says Lee.
Simply by following REV on social channels, it’s easy to see that the plan is working. Employees are bought in, success is celebrated the right way, and the organization has the freedom to operate in its own unique way while supporting the greater good in the community.
While growth and change are tempting, change for the sake of change is a danger. Executives, especially those who are new in-seat, each have their own style and pace of decision-making which Lindsey Ogan cautions is another challenge in adjusting a legacy mindset.
“I always try to be emotionally intelligent before I start ripping up the carpet in an organization. Often, as I’ve listened more deeply to colleagues that are advocating for the way things have been, I realize it’s more complicated than that. A little empathy goes a long way when realizing that my ‘big idea’ completely reshapes something they have spent their entire career building, and that is understandably painful, even if necessary,” says Ogan.
When I stepped into my position as the Chief Experience Officer at DBSI just over a year ago, I joined an incredible company but certainly had my own vision for growth and support of the banking industry. The advice I received on pace of change is similar to how Ogan and Stride Bank approaches change and critical decisions.
Pilots Over Paralysis
Ogan says, “At Stride, we fight analysis paralysis by calling things ‘pilots’ or ‘experiments’ to keep us from getting stuck in the strategy.” This approach in many ways serves as a safety net, preventing executives from feeling a sense of permanence within the decision-making process.
To avoid the never-ending pilot, Ogan shares another great piece of advice with one of her signature phrases, “Stop touching it.” The point is that perfection is nearly always out of reach and sometimes we need to be okay with “good enough.”
Writing this article has caused me to think back on my favorite leaders, both in and out of banking, and I realize they have all possessed incredible instincts which enabled them to be decisive even in the face of pressure.
A 2024 survey by Robert Half found that 37% of employees consider decisiveness to be one of the top leadership traits they value. Research by MIT’s Sloan Center further validates the importance of trustworthy leadership and decision-making courage, noting that teams with a “highly trustworthy” leader delivered 30% better project outcomes over two years.
“If you have a tough call to make, the most important mindset to bring into that situation is grace. Sometimes we’ll make the right call and sometimes we’ll make the wrong one, but we have to give ourselves grace to be wrong when we have made the best decision we could with the information we had. Do your best, cut yourself some slack, and live to fight another day,” says Ogan when asked what advice she has for leaders stuck in a state of indecision.
As an advisor to industry leaders facing branch transformation decisions, I recognize that sometimes I need to tell a leader something they may not want to hear or politely push them into the direction they seek. That is the true value of a great partner, and I would encourage my supplier peers to have the courage to tell the truth, even if it puts the relationship in the balance. Avoid being the consultant who simply tells the client what they want to hear.
Consider the advice offered by Lee, “Trust your instincts, they have served you well in becoming an executive. Over analysis leading to paralysis is real, avoid it at all costs.”
In banking, the riskiest move is not making one.
