IN RETROSPECT: The implementation of MiFIDII and how we helped our clients deal with the people-side of Change.

Background.

The effort at regulating capital markets in Europe has brought with it substantial reforms. Implemented in 2017, the “MiFID” (Markets in Financial Instruments Directives) legal arsenal was quickly reinforced with new provisions. In a nutshell, MiFID II seeks to strengthen both external and internal controls / reporting, enhance investor protection as well as market transparency, and reform market structures.  As the investment industry is undergoing a major facelift, MiFID presents banking actors with challenges that call for a solid Management of Change. What is at stake is long-term sustainability and readiness for change. A partner of choice throughout the transition, NEXUM has put its expertise to work in a number of ways sampled in this post.

The challenge.

The implementation of MiFIDII has led private banks to implement operational changes and make strategic choices related to their business model/operating model.

These structural and organizational decisions have had, depending on the type of entity concerned, an impact to a greater or lesser degree on working routines, ways of communicating, interacting and negotiating. Investments Advisors and Private Bankers providing consultancy services were first in line. What started as an implementation challenge of MIFID II framework thus quickly became a human challenge.

Partnership with NEXUM.

Combining its core expertise in the area of organizational change with a solid background experience in the banking sector, NEXUM was commissioned:

• to infuse changes and strategic choices operated in the wake of MiFID II with meaning and to engage the people (Awareness Building)

• to develop the desire to change among impacted people whose working routines are expected to undergo major transformations (Desire)

• to foster new skills and an ecosystem conducive to their deployment (Knowledge and Ability)

• to ensure deep-seated change through appropriate reinforcement activities (Reinforcement)

Application.

NEXUM supported several Private Banks thanks to a practical approach towards equipping people (in particular Investment advisors and/or wealth managers) in the face of change. Aligning impacted populations around a compelling story of change was crucial to lay a solid foundation. The ADKAR model lies at the heart of our interventions and allows us to optimize all of the key steps required to make any strategic or operational change a lasting success. 

Awareness & Desire:

The first step was to set up the context by raising the awareness on the accelerating pace of changes that affect the banking landscape, starting with regulatory reforms. More specifically, these changes called for a major revamping of existing entities, a redefinition of the value proposition, including expanded expertise and new approaches on working with clients. The core mission here was to identify ways to turn MiFIDII and its implications into opportunities for all stakeholders, clients, the bank and professionals themselves. Likewise, and given that change happens one person at a time, mapping out the impact of strategic choices on every position or job was an important facet of the mission. It was only when each and every person truly understood the personal implication of change (what’s in it for me) - and was allowed to voice fears and hopes -, that we moved on to the next actions prescribed by ADKAR.

Knowledge and Ability:

Halfway through the process, NEXUM conducted workshops aimed at:

• Reinforcing the position as Investment advisors or Wealth managers to develop services with high added value, and deepen customer relationships.

• Delivering sensitive messages about Mifid II to the client in the most effective way.

• Managing resistance and possible conflicts with clients by identifying and understanding resistance types (imaginary or symbolic).

• Defending trade margins in a transparent environment by using appropriate negotiation techniques (rational) and tactics (behavioral).

Results.

NEXUM has addressed people-related challenges by building Awareness among impacted staff on the nature and rationale of the change, as well as the risk of inertia.

We created a space of expression providing impetus for discussions about the personal implications of the change (What’s in it for me) so as to drive individual engagement.

Upon completion of these first important steps, we trained members and promoted the development of new skills to turn the implementation of MiFIDII into a long-lasting success and a genuine competitive advantage.