“What’s next for
financial services companies?”
“Six priorities, starting with aggressively
managing regulatory relationships.”
For financial services companies as for other major players in the national and global economies,
the last 18 months have been nothing short of epochal. We’ve been dipped into the cauldron
of the deepest recession since World War II; the absence of meaningful M&A activity has
brought exit strategies to a halt; credit losses have mounted to staggering levels; liquidity stress
has been acute; and government has become a co-owner of major enterprises through its
recapitalization efforts.
At a conceptual level, boards and management have learned in this environment that
enterprises that are not equipped to cope with change and are unwilling to address the
fears of their stakeholders operate at a competitive deficit. For our industry, these are great
lessons drawn from the Great Recession.
But what are the priorities going forward? I see six for financial services companies, but they
may have applicability beyond our industry.
First, financial services companies must aggressively manage their regulatory relationships.
Establishing high credibility with regulators is not a discretionary act.
Second, liquidity and capital are key priorities for all financial institutions. It’s not hyperbole
to say that it’s now all about liquidity and capital for the next several years.
Third, it’s imperative that we manage our human resources so that we continue to attract and
retain the best executive talent. The HR strategy must be comprehensive, and it must be geared
toward finding and incenting the organization’s current and future leaders.
Fourth, we have to rely on our great operators—the financial and operational experts that
can achieve for our companies the optimal financial and operational performance.
Fifth, we now know that we have to manage political risk by factoring it into business
decisions. Optics matter, as does an accurate understanding of legislative headwinds.
Christopher J. Zinski
General Counsel
PrivateBancorp, Inc.
Chicago, Illinois
Sixth, the shareholder rights movement is changing the paradigm of corporate governance.
We have to learn to live and flourish in an environment in which corporate governance
issues—for example, executive compensation, separation of the offices of board chair and
CEO, and enterprise risk—consume enormous amounts of time and energy.
With challenge, of course, comes opportunity, and a financial services company embracing these
priorities will be positioned to take advantage of the opportunities as they present themselves.
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