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Change agent

By Chris Atchison | April 30, 2015
Change agent
Victor Dodig, President and CEO of CIBC

When Victor Dodig took over as President and Chief Executive Officer of Canadian Imperial Bank of Commerce in September 2014, the veteran financial executive understood the opportunities and challenges that lay ahead.

Canada’s fifth-largest lender by market capitalization and revenue, with assets of $415-billion, CIBC posted record revenue of almost $13.4-billion in 2013 and continued to bolster its reputation as one of the country’s most innovative financial institutions. Yet Dodig took his new role facing significant external headwinds. Think sweeping regulatory changes poised to reshape banking worldwide – and existential questions swirling around the relevance of traditional banks and the best strategies to retool in response to rapidly shifting consumer needs and demands. In other words, the industry faces a period of unusual flux and disruption. The rules of the game are changing, and competition from non-traditional players such as online lending platforms is putting pressure on otherwise reliable financial business models. 

That’s why Dodig – who joined CIBC in 2005 after serving as CEO of UBS Global Asset Management in Canada, as well as Managing Director in Canada, the U.S. and the U.K. for Merrill Lynch & Co., Inc. – pays close attention to any potentially disruptive threat. “I think you ignore them at your peril,” he says. “We’re following some of the innovative technology players and what they’re doing to disrupt or participate in our industry. I think that it’s really driven off of what customers are looking for. It’s important for us to stay on top of that.”

Dodig aims to keep his firm on the cutting edge: Toronto-based CIBC was the first Canadian lender to introduce PCs at the branch level, install ATMs and launch online banking. But he insists that the introduction of any new technology platform or service be done with a focus on customer service. “We need to realize that technology is a way of strengthening the customer relationship,” Dodig says. “If we can be that innovative bank while strengthening the relationship with our clients, we’ll be even more relevant than we’ve been in the past.”

That said, a major test for any Canadian bank emerges when trying to manage client relationships across the generational divide. Technology is changing so quickly that different demographic groups are interacting with their financial institutions in increasingly divergent ways. Some older baby boomers might shudder at the thought of banking solely online, for example, while venturing into a branch might be a foreign concept for a 20-something Millennial. Those demographic contrasts make it tough to bridge the service gap to suit cross-generational expectations, let alone for the majority of CIBC customers who bank across multiple channels both in person and online. That explains Dodig’s determination to study how customers interact with CIBC and to keep making service improvements that cater to their varying needs.

Then there’s compliance. The introduction of Basel III, a new set of international rules designed to prevent the kind of banking turmoil that ensued after the financial crisis of 2008-09, will put pressure on Canadian banks to adopt a range of globally standardized compliance measures, from capital and liquidity requirements to stringent leverage ratios, by 2019. It’s enough to give any bank CEO pause, but Dodig welcomes the changes. He thinks they might even provide a strategic advantage to forward-thinking financial institutions. 

“They force you to be much more disciplined about where you choose to spend to improve the client experience,” he says. “We’re looking at the percentage of revenue we’re spending on growing our bank and improving client experience, rather than just simply enhancing core legacy systems.” That means investing in technology to increase bank digitization, reinforce cyber security measures and improve core in-branch technology systems, among other high-tech priorities. 

For these plans to succeed, Dodig needs CIBC’s more than 44,000 employees to buy into a shared vision. When it comes to leading and motivating his army of staffers, Dodig prefers a collaborative approach over the more traditional command-and-control style. In his view, setting the conditions for employees to thrive and succeed, then allowing them to share ideas on business improvement and growth, are critical steps toward attracting and retaining the kind of talent that can take CIBC into the future. 

“We need to create the environment for people to know that they can excel,” he says. “Someone asked me recently whether you can be an entrepreneur working at a bank. I said, ‘We’re a regulated business. But can you bring great ideas and make them happen? You absolutely can.’ We just need to let them know that it’s not a bunch of staid people leading the bank, but that we’re looking for their ideas, we’re trying to draw them in.”

Every CEO faces major hurdles, and Dodig is the first to admit that he’s no different. The seasoned banker was hired to implement his vision while posting healthy profits and delivering shareholder-friendly growth, and he plans to deliver. “I always tell our people, ‘We can evolve our culture and strengthen it, which we’re doing. We can get out there with clients and engage with them, which we’re doing. But if we don’t deliver the results, it will all be just an exercise.’ That’s got to be a great big focus of ours, and it will be. The sustainability of what we deliver, the earnings growth that we deliver, will help us do more of what we need to do with our business.”

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