Building on two years of a strategic learning project, this report addresses the question of how banking professionals can transform financial institutions from the inside, so that they better serve society and the planet. The report coins the term, ‘systemic intrapreneur,’:

“An employee seeking to transform a [financial] institution from within by aligning strategy, operations and culture with positive social and environmental outcomes.”

To achieve the purpose of creating positive social and environmental outcomes, the Finance Innovation Lab outlines four prerequisites. A purposeful bank must be:

• Democratic – a transparent and accountable financial system, where all people can participate in the rule-making and institutions that shape it
• Sustainable – a financial system that helps meet society’s long-term needs and supports human flourishing on a thriving planet
• Just – a financial system that promotes diversity and equality and protects human rights
• Resilient – a financial system that provides security and stability for all, and for the real economy

Therefore, a fit-for-purpose bank that ensures positive social and environmental outcomes is one that:

• Has a clear organisational purpose grounded in long-term benefit to people and planet
• Embeds this purpose at the core of its strategy, operations and culture
• Is grounded in the real economy, building strong relationships of shared prosperity with clients, customers and communities
• Transparently establishes and reports on targets for maximising its positive and minimising its negative impacts
• Establishes effective governance frameworks which lock its purpose in and facilitate accountability
• Embeds these principles in a diverse, equitable and collaborative culture where employees are empowered to make purpose-aligned decisions that deliver real impact.

According to the The Finance Innovation Lab, systemic intrapreneur’s are required to help facilitate the transition from unfit-for-purpose bank to one that serves society and the environment.  To enable purpose in the banking environment, they:

1. ‘Scale deep’ – understanding the interdependencies of organisational outcomes and moving down the corporate structure to destabilise status-quo
2. Collaborate with those involved in connected leverage points to achieve a shared outcome
3. Seek to instil transformative mindset change by embedding attitudinal shifts and power dynamic restructures within the organisation
4. Seek influence in the [bank’s] external context to create an enabling environment for internal change

The three common archetypes of a systemic intrapreneur are:

• The pioneer – the doer, [banking] professional that is directly working to create change
• The champion – the safe spacer, often in management or senior leadership roles that can defend the work of the pioneer and influence policies
• The guide – the enabler, often in roles related to organisational transformation, they forge strong relationships of trust and have broad networks

These three archetypes can work together to embed systems change in the [banking] industry, through embedding purpose into organisational strategy, structures, relationship models and mental models.

1. Sustainable or purpose-driven change does not occur in silos and requires systemic organisational uptake.
   
2. Systemic intrapreneurs are those looking to transform a financial institution from within by aligning positive environmental, social and governance outcomes to business strategy.
   
3. There are four leverage points to create change: strategies - business model inputs; structures - resource allocation and governance flows; relationships - organisational networks; and mental models - mindsets, culture and values.
   
4. Since the 2015 Paris Agreement, 35 global banks have invested $2.7 trillion into fossil fuel companies, twice the size of their sustainable investment commitments.
5. Between 2008-2018, only 10% of bank lending was directed into the productive economy with the rest invested in property and financial markets.
6. Less than half of globally significant banks’ capital is deployed to the real economy compared to 70% of values-based banks within the Global Alliance for Banking on Values.
7. Since the financial crisis, North American and European banks have been fined $372 billion in penalties for regulatory offences, misconduct, anti-competitive practices, money laundering, LIBOR manipulation and mis-selling such as PPI.
8. In 2018, the number of complaints to the Financial Conduct Authority about harassment, bullying and homophobia jumped by 220% despite breakdowns in whistleblowing processes.
9. United Nations Sustainable Development Goals provide a useful proxy for what collective goals the banking system should exist to facilitate. The UN SDGs are seventeen interconnected goals creating a globally recognised blueprint to achieve a sustainable future for all.
10. There is a pressing need to transform mainstream banking so that it meets the needs of individuals, communities and societies within planetary boundaries. Collaboration is required to work toward a democratic, sustainable, just, and resilient financial system.