Creating A Culture of Innovation that Builds Consumer Financial Knowledge
An EMERGE Pre-Conference Interview with Keynote Speaker Nandita Bakhshi
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Nandita Bakhshi is President and Chief Executive Officer of Bank of the West and co-CEO of BNP Paribas USA Inc. She is responsible for the strategic direction of Bank of the West and ensuring her bank’s people, processes and technology are working to continuously improve the experience for Bank of the West customers.
Why do you do what you do?
I love banking. I like to say ‘Bankers are dream makers.’ Every day we help families buy homes, manage their finances and plan for retirement; and we help businesses — from small entrepreneurs to corporations — expand and succeed locally and globally. That is exciting and so satisfying. From my early years as a branch teller, I developed a passion for understanding customers and ensuring products and services help them achieve their goals.
What is an obstacle to innovation in banking?
Banks are inherently cautious. That’s a good thing. On the one hand, consumers and businesses want to know their deposits are safe and secure and that their lender is responsible. There is an important role in our economy for institutions that are strong, stable and trusted.
Yet, on the other hand, consumers and businesses increasingly want faster decisions on loan applications, transactions that go through in the wink of an eye, and services that are mobile and more user-friendly.
So the question for all of us in banking, is how do you create a culture within a conservative industry that encourages employees to be innovative, to move faster, to try new things, to not let fear of failure stifle a spirit of “Let’s Try”?
Here’s how I think about innovation. There is small ‘I’ innovation and big ‘I’ innovation. The latter involves large investments in break-through solutions. BNP Paribas’s Cash Without Borders blockchain project is a great example.
While we pursue those types of game-changers, our industry should also encourage small ‘I’ innovation. Let’s ask ourselves this: What can we do differently with existing resources to work faster and in smarter ways to help employees and customers? Do we have a culture that encourages creativity and collaborative problem solving?
Let me give you an example at Bank of the West. Our culture is one where people feel empowered to do the right thing for the customer. Last summer, we decided to use our internal collaboration platform to try something new: a Reddit-style Ask Me Anything, or AMA, for all employees to ask me as CEO anything that was on their mind. People loved it! They appreciated the direct interaction with leadership, and our willingness to do something different. This year we have held two more executive AMAs with a fourth in the works.
But, then we went a step further. We said, ‘We don’t just want questions, we want ideas.’ So we hosted an internal crowdsourcing event to ask employees for ways to improve our business. We received dozens of ideas from all around the organization. Now we are working to implement several of those, and preparing for our second crowdsourcing event.
Our AMAs and crowdsourcing sessions are just two ways we are taking a great culture at Bank of the West and building on it by doing things in new, innovative ways. The events demonstrate our leadership’s openness to new ways of thinking and working — and, the traditional banker in me is happy because they are high return and low risk!
What is the most pressing financial challenge for today’s consumer and what is the role for banks in helping consumers?
Thanks to rapid innovation, consumers have many choices when it comes to managing their finances: simple mobile apps for tracking your credit score, robo advisors, online sites for installment loans of a few hundred dollars, and crowdfunding sites for startups to raise millions.
There are so many “solutions” and, yet, we face a nagging challenge to improve financial capability, which is founded on knowledge and confidence. Data from the FINRA Investor Education Foundation shows a general lack of financial knowledge in the US. Sixty-three percent of Americans score low on the foundation’s survey of basic financial understanding — up from 58% in 2009. So consumers are moving in the wrong direction!
In a world where innovation is accelerating, knowing which app to use should come after one knows what inflation is. Consumers need to know the basics: the difference between a checking account and a savings account, why a FICO score matters and how to improve it.
I believe it is both our responsibility and in our best interest as an industry to focus on financial capability, and help ensure Americans have the knowledge, skills and confidence to make sound money decisions. As a bank, our core business is founded on deep financial expertise, and that is why sharing financial knowledge in the communities we serve is a priority for Bank of the West.
We are a trusted source amidst the dizzying array of financial choices. Our employees routinely go into schools to teach financial skills to students. And, among the dozens of fintechs that work with us, we partner with several to specifically improve financial understanding in the community.
We partner, for example, with EVERFI to help students in California schools receive online financial training that is supported by classroom visits by our bankers. And, we have a partnership with EARN, the San Francisco non-profit that was recognized last year by CFSI’s Finlab as a fintech innovator. We’ve had a relationship for a decade with EARN, which is helping thousands of low-wage families build their savings.
Beyond banks’ vital role of lending, holding deposits and helping people manage cash, we are a financial partner in a changing world. To paraphrase Mark Twain: Reports of the death of banking are greatly exaggerated! Consumers and businesses want and need the trusted expertise and knowledge that banks provide. This doesn’t mean our industry can ignore the rapid change occurring today. But in a world where fintech startups are playing an increasingly important role, I see banks as the foundation. We have deep expertise and continue to expand our role of providing guidance, spreading financial knowledge, and supporting families and businesses to make informed and wise financial choices.