Volksbank, the bank with a human face

Written by Luc Bretones, on 22 June 2021

The image that banks often convey is that of a traditional company. Organized in a pyramid, authority is concentrated at its top. The closer one gets to its base, the more responsibilities dissolve.

The mechanics are inevitable: employees find themselves in a constant quest for meaning, and clients retain only limited trust in their banker. Trust that should, however, be immoderate since it is to them that they entrust their money...

What if de Volksbank had found a way in the Netherlands to humanize banking?

As the fourth largest bank in the country, de Volksbank appears to be a classic establishment at first glance. This is without considering a long and unique history that sets it apart and continues, over two hundred years after its creation, to resonate within the very core of the reorganization recently initiated by its leaders. Founded in 1817, it is the heir to the regional savings banks in the Netherlands. Anchored in the local community, its social origin is its strength. It has always watched over the small savings of the Dutch and financed SMEs in the Netherlands.

The transformation that de Volksbank has embarked upon largely draws from this rich history by rehumanizing its organizational software among its employees and perpetuating the image of a local bank with its customers. Therefore, the mission it has entrusted perfectly demonstrates that it is possible to grow by having a positive impact on society and to refresh its structures while allowing its shareholders to benefit from a real return on investment.

Before reorganizing, the numerous entrenched hierarchical layers and the proliferation of unnecessary procedures cluttered decision-making at de Volksbank and hindered the establishment of trust in customer relationships. The bank's leaders realized that giving it a human dimension would, above all, require a redistribution of authority throughout the organization.

The shift from a functional hierarchy focused on a systematic risk prevention policy to self-management accompanied by transparent dissemination of information throughout the company has, in fact, facilitated a change in employee behavior and restored a human dimension to the bank. The method chosen to implement such an evolution was that of Holacracy.

Holacracy represents a fundamental upheaval in the way of working in an organization. The holacratic method indeed emphasizes team responsibility and the development of individual knowledge. In practice, de Volksbank applied the following six methodological principles:

  1. Decide based on fundamental objectives hierarchy rather than functions
  2. Organize work rather than people
  3. Define clear individual responsibility with clear boundaries
  4. Focus on consultation
  5. Move forward instead of slowing down even if everything is not yet finished
  6. Share knowledge transparently rather than hoarding it

An important change was to concretely distribute decision-making power among the bank's employees. It is no longer necessary, as in the past, to ask managers to make (more or less) all decisions. This movement has both freed up time for managers and allowed employees to make decisions, daily, for themselves. This practice is based on a common understanding of a team's objective and how it contributes to de Volksbank's overall goal, as well as guiding principles that help define priorities: it is the team that knows best and not an individual.

A good example of this practice concerns mortgages. Colleagues in contact with clients for this type of loan no longer need to consult the back office to decide whether to grant it. For many clients, assessing their solvency can now be faster and done in direct proximity.

With the implementation of Holacracy, traditional hierarchies fall, power is no longer the prerogative of a few: small teams self-organize into circles and each is responsible for its own domain. Usual procedures are abandoned to accelerate decision-making, which is tailored to the customer. Risk management and mistrust are no longer at the center of decision-making processes: everything is done in the light of humanity.

The predominance of trust is reflected in the framework of the agile transition that the company has recently initiated. After reorganizing, de Volksbank set out to strengthen and renew the trust that customers place in it... along with their money.

De Volksbank's agility is thus found in the wide autonomy left to teams, which are fully independent and entirely responsible. The stated goal has been achieved according to its employees: the relationship with customers has significantly improved and is firmly at the center of its employee teams' concerns.

The desire to address the difficulties encountered by its customers to have a positive social impact is concretely reflected in strong actions. Now, for example, de Volksbank no longer resorts to debt collection agencies when a client is late in repaying their loan.

De Volksbank is resolutely bringing the banking sector into the new generation of companies, to the delight of its employees and customers.

For another story of Holacracy deployment at GRDF, click here!