The Evolving Role of a Bank COO

The talent crunch for financial institutions doesn’t stop in the IT department. Increased regulatory pressure, liquidity challenges, and margin shortfalls create pressure to have the right individuals to guide a community bank. Perhaps the most critical position in a financial organization today is that of the Chief Operating Officer (COO). And these individuals face a wide variety of challenges.

My near-daily interactions with C-level executives in community and regional financial institutions has provided a perspective and opportunity to witness the many changes to the bank COO role – one key transformation is that managing the operations staff and evaluating performance metrics are now just one element of that job. 

Today’s bank COO must understand current risk management drivers and levers, work closely with the sales and marketing side of the organization, continuously enable change, be sensitive to the outsized influence of social media, and help the CEO strategize. 

Above all, the COO must collaborate and partner to extend meaningful influence far beyond the physical walls and traditional, local footprint. 

Understanding all elements of risk management

A COO is responsible for day-to-day administration and operations and engages with all banking enterprise functions to ensure the business is running smoothly at all levels. 

Typically, the COO is more hands-on than the CEO and can help identify operational gaps that minimize enterprise risk.

I’ve found that savvy COOs strike a thoughtful balance between their organization’s efficiency and resiliency. Greater efficiency can lead to greater profits when things go well, but resiliency and redundancy is an absolute requirement to minimize systems failures.

Linking with sales and marketing

Along with risk management, today’s COOs must routinely take the pulse of the institution’s marketplace. Staying tuned to trends helps a COO anticipate desirable or even “gotta have” products on the horizon. 

As the back-office becomes “the front office” – helping to drive top-line revenue growth – the COO will be called upon to make strategic contributions to the bank’s growth strategy. 

For example, COOs can collaborate with CIOs to unlock key customer insights from data stored in operational systems, treating data as a differentiated asset, and creating a more relevant customer experience. 

Enabling change

In an article in the Harvard Business Review, author Nilofer Merchant notes: “Culture will trump strategy, every time. The best strategic idea means nothing in isolation. If the strategy conflicts with how a group of people already believe, behave, or make decisions, it will fail.”

Often, most of the staff within the bank report up and ultimately to the COO. Rapid shifts in regulation, customer needs, and technology require almost constant change. 

As a key leader, the COO must embrace change and establish a culture that supports effective change management. The people using new tools and technology are more important than the tools themselves. This can be difficult, but the marketplace can be harsh, and is certainly unforgiving, to organizations that fail to evolve and adapt. 

A recent blog from Accenture observes, “The shift is really blurring the lines between the COO and the CIO, even to the point of a bank having a hybrid COO-CIO role, where the executive running operations also runs technology with an eye on how the bank’s internal apps play externally. While the CIO ultimately will always ‘own’ the underlying technology and ensure a cohesive ecosystem, the COO needs to drive the decisions to modernize operations and help choose the best-fit, most relevant technologies that enable the bank’s goals.”

Understanding social media

Social media gives executives a high level of access to a wide range of stakeholders. It also offers unparalleled insight into the opinions and trending attitudes of consumers. 

A Pew Research Center survey found that 72% of Americans use social media. How else could a social media-savvy bank executive reach so many prospects and customers without leaving the office?

Prudent COOs I work with understand the potential negative consequences of bad reviews or fictitious rumors on social channels. Quite often unfortunate experiences or false rumors can be nipped in the bud before they become viral. 

A bank COO must keep an eye on the social channels of the institution – and have a ready-response team ready in case of emergencies.

Partnering and collaborating

With these wide-ranging challenges to address, COOs must leverage relationships to help them educate themselves and then prudently guide their organizations. Close collaboration with key leaders on the bank’s staff is critical, as communication must flow freely, and critical conversations must occur as needs dictate.

Outside the bank, vital technology partners can help educate C-level executives and serve to accelerate learning with seminars and conferences of peers to share information efficiently. Like successful sports teams, the best head coaches are efficient delegators and communicators, and so too are the best COOs. They set the course for successful, independent financial institutions.