Future-Proof Your Bank’s Leadership: Hire and Develop for the Role, Not the Individual

Regional and community banks are at a crossroads. With roughly 4,000 institutions serving as pillars of local economies, many are confronting the need for organizational restructuring to grow. A major part of this change will be how banks approach talent. The big question for CEOs and board members is this: Are you going to continue to build roles around long-tenured employees and their skills, or are you ready to shift to a strategic model where roles are designed around the precise capabilities their bank requires? 

In many regional and community banks, the traditional practice of molding roles around individuals—often those who have been with the bank for decades—can lead to misaligned or overgrown organizational structures. As banks grow, this results in bloated hierarchies with CEOs managing 12 to 15 direct reports, which in turn stifles strategic decision-making and impedes leadership development. Instead, roles should be defined by the skills and expertise needed to succeed in today’s competitive landscape. For example, while smaller banks may have relied on generalists in the past, growth beyond a certain size demands specialists—especially in areas like risk management and credit diligence.

It’s not just about who banks hire; it’s about nurturing the talent already within their organizations. There are several ways to do this:

This can take the form of rotations, targeted training programs, and cross-functional exposure.  For example, a smaller regional bank we work with rotates their C-suite leaders to give each exposure to other elements of the business. The CFO is now the COO, and the GC is acting as CHRO. This depth of role rotation is also a business differentiator and may help to retain talent (and attract new talent if needed). Another option is to pair emerging leaders with seasoned executives to accelerate their development and transfer critical institutional knowledge. This not only strengthens leadership pipelines but also bolsters collaboration across the organization. 

Do we have the right people prepared for future roles? If not, is it time to bring in external talent? Benchmarking against best-in-class leaders ensures that the team’s capability aligns with both regulatory expectations and market demands. Additionally, conducting regular skills assessments helps identify gaps and opportunities for growth, ensuring the leadership remains adaptive and resilient to industry changes. 

Structured and continuous coaching can help leaders refine their skills while assessments ensure alignment between individual capabilities and organizational goals. Regular feedback fosters a culture of growth and adaptability. This combination of bespoke development and long-term succession planning can pay off in a big way. One larger regional player we have worked with has realized the promise in unlocking new value by investing heavily in its existing leaders to give them the tailored development they need via coaching and team journey work, which has resulted in both a well-rounded and highly functioning C-suite and long-term succession plans for key roles.

In an industry where banks are more commoditized, the competitive advantage comes from the people behind the services. Digital innovations may differentiate some aspects of banking, but it’s the leadership that creates lasting impact. And to achieve high leadership goals, CEOs and boards must view talent development as a critical investment. The decisions to both hire for the role and to develop leaders who are uniquely suited to drive your bank forward ensures that your institution is not only prepared for tomorrow’s challenges but is also positioned for sustainable growth. 

Whether your bank is small or scaling rapidly, be purposeful in designing roles that reflect your evolving needs. Build a leadership team that is agile, forward-thinking, and capable of steering your organization through uncertain times. The future of banking depends not on the products, but on the people.