12 reasons why more cultural intelligence is needed in the finance industry
| By Sue Bryant
Why is cultural intelligence a skill needed in the banking and finance industry?
Banking and finance is a global industry. It follows, therefore, that anybody working in this sector should be able to communicate effectively across cultures.In finance today, cultural intelligence is as important as one’s IQ or emotional intelligence. Technology means different markets communicate and work together without ever having to meet – but this does not take away the need to know why decisions are made, and why people react to situations the way they do.
Cultural intelligence doesn’t just apply to working with offices and clients in other countries. There are different cultures within a company – sales, technical, R&D, compliance, marketing – and usually, within any given team, given the multicultural nature of banking and finance today. Customers, too, whether corporate or individual, are multicultural – and the company that can talk to these customers in their own language and style should have an advantage over competitors with a one-size-fits-all approach.
12 reasons why cultural intelligence is vital to the financial sector
- Cultural intelligence helps develop an in-depth understanding of working styles in other cultures. A culturally intelligent workforce will demonstrate better tolerance, trust and understanding of global colleagues. Cultural differences become strengths in problem solving, rather than obstacles, while improved collaboration drives the ability to respond quicker to market changes.
- Local partners, customers and outsourced divisions will become colleagues and friends, with cultural intelligence, rather than an obstacle to success because of their differences.
- Cultural understanding will develop the sense that one method doesn’t work for everybody. In the west, for example, performance-based pay is common in the financial sector. In Asia, reward is seniority-based.
- Cultural intelligence is even more important when working with emerging markets, as management style and expectations may be different. These markets, successful in their own right, do not necessarily consider the head office way of doing things to be the right way.
- English may be the global language of finance, but the importance of emerging markets mean important points could be lost in translation when using a different language. Cultural competence will help individuals understand tone, body language and context when working in another language.
- Culturally intelligent individual gains trust. By assimilating into a local culture, immersing yourself in its ways and mannerisms and mirroring the gestures of those around you, you will appear more empathetic – provided you are genuine. You are unlikely ever to become just like the locals and think exactly like them but with an open and enquiring mind, learning to cooperate internationally can be learned.
- In an industry where corporate entertaining plays a big role, local culture should never be underestimated. Whether you are throwing a banquet in Dubai, taking clients to a rugby match in Hong Kong or playing golf in Japan, cultural intelligence will go a long way and help you avoid social gaffes.
- Culturally sensitive leaders make better managers. They are able to better understand the dynamics of a multicultural group in a meeting, for example. They are better at negotiating with other cultures, and at conflict resolution between cultures.
- Cross-cultural training is essential for globally mobile employees and their families; it will reduce culture shock and make the individual more effective and better poised to integrate with their new workplace.
- Multicultural marketing is an important element of banking and finance. Understanding the individual consumer or the corporate client and meeting their needs is all part of cultural intelligence, whether dealing with customers who are LGBT, Hispanic, Asian, mature or millennial. Finance is an emotive issue and every culture has its own approach to the topic.
- Being culturally aware helps individuals to recognise areas of their own communication that could be improved, to make their daily interaction with international colleagues more effective, and more enjoyable. How emails and memos are worded, for example, and whether and why, with some cultures, face-to-face brainstorming is preferable to a WhatsApp group.
- Attracting top talent is essential in a competitive marketplace. Companies that celebrate diversity, inclusivity and cultural sensitivity are likely to be more appealing than businesses that are perceived as inflexible and old-fashioned in their outlook. The diversity of a company’s workplace should reflect the diversity of its market – or consumers may not take that company seriously.
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