This CEO is quietly transforming banking from within

Whichever way you look at it, banks have a poor reputation for customer service. Over the last few years we have seen leaders prosecuted and stripped of their honours for exposing customers to risk, mis-selling scandals, and no end of failed innovations. As Oliver Prill, CEO of Tide, recently noted, it is too easy to blame regulation for this: the reality is that broader cultural and leadership issues are often the root causes.

What does delivering outstanding customer service — and the leadership to deliver it — involve? Part of the answer might be found in an often-ignored part of the UK’s banking infrastructure: clearing.

ClearBank is a bank that helps other banks make payments on their and their customers’ behalf, in real time. It also holds other banks’ cash on behalf of its customers. In a little over 5 years it has made remarkable inroads into the UK market, with over 80 financial institutions live on its platform and a further 100+ awaiting onboarding.

Key to this rapid growth, according to ClearBank CEO Charles McManus, was that the bank he co-founded had to be ruthlessly focused on identifying and satisfying customer needs from day one — a far cry from the shareholder-first mentality of most banks. “We always knew that it had to operate efficiently, but more importantly it had to offer a real-time experience to our end customers. It had to be real-time, it had to be scalable, it had to be uber cyber-resilient and had to be able to deal with large volumes of data without compromising security,” he says. 

The key, McManus claims, was to focus on embedding and scaling a ruthlessly customer-centric culture from the start. “Our 110 developers — all of them — are physically located with our other functions. Whenever we are working on anything, they bring customers in [to the discussions] as early as possible, and constantly, relentlessly iterate.” Build it, try it, check and cross-check it, iterate, then release, is a way of working that is now deeply embedded in the culture, he says. “And if things go wrong, we’re not going to blame people. That just slows everything down.”

McManus believes that a machismo culture has hindered innovation in banking. “I’m not a saint but I’ve seen so many of those clichés in the banking world. People can be quite brilliant in relation to trading environments, but they’re A-types and when challenged they completely lose it,” he says. But such behaviour distracts from the job of identifying and satisfying customer needs. “I would manage them by saying, ‘When you’ve calmed down, we can have a rational conversation and we’ll get this sorted out.’ I’ve almost treated them like children, like bullies on the playground. I am not a fan of bullying.” 

McManus tells a story about one boss attempting to fire him three times in a week, only to be “rehired” when the numbers went up. “You learn how to actually adapt in building trust in relationships,” he notes, drily.

This points to a broader truth. In my practice, we believe that behaviour is almost always driven by underlying incentives that are either egoic or financial in nature. When looking to change behaviour, it is vital to identify what incentives might help or hinder this process. McManus agrees with this approach. “In terms of year-end bonuses, I get assessed, as all the team do, based on my behaviour. Was it wrong in any way? Did I make any mistakes in terms of the culture?” Bonuses get adjusted accordingly. So, behaving in ways that have customers’ needs firmly at their heart is financially rewarded. This is not a characteristic of most big bank incentive schemes, or the egos that drive them.

Of course, Boards will talk about culture but not actually exhibit the required characteristics themselves. This is not always their fault, McManus believes — there are many potential distractions. “The danger many financial services organisations face is that with all the governance, the regulation and the compliance, it becomes a luxury to talk about the business”, he says. “The advice I would give leaders is that, come what may, it is essential to find time to talk about the strategy and the customer value proposition, and extract all the benefits you can from the experience of the people around you.” 

And, come what may, those benefits need to be felt by the customer. “It’s simple,” says McManus. “Customer first, solutions first — and everything else comes into play to support that.”

ClearBank CEO Charles McManus three tips for leaders

1. Focus on the customer first — and always.
2. Scale the culture by embedding the right values and behaviours from day one, and incentivising people to stick to them during periods of growth.
3. Ensure that your Board carves out the time for strategic conversations — it is surprising how many don’t. 

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