Future-ready banking

Book review of Transformational Leadership in Banking: Challenges of Governance, Leadership and HR in a Digital and Disruptive World

Deregulation in the Indian economy has changed the way banking and financial services are produced and delivered in India. One of the biggest changes has been the entry of the private sector and consequent changes in the nature of competition. Bank customers are enjoying the benefits of many new products and services. During the next couple of years, the Indian banking system is expected to experience another major inflection caused by the digital revolution and privatisation of public sector banks (PSBs). 

Current thinking among public intellectuals and government advisors is that privatisation is the only way to help PSBs use their capital and capabilities to serve their customers. Once some of the PSBs are privatised, we expect the banking system to be more competitive, as the newly privatised and the existing privately-owned banks compete for market share. Anil Khandelwal in his introduction and M S Sriram in his paper on “Governance and Leadership” argue for an integrated perspective to PSB reforms — that combines reforms in governance processes, bank culture and human capital management practices. 

Transformational Leadership in Banking, an edited volume of essays, case studies and perspective papers, could not have come at a more opportune time. Dr Khandelwal brings together an illustrious group of senior scholars and professionals whose work in this volume can help bridge the gap between theory and practice and public and private. Given that the context is the most important determinant of leadership choices, Dr Khandelwal and all other contributors weave the framework very well in their papers —whether it is the impact of the digital revolution, increased customer expectations, evolving regulation, Covid-19, public policy choices, structure of the Indian financial system or the nature of emerging competition.

A high-quality edited volume is expected to bring together a diverse set of perspectives and still be able to do justice to the common theme, which in this case is transformational leadership in banking. Dr Khandelwal and 34 contributors do that very well. Though each of the 31 essays, case studies and perspective papers can be read independently, together they provide a comprehensive and integrated view of governance, leadership, people management challenges and discuss the role of leadership in bringing about the much-needed transformation in the Indian banking system.

The introduction may give the impression that the book is meant for PSB leaders, but it is a valuable reading for anyone who is interested in understanding the theory and practice of transformational leadership in banking. For example, the essays “Banking on Change” by Sushil Saluja, “Future of Work in BFSI Organizations” by Akhil Handa, “Leadership Choices in Building Better Governance” by Anujayesh Krishna, “Skilling is a New Currency” by Nishchae Suri, and “Boards Must Objectively Hold a Mirror…” by Arun M Kumar provide valuable insights for public as well as private sector bank leaders. Dr Khandelwal’s own essay titled “Banking Transformation as a Leadership Experience”, while being grounded in his experience, outlines 15 actionable insights for any leader who is responsible for transforming his or her organisation.

Part 1 includes 21 essays that are structured around four themes — Future of Banking Environment, Governance, Leadership and Human Resources. Part 2 has four detailed case studies on transformation of people processes in State Bank of India (SBI), Bank of Baroda (BoB), ICICI Bank and the Union Bank of India. Part 3 carries six interviews with some of the most accomplished leaders and professors with global experience.

If I were to identify the ideas that the book expects us to reflect upon, they include the role of culture in building the ability to stay ahead in an evolving environment and the role of learning in building capability that can help us evolve. All the case studies in Part 2 and the essays by Anujayesh Krishna, Prakash Ranjan, and Anil Sachdev and Shyam Viswanathan, in particular, discuss the role of culture in industry as well as organisational transformation. The SBI and BoB case studies highlight the role of culture in being able to bring about changes in large, complex organisations.

Another recurring theme that a reader will discover is the digital revolution that the banking and financial services industry is experiencing. Essays by Akhil Handa on “Future of Work” and Kuriakose Mamkootam on “Trade Unions in the Digital Economy” provide valuable insights for building the needed transformation agenda.

Dr Khandelwal has successfully brought together senior professionals from academia and industry to provide readers valuable insights about leadership at a time when the Indian banking industry needs to get itself ready for transformation. Transformational Leadership is a must-read for policymakers, regulators, members of bank boards, leaders in banks and financial services organisations, and researchers.

The reviewer is professor & co-founder Institute for Advanced Studies in Complex Choices