OREANDA-NEWS. There’s a lot the financial services industry could learn from psychology at this point in its evolution.

Consider where we are. The industry is in the midst of an extended period of re-examination and remediation.

It’s an outcome of the financial crisis. By necessity, we, as an industry, have challenged ourselves – and been challenged by our clients and regulators – to revisit how we operate and are structured. We have immersed ourselves in questioning our practices and philosophies, and in identifying and fixing financial system vulnerabilities, bad behaviors and gaps in risk management. The industry continues to work very hard to earn back the public’s trust.

And that’s a very good thing. We know from the study of the human mind that some level of self-reflection is beneficial, raising personal awareness of discrepancies between our current state and our ultimate goal. If that ultimate goal really matters, the theory holds, awareness of those opportunities creates a negative feeling that drives us to improve. It’s the essence of self-improvement. We have seen that in our industry, which is no doubt stronger for the exercise.

But too much introspection can be a trap. It can result in losing sight of the client and providing value to them. It can result in being unable to shake the habit of an internal orientation. And it can result in not adapting to change, which some in the financial services industry have fallen prey to.   

It’s critical to find the right balance.

At BNY Mellon, part of our transformation has entailed being honest with ourselves about what capabilities we need to drive maximum value for our clients and shareholders. We have embedded the behaviors that have helped us weather the post-crisis environment – adhering to improved means of anticipating, identifying and monitoring risk, for example – into our cultural DNA while pivoting to more of an outside-in orientation.     

We’ve been looking toward the future of finance and how changes in technology, society and market structure will enable us improve our clients’ lives through investing. That means everything we do begins and ends with the client – doing what’s right for them and anticipating how their needs are evolving. That mindset should keep us from developing the bad habit of an internal orientation.

We are energized every day by the opportunity we see in the marketplace to innovate and collaborate with our clients and to deliver world-class solutions to help them achieve their goals. Those in the industry who embrace that focus and exceed the high bar for improved industry practices and behaviors will build a sustainable competitive advantage.