Company Culture

Defining Company Culture in the Financial Services Sector

June 15, 2022
June 23, 2022
  —  
By 
Sarah Lindenfeld Hall
Lattice Team

Straight-laced. Growth-focused. Hard-charging. For decades, this is how company culture in the financial services sector has been described, and it’s made sense — until now. In this highly regulated industry that focuses on building wealth, banking and finance organizations have intentionally designed corporate cultures that value structure and formal rules to ensure they stay in legal compliance, protect their clients’ sensitive financial information, and continue to grow their customer base.

But over the last decade banking has changed dramatically, moving from primarily in-person transactions and offices to online banking and a hybrid workforce. Today, financial institutions aren't just competing against each other to recruit top talent — they’re also competing against other industries, including tech and consulting, to recruit and retain the most talented workers.

In this competitive candidates’ market, employees are now demanding more from their employers than just a paycheck — they’re looking for flexible working arrangements, work-life balance, career development opportunities, and meaningful work that provides a sense of purpose. And individuals are seeking workplaces with a strong company culture that represents their own values. Some 40% of global candidates say colleagues and company culture is a top priority when picking a job, according to a LinkedIn 2022 Global Talent Trends report.

What’s more, in the financial services industry in particular, conservative legacy institutions are facing increased competition from fintech startups, which are more likely to offer the innovative and flexible culture that today’s labor force wants. If the financial services industry doesn’t do more to adjust its company culture to address the expectations of their current and future employees, they’ll be on the losing end in this battle for talent, cautioned Abi Ireland, a UK-based performance strategist and executive and business coach.

“People are going to vote with their feet, and really good people will [say], ‘I’m just going to go somewhere else that does appreciate me, where I can be who I am,’” said Ireland. “[Culture] makes a difference.” 

As banking and finance organizations set their sights on the future, a reshaping of their company culture may be in order. Here’s how to define company culture — internally and externally — in the financial services industry. 

What Is Company Culture? 

Company culture is the attitudes, behaviors, values, and norms that are “widely shared” and “strongly held” across an organization, according to Massachusetts Institute of Technology researchers — from the dress code at work to how leaders and managers embrace or discourage autonomy or innovation. But unlike other corporate goals measured in OKRs or KPIs, company culture is more difficult to describe.

“You can feel [culture],” said Ireland. “It’s intangible.” 

Culture can vary widely, depending on the organization and industry. But four main types of company culture dominate the workplace, according to the Project Management Institute, a professional association for project managers. These four types of culture are:

  • Clan Culture: Values teamwork and mentoring
  • Adhocratic Culture: Encourages risk-taking and innovation
  • Market Culture: Rewards productivity and market success 
  • Hierarchical Culture: Emphasizes stability and governance

Hierarchical culture has been common in the financial services industry because of the regulatory compliance requirements and the need to demonstrate that workers are being careful with their clients’ money. 

“When you have an entrepreneurial environment, people…have the autonomy to break things and put them back together,” said Kimberly Prescott, founder and President of Human Resources consulting firm Prescott HR. Conversely, in banking there are a lot of forms to fill out and regulations to follow, noted Prescott. “They’ve allowed that to define their culture,” she said.

“Your culture is the experience that people have in your organization...It’s the personality of your organization. So you can have as many beautiful statements as you want, but if that’s not what people experience when they get there, that’s not your culture.”

Start With Your Company’s Mission and Values

The path to defining and cultivating a more intentional culture requires that financial institutions first focus on their mission statement and core values. A mission statement spells out why your company does what it does beyond the physical production of products or services. Zappos’s mission statement, for example, isn’t to sell apparel online — it’s “to live and deliver WOW.” 

A company’s core values often grow out of its mission statement, defining how employees conduct themselves on the job. Zappos’s core values include “deliver WOW through service,” “build open and honest relationships through communication,” “be adventurous, creative, and open-minded,” and “pursue growth and learning.” Defining these values and keeping them relevant and tangible requires regular, ongoing work that starts with building a team of trusted staff members who can lead the process.

While a mission statement and core values help cultivate culture, it’s important to remember that your culture is not your mission statement or your core values, Prescott noted — it’s a reflection of them. 

“Your culture is the experience that people have in your organization,” said Prescott. “It’s the personality of your organization. So you can have as many beautiful statements as you want, but if that’s not what people experience when they get there, that’s not your culture.”

But, when companies have defined their mission and values, it’s more likely employees will operate with the behaviors and attitudes that are required to maintain a deliberate company culture.

Work on Culture Internally

Building and maintaining a healthy organizational culture is a top priority for Bright!Tax, an online tax services provider for Americans living abroad, and the company constantly does work internally to support this. At Bright!Tax, the purpose behind everything workers do isn’t simply to file people’s taxes — it’s to help US taxpayers live in every corner of the world, said Katelynn Minott, the company’s CEO. “When you’re creating a culture, the underlying theme has to be a meaningful ‘why,’” she said.

As the company grows, Bright!Tax is also working to ensure employees are always operating under its five core values — to be extremely kind, act with integrity, strive for perfection, exercise balance, and have fun. Minott recently presented Bright!Tax’s set of values while onboarding new hires, and led a presentation on being extremely kind with her team.

But even before Bright!Tax brings on new employees, these values are always top of mind, she said. To evaluate job candidates for a culture and values fit, prospective employees take part in a 90-minute panel interview, where they’re asked open-ended questions about how they’ve addressed challenges or acted with integrity. 

“The values that we have developed as a firm inform [our] decision-making and interview and [candidate] review processes very heavily,” Minott said. “Every single question that is asked in an interview is tied back in some way to our five values as a firm [to] ensure that [each new hire] is a good fit for our culture. The rest can be trained and learned.” 

One study from Duke University’s Fuqua School of Business found that more than 90% of executives acknowledged that culture was important to their firms, but only 15% said it was exactly where it needed to be.

Demonstrate Culture Externally

Defining company values and culture is a two-way street, and today’s job candidates are also evaluating potential employers for their mission, values, and culture, too. Here are three ways to define and demonstrate your company’s values and workplace culture to job candidates:

1. Storytelling 

During interviews, give concrete examples of how employees are living out an organization’s values, Minott advised. For example, a Bright!Tax team member recently had to undergo emergency surgery and was out of work for a few weeks. Three coworkers quickly jumped in to ensure that their colleague’s clients were covered and they had no accumulated workload when they returned. In this case, the team members were embodying at least two core values — being extremely kind and helping their coworker exercise balance. 

When Bright!Tax staff members do something that embodies company values like this, they're encouraged to share these stories — with coworkers during daily huddles and weekly meetings and while interviewing job candidates and onboarding new hires. During onboarding, for example, new employees attend a values presentation where five team members who each embody one of the company’s values talk about what those values mean to them. 

“We encourage our team members to share those moments,” said Minott. “Storytelling gives meaning to values.” 

2. Marketing 

Just as with marketing to potential customers, employers need to take a more proactive approach as they sell their workplace to potential new employees, too. Ireland recommended using content like case studies, social media posts, and external company websites and blog posts to showcase the employee experience and bring it to life.

3. Job Descriptions 

Instead of frontloading job postings with a role’s responsibilities and requirements, Shannon Curtis, a Human Resource business partner for HR consulting firm Employers Advantage, prefers to lead with information about the organization’s culture and diversity, equity, and inclusion (DEI) initiatives. For example, Curtis might start by describing the workplace as hybrid, casual, family-friendly, and team-focused. She’s even included some of these types of keywords in the job titles themselves, such as “Flexible Work Arrangement Financial Analyst” or “Hybrid Financial Analyst.” 

How Culture Translates Into Performance 

All of this work to define company mission, values, and culture — and ensure that it’s maintained — can require significant changes to policies and practices. And unfortunately, many leaders haven’t been taking the appropriate action to accomplish this. One study from Duke University’s Fuqua School of Business found that more than 90% of executives acknowledged that culture was important to their firms, but only 15% said it was exactly where it needed to be. 

These days, however, as the cost of turnover and employee retention add up and financial institutions jockey for top talent, leaders should keep in mind the measurable impacts of a healthy corporate culture. Company culture can seem vague and intangible, but the results of a good one are definitively not. Here are two concrete benefits of a healthy corporate culture:

1. Growth and Engagement

A strong organizational culture nets companies a 50-point increase in employee engagement over three years, and an 85% net profit bump in five years, according to Gallup. In turn, Gallup research found that strong employee engagement is tied to higher customer ratings, lower turnover, less absenteeism, and fewer safety incidents.

2. Diversity, Equity, and Inclusion

 Building cultures that value diversity, equity, and inclusion could support growth in the financial services industry, where there is often little diversity, especially in leadership roles. In 2021, 64% of C-suite leaders in the sector were white men, according to McKinsey.

A workforce where all people — regardless of their gender, race, and age — are supported and can move up through the ranks can translate into better on-the-job effort and employee performance, according to Gartner. And diverse companies are more innovative: Organizations with above-average diversity on their management teams enjoy innovation revenue that’s 19 percentage points higher than those with below-average leadership diversity, according to global management consulting firm BCG.  

Culture Shifts on the Rise

Even though the financial services industry can appear to be lagging behind other sectors when it comes to organizational culture, there are signs that culture shifts are being made within the industry to address workers’ expectations. Curtis sees it in the dress codes she’s including in employee handbooks today. “When I was in-house years ago, it was professional dress — ties and slacks and button downs,” said Curtis. “Now I find it’s a little more flexible. Jeans are working into more dress codes. Or, at least one day a week, the dress is much more casual.” 

New technology is also allowing more flexibility in the sector, Prescott said. With interactive teller machines, for example, bank representatives can serve customers from anywhere at any time. No longer are workers tied down to the same desk on the same schedule daily. Now, the industry could, for example, build a culture that focuses more on well-being, where workers have more agency over their work arrangements.

As more leaders in financial services understand the cascade of benefits that can trickle down from a strong workplace culture, it’s likely these culture shifts will continue. If they don’t, companies will lose out on the people they need to grow into the future, Ireland said.

“Companies need to realize that people drive businesses, people make businesses — so all that ‘soft stuff’ like culture is actually really important,” she said. “The highest performing companies…are focused on creating the right culture.” 

Organizations today are facing countless challenges to attract and retain talent. For help navigating the current workplace climate and all its difficulties, download our latest eBook that covers why it’s time to rethink work — and how to do it.