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New C-Suite Positions in Banking

Posted by Jeff Pelliccio on Jul 16, 2018 9:00:00 AM

In ICS insights, hiring trends, Accounting and Finance, client

Until recently, you could count the number of C-suite positions in the banking industry with one hand.  Most banks and credit unions have a CEO, CFO, and COO. In some cases, financial institutions may have had a Chief Risk Officer, Chief Retail Officer, Chief Marketing Officer, Chief Lending Officer, or Chief Compliance Officer. These titles have been around long enough that most people in the banking world recognize them. Recently, banking has become increasingly more complex with the rise of features including Internet banking and mobile applications. To confront this wave of complexity, banks have begun expanding the amount of C-suite positions to help target highly specific areas.

Generally, the traditional C-suite positions still maintain the majority of control when it comes to high-level decisions, however, the new C-suite positions still play a vital role for companies, helping them compete and stay relevant with other banks and credit unions. There’s a wide range of C-suite titles, ranging from more common roles, such as Chief Data Officer or Chief Analytics Officer, to more unusual roles, such as Chief Happiness Officer. At the majority of banks, the following more common C-level titles are beginning to appear:

  • Chief Digital Officer
  • Chief Transformation Officer
  • Chief Innovation Officer
  • Chief Data Officer
  • Chief Experience Officer
  • Chief Culture Officer
  • Chief Strategy Officer
  • Chief Analytics Officer
  • Chief Technology Officer
  • Chief Engagement Officer
  • Chief Growth Officer
  • Chief People Officer
  • Chief Design Officer
  • Chief Client Officer
  • Chief Branding Officer

Why Are These New C-Level Titles Appearing?

The corporate structure that began in the 1950s—which worked extremely well for decades—is too inflexible for the current business landscape. In the past, big-picture decisions were strictly in the role of the CEO, but that’s not the way the banking world operates today. In modern times, the CEO creates a team of senior executives who are tasked with handling high-level decisions. By expanding the number of C-level positions, the company is able to recruit more people who have specific knowledge and skills, which helps the bank or credit union make more optimal decisions. Today, companies are seeking people who focus on specific, high-level priorities, instead of tasking a single person with making a wide range of strategic decisions.

The new C-suite titles allow companies to draw attention toward specific strategic priorities. Many of these new titles are a way for a company to show that it’s focusing on a particular company function or initiative. For example, after a serious data breach, a company may go out and hire a Chief Security Officer to show investors and customers that this is an issue that the company believes is critical to its continued success.

New C-level positions are also being used as a branding and sales tool for many recruiters. When a CEO sees two candidates, one with a traditional title like Chief Marketing Officer and one with a new, unique title such as Chief Growth Officer, the CEO usually hires the marketing officer, even if everything is equal between both candidates. Because of this, some recruiters are helping job seekers find employment by branding them with a title that more accurately represents how they can help the company.

Market forces are another reason for the recent rise of C-level titles. The proliferation of C-level positions is also due to the fact that candidates have more leverage than employers when the economy is doing well. Furthermore, companies can use C-level titles as a way to award job seekers instead of providing additional financial compensation. While the competition for the best title may be steep, it’s doesn’t cost anything to offer job seekers a respected, C-level title.

Instead of giving a candidate a higher compensation package, a company may elect to offer a C-level title. Many employees feel that they deserve promotions for their work, which is leading to companies offering “important-sounding” titles to avoid having to provide a pay raise. Many employees are fine with this, as they feel like a more valuable asset to the company and appreciate the “better” title and the fact that they ascended to the prestigious C-suite rank.

While awarding C-level titles as a promotion or hiring tactic is a cheaper way of acquiring and retaining talent, companies still have to provide employees with pay that reflects what people expect from C-level positions. However, even so, it’s still cheaper for many companies to create these new titles rather than offer a substantial pay raise.

Are These New C-Level Positions Here to Stay?

These new positions will be around for a long time. While they don’t have as much influence and power as the tradition C-Suite positions, and in many cases, won’t report directly to the CEO, they still play a vital role for companies. These new positions are assigned results-focused responsibilities and have an opportunity to create large, positive changes for companies.

What Responsibilities Do These New C-Level Positions Have?

Since it’s believed that these new positions shall remain around for the foreseeable future, it’s important for you to know exactly what they do and how they fit into a company’s larger corporate strategy. Next, we’ll explore the most common C-suite positions that have recently appeared.

Chief Digital Officer

A Chief Digital Officer (CDO) is tasked with helping a company assimilate into the digital age. Someone in this position focuses on coordinating and managing wide-ranging changes that deal with how a company works to developing completely new businesses.

Someone in this position is expected to work and create progress quickly. A CDO is fairly similar to a Chief Transformation Officer (CTO); however, a CTO implies that there’s an end point in sight. As the digital landscape is constantly changing, a CDO is likely to consistently have new challenges and constantly be on the lookout for ways to improve the company, especially with how far behind most credit unions and banks are when it comes to technology.

Chief Experience Officer

Over the last decade, customer expectations have dramatically changed. Major tech companies, such as Google, Amazon, and Apple, have treated customers with speedy service, convenience, and a simplistic experience, which few credit unions and banks match. Financial institutions are realizing that enhancing the user experience is likely the best way to gain a competitive advantage, and that’s where the Chief Experience Officer (CXO) comes into play.

By leveraging best practices in user experience and design, a CXO simplifies the banking process for customers. While the digital experience is a major part of the job, the CXO also looks for ways to improve contact centers, branches, and many other touchpoints.

Chief Analytics Officer

A Chief Analytics Officer leads data analytics strategy, drives data-related business changes, and transforms the bank into a company that’s driven by analytics. This position is important in the modern banking world, as we’re moving toward an “algorithm economy” with only two important factors: the data you have to work with and what you do with that data. In a landscape where some banks struggle to calculate the exact number of customers they have, a Chief Analytics Officer can help a company gain a competitive edge by intelligently utilizing the massive amount of data available to financial institutions.

In the Digital Age, a Chief Analytics Officer works closely with the IT department and marketing teams. Sometimes, this position is confused with a Chief Data Officer or Chief Information Officer. The major difference is that these two positions focus on input, while a Chief Analytics Officer focuses on output and actionable insights. All of these positions are important, however, as the companies with the best data sets, or output, and the best algorithms (output) will be the leading financial institutions of the future.

Chief Innovation Officer

Most credit unions and banks aren’t very innovative. Their business model focuses on minimizing risk, which means that they don’t expend much energy on creating new tools, products, or ideas. While this may have worked in the past, many companies are hiring Chief Innovation Officers to introduce group processes and tools and promote creative thinking. This position is tasked with helping people in the organization develop new ideas through ideation platforms, such as hackathons, jam sessions, or internal or external crowdsourcing programs.

A Chief Innovation Officer analyzes market disruptions and trends, seeking new market opportunities. Then, they have to work to ensure that the new opportunities are able to continue without being disrupted by managers who are interested in maintaining the status quo. This requires the Chief Innovation Officer to have great communication skill and be able to present data for managers that show exactly how the new, innovative changes lead toward increased productivity.

Chief Growth Officer

Chief Growth Officer isn’t so much a new position, as it is a new name for an existing title. Intelligent CMOs will leave their old title and begin working as a Chief Growth Officer, as most financial institutions have a difficult time with marketing because they view it as an expense without a guaranteed return on investment. Most CEOs and CFOs take a negative position toward marketing. A Chief Growth Officer works on analyzing the entire customer journey no matter where buyers are in the purchasing process. This position involves aligning business development, marketing, sales, operations, and information technology with market dynamics, buyer behavior, and customer preferences and needs.

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