Tilting the Scales

News & Insights

Chris Holmes finds out what the differences are in working at smaller financial startup as compared to a bigger bank – and what Napoleon has to do with it.


Big is better, bigger is best.’ This has been, from outside appearances at least, the governing axiom for the development of financial services throughout history. It makes sense of course: bigger institutions means more money can be lent, more risk can be pooled – but it can also lead to “too big to fail,” as the events of 2008 so conclusively proved.

So size isn’t everything in finance, and this is especially true when it comes to considering the culture of smaller firms, as compared to megalithic corporations.

As the financial sector reboots for a technology-driven future, how employees work within a firm – whatever the size of the institution concerned – is also undergoing a revolution. A new generation of employees seeking flexible working and different ideals are just as much of a factor as millions of consumers still angry with banks’ perceived role in the last recession.

A growing army of startups, from Monzo to Habito, are riding this wave of change. For employees, they offer flatter structures than behemoth banks and potentially more fulfilment as part of a promised work-life balance. Yet there are signs the bigger institutions are also beginning to recognize that the old ways of working won’t wash anymore.

David Erixon, chief marketing officer of Royal Bank of Scotland’s nascent digital bank Bó, has held senior roles at big and small financial companies including Ulster Bank, Yolt and South African fintech 22seven. He recognizes
the trend of employees starting to hold more sway within the sector, saying, “Before, businesses operated under
a Napoleonic paradigm. Leadership, information and command flowed from the top down in a rigid structure. Now we’re changing to a network structure. Companies need to build a high level of autonomy and collaboration, yet still be able to align people to go in the right direction. It’s a much more complex environment.”

“People want to be empowered to do great things,” he continues. “The internet has changed all dynamics, allowing the “soldiers” to talk to each other so organizations require strong leadership.”

Andrew Fundell, director at 40-strong international investment and payment solutions firm GC Partners, also thinks new, flatter and less siloed structures are the gateway to future success. He says, “We don’t have many corporate layers. Most senior staff interact with the board on a daily basis. The most important thing is that employees are engaged with the technological evolution. They are very involved if we bring in a new system.”

Having spent most of his career at small and medium-sized financial businesses, Fundell believes the employee culture to be found in them is very different
to the working environment at bigger banks. “The lower the headcount, the greater the impact staff feel they
can make,” he states. “You’re a really important cog, whereas in bigger organizations it can be hard to see what difference you’re making.” Fundell goes on to say that the multi-layered structure at huge banks breeds a culture where risk is assiduously avoided, ultimately impacting client service as “costs are prohibitively high and they are scared to do business.”

Erixon agrees. “Much of banking is about reducing risk – it’s part of the business model and individuals are also risk averse. Leaders should inspire and innovate, but the higher up you go the more personal risk you have. This creates a cultural phenomenon that is akin to apathy.”

From the off, Bó is setting out to be a place where entrepreneurial individuals can gather to put new ideas into practice, Erixon says. “We’re outside the current RBS infrastructure, in a separate building,” he explains. “It’s deliberate. We want to be able to focus on our purpose, which is to help people do money better. It’s a positive model – we only make money if customers save and manage money well – so we can do things differently.”

For Erixon, purpose is a key factor in the current financial sector shake-up. “The industry has forgotten why it’s around,” he says. “Greed took over, and that led
to the financial crisis. But money is a measurement – it’s a means to an end, not the end.” He uses the example of Raiffeisen Bank, the Romanian subsidiary of which he helped when it was struggling to define its purpose. “They simply forgot to look back at the reason the Austrian

founder set up the bank in the first place, which was to take people out of poverty. Sometimes you have to go back into a brand’s history to find purpose.”

Echoing Fundell’s point about staff having a say in a company’s direction, Erixon thinks it’s not just the job of the business to allow this to happen; it’s incumbent on each employee to take part, no matter the size of the organization. “There’s much more responsibility for people to contribute now,” he says. “You can no longer be a passive recipient of “control and command,” you must actively influence. Great organizations I’ve worked for had employees with high degrees of personal responsibility and overall alignment [with purpose].” He cites Amazon as a good example of decentralized accountability.

And personal responsibility means, as Fundell suggests, a fundamental challenge to traditional career pathways through financial institutions. Describing GC Partners he says, “We are not a company where you have to ‘do your time’ before eventually getting a promotion.” He feels established firms need to adopt a mentality of rewarding ability rather than sticking to rigid timescales.

Yet despite his reservations about the culture of bigger financial businesses he believes they still have much to teach smaller players. “We have to be careful that, in being agile, our employees aren’t making off-the-cuff decisions,” he says. “Large organizations are very good at procedure so looking to them for help can be useful. It’s about finding a middle ground so we follow a process that cuts out knee-jerk reactions but do things quicker than big banks can.”

Purpose, technology, and new company structures and culture are reshaping recruitment in
the financial sector. Both big and smaller businesses are looking for different types of people, Fundell says. “When we recruit from bigger banks it’s not too successful as candidates are often institutionalized and good at doing one thing well. An organization where you do 10 things is very different. I’d rather have someone with an entrepreneurial attitude than a [previous] tiny role.”

Erixon adds that technology is rapidly overhauling the skills employees will need for a successful future in finance. “Jobs are changing dramatically as more traditional tasks are done by machines,” he observes.
“If you’re interested in financial services, I’d say you need to go down the route of user experience, design, technology, data or behavioural change. It’s not about counting money and looking at spreadsheets anymore, it’s about true customer-centricity.”

With growth set to come from several sources, including smaller companies such as GC Partners and new ventures like Bó spun out of traditional institutions, it’s clear that employee culture in financial services is entering a period of unprecedented evolution. As Erixon puts it, “The nature of change is changing. You can’t just do what you already do, but faster. You need to do it differently – that’s the real cultural challenge.”