Recently, BNP Paribas Securities Services published a report entitled “The Future COO” which explores the changing role of Chief Operating Officers (COOs) in financial services based on a survey of over 250 COOs globally. In a Q&A, Simon Olenka, Regional Head of the UK and Middle East, formerly Head of Client Delivery UK at BNP Paribas Securities Services, explores the top findings of this survey and how this C-level role is evolving today and amidst wider industry changes.
Q. About the survey, can you share why you conducted this survey and how many participants were included and from what regions?
A. At BNP Paribas we have partnered with hundreds of COOs over the years across financial services, and work with them both in their day-to-day supervision, as well as helping them to transform their customer and client experience. We observed that in recent years, the role of the COO has changed and expanded significantly, from one focused on operational control and budgetary management, to a role that is more and more complex, with COOs expected to generate change and drive their businesses’ digital transformation. We wanted to find out how COOs are adapting to their changing environments, what the future COO will prioritise, and the resources and internal/external relationships they will need to do so.
The findings are based on a global survey of 250 COOs across both the buy and sell-side, and from a range of geographies and workforce sizes. This was split evenly across the UK (25%), North America (25%), Continental Europe (25%) and APAC (25%).
Q. A top finding was the more COOS see a key part of their role now involves driving growth opportunities and delivering transformation change projects. Why is this change happening now? How does the role today compare to previous COO roles including duties and functions managed? Why are some of these trends more pronounced in APAC?
A.COOs’ increasing focus on growth and transformation is largely connected to the increasing pace of change both in financial services and the wider economy. COOs have an important role in ensuring their businesses are responding to changes in their clients’ environments, as well as adapting to the opportunities presented by technological innovations such as AI and blockchain.
Our survey showed two areas in which this trend is particularly pronounced: asset manager COOs globally (51 respondents) showed a stronger desire to focus on growth and transformation than any other segment. 59% told us that ‘delivering change and transformation’ would be one of the areas they spend most time on in future. Asset manager COOs face a challenging landscape with changing needs of digitally-savvy, younger investors, continued fee pressure, new regulatory requirements and the rapid emergence of investment trends such as ESG and passive investing. So, our survey shows that asset manager COOs see themselves in the driving seat in responding to these changes, and transforming their businesses to compete in this new environment.
This focus on transformation was also particularly strong in APAC. This was also reflected in how APAC COOs wish to be perceived; ‘Chief Change Officer’ was the most popular alternative job title, the only region where this was the case. A reason for this could be the rapid growth in the region, as COOs recognize that they have a key role in driving their businesses forward and grasp new opportunities.
Q. Will this change in role influence other areas of the business as the focus is less on operations? Is this change indicative of a wider change such as the general shift from regulation to growth?
What was clear is that closer cross-functional collaboration will become essential in future. In our survey the vast majority (79%) of COOs told us they want closer collaboration with other functions, especially with IT and technology departments– even though they already rate their collaboration highly.
I’m pleased that COOs across the market have this vision, because ultimately the role is about connecting external clients and internal staff. At BNP Paribas, for example, we’ve combined our operational, IT, change and programme management teams under the umbrella function ‘Client Delivery’, both at a global and regional level. Our equivalent to the ‘COO’ title is ‘Head of Client Delivery’, and this sums up perfectly what we aim to do – to deliver above and beyond client requirements, including all of the internal investment and transformation necessary to make that happen”
Q. Upskilling is a top priority among COOs. Can you explain more about how they plan to do this and why?
A. One of the most fascinating discoveries from our survey is that developing their workforce will be top priority for COOs in future, above and beyond implementing or upgrading technology. COOs often have more people reporting to them than any other C-suite leader and a wider range of employees with different skillsets (80% of COOs surveyed have two or more functions reporting to them). So they recognise the importance of ‘the human factor’ and understand that in future, it is their people and not just their technology that will give their firms a competitive edge.
At BNP Paribas in the UK, over the last 18 months we have really focussed on career development, through talent development programmes, career ‘surgeries’, and better definition and support of different types of career path. Traditionally, this might have been seen as something for HR departments, not the COO. But having the right people, with the right motivations and the right reporting mechanisms in place, is key to managing the business on a day-to-day basis. That frees you up to spend more time looking at the future, and delivering change.
Q. Looking to the year ahead, what do you think will be the biggest priority for COOs as their role evolves?
A.Our survey has shown that, across financial services, COOs see their internal and external relationships as key to their future success. Already in 2020 we are experiencing significant volatility in the market and challenges to traditional working methods through the spread of the coronavirus. COOs will play a pivotal role in leading people through these circumstances, ensuring that their businesses have robust measures and controls in place. Close collaboration with other departments, enabling and motivating a workforce who may be dealing with great pressures, and detailed understanding of client needs will all be vital for COOs this year, so that they can ensure the delivery of service for clients as well as driving their business growth.