For those already serving and those who aspire to become part of the banking Boardroom as Non-Executive Directors (NEDs)

Should the title raise a bit of a curiosity, I’m relatively certain you’ll find some “but of course, that’s self-understanding” moments reading through it. The more you find them, the better.

Throughout my NED banking career, I’ve faced many questions, perceptions, and views about what a NED in a modern bank should know, what she/he doesn’t need to know, which prerequisite hiring conditions bear justifiable merit, and which exist merely as part of the search process - aimed only at narrowing the candidate funnel without true underlying logic.

I have also, at times, heard the narrative that expertise in banking should not be the key requirement for a Supervisory Board (or BoD) NED member in a future-focused bank, coupled with the view that leadership “soft skills” ultimately determine success in overseeing operations and co-creating a successful business strategy in the banking world. While there may be some logic behind such reasoning, my track record tells me that even the best-intentioned, leadership-experienced Boards need to be collectively grounded in hard-skill expertise if they want to play an impactful role in shaping how the banking operating model evolves.

Hence, I will cover this topic in two parts, attempting to describe both:
a.) know-how expectations from top-notch banking Boards and their members in today’s fast-changing banking environment, and
b.) an extract of selected rituals, insights, behaviors, and powerful questions that shape the Board’s - and its members’ - mindset. This is the mindset they need to internalize, or at least be consciously aware of, to ultimately influence the strongest pillar of value in a modern bank: its culture and the prevailing employee mindset.

Let’s start with industry know-how as the core subject of this first part of the article and discuss the necessary soft skills in the follow-up (Part II), which I will publish over the next few days.

The Hard Expertise Skillset a Future-Proof Bank Board Should Possess

The banking industry is entering a decisive inflection point. The coming decades will no longer reward banks solely for historical dominance or established position. Disruption is shaking the sector at scale and with speed. Instead, value creation will accrue to banks that can deploy precision - how they allocate capital, engage customers, deploy technology, and evolve their business models - faster and more consistently than their competitors. As a good top banking executive friend of mine says: speed, simplicity and security drive clientele demands[1]. This shift fundamentally raises the required knowledge bar for Boards of Directors or Supervisory Boards.

In this new era, a Board’s role evolves from overseeing performance within a stable banking operating model to actively co-guiding the reinvention of that model. No single Board member can embody all required expertise. What matters is whether the Board, as a collective body, possesses the right mix of deep, complementary expertise to challenge management, guide strategic choices, and ensure the long-term relevance of the bank’s future operations.

A future-proof bank Board must therefore function as an integrated capability system - not merely as a collection of distinguished individuals. I firmly believe this must be achieved alongside the following expertise areas, which define a future-proof banking model.

1. Customer economics and client centricity at scale

Client centricity is not a marketing topic. It is a core economic discipline, as simple as that.

Boards must collectively understand:

• How and why customer behavior is fragmenting and loyalty is eroding
• How value is increasingly created (or destroyed) at the level of individual customers, their journeys through the bank’s key services and products, and the joyful or sorrowful moments created by using them
• How and why customer experiences, service/product pricing, all the risks banks underwrite, and the lifetime value of clients are inseparable

This requires Board-level expertise in customer economics, not just customer satisfaction (e.g., NPS readings). Members should be able to pose questions such as:

• Which customer segments truly create economic value after capital and risk?
• Are we subsidizing growth that will never become profitable?
• How and where do digital, AI-enabled, and human interactions combine to earn ultimate trust and loyalty?

Getting the right answers (meaning extracting and using the data correctly), understanding them and acting upon them – that’s where the magic happens.

2. Precision capital allocation and balance-sheet discipline

In a world of tighter margins, higher capital intensity, and faster disruption, capital allocation risk emerges as the key risk, if you ask me. The future-proof banking Board understands capital allocation as a continuous, highly granular, and strategic process.

Collectively, the Board should be fluent in:

• Risk-adjusted return dynamics at product, client, and portfolio level
• Capital productivity and how it differs across business models, of which there are many in banking industry
• Trade-offs between balance-sheet growth, capital-light revenues, and fast-growing beyond-banking opportunities

This goes far beyond traditional financial oversight. Boards must challenge management on where capital is truly earning its cost and where it is trapped by legacy assumptions or “the normal way of doing things.” Precision in capital allocation is not optional; it is the foundation of sustainable profitability. Thorough understanding and interpretation of business decisions through a capital-logic lens will also earn you the respect of regulators.

3. Technology and AI as business model foundations - not an IT topic

Perhaps the most critical shift for Boards is recognizing that technology, especially AI, is no longer a support function. It is a primary driver of competitive advantage and industry disruption.

A future-ready Board does not need to be technically fluent in algorithms, but it should collectively understand:

• Where technology and AI can materially reshape cost structures, decision quality, data interpretation and customer engagement
• Where technological investments are unlikely to create economic value
• How and where tech or AI-driven solutions can change the speed, scalability, and risk profile of banking operations

Crucially, Boards must be able to distinguish between experimentation and value creation. Without this expertise, banks risk either underinvesting or falling behind. Or overinvesting in unfocused initiatives that never scale, merely copy-cat the mass trend when it’s already margin eroding.

4. Business model innovation and ecosystem thinking

The traditional universal bank model is under pressure from all sides: fintechs, private lending, platform players, and embedded finance. Future growth will not come from defending every part of the value chain, but from making deliberate choices about where to compete and where to partner.

Boards should therefore have a sense for:

• Business model evolution and adjacency expansion
• Platform and ecosystem strategies
• Build-buy-partner decisions at strategic inflection points

This includes understanding how targeted M&A, partnerships, or capability acquisitions can accelerate growth far more effectively than organic scale alone. A future-proof Board should be comfortable with strategic selectivity: knowing what not to do is just as important as knowing what to pursue.

5. Risk, resilience, and trust in an age of speed

As banks become faster, more digital, and more automated, risks mutate. Cyber risks, loss modeling risks, KYC/AML risks and systemic technology dependencies all rise in importance.

Boards should therefore try to master:

• The evolving nature of non-financial risks
• The tension between speed, innovation, and control
• How trust is built - or lost - through data use, AI decisions, and customer treatment

6. Value creation mindset and long-term orientation

Finally, a future-proof Board should share a common philosophy of value creation. Short-term earnings management, regulatory compliance, and episodic strategy reviews are far from sufficient.

The collective Board mindset must be anchored in:

• Long-term value creation across economic cycles
• Willingness to challenge legacy success formulas, because the past does not always predict in the future
• Courage to back transformation before crisis forces it

This is where hard expertise converges into strategic judgment. Boards that lack this collective clarity tend to overoptimize the present and underinvest in the future.

It might be worth remembering that while short-term results come from intensity, long-term results come from consistency. Ninety percent of success can be boiled down to consistently doing the obvious thing for a longer period of time without thinking that you’re smarter than you are[2].

Final Word

Hard expertise skills provide only a necessary foundation. It is the soft skills that determine how effectively that foundation is used. I will attempt to describe this Board mindset - needed to create a truly good bank (or any other organization, for that matter) - in a sequel to this article, focusing on rituals, questions, insights, and behaviors that shape a future-ready Board.

[1] https://www.linkedin.com/pulse/culture-infrastructure-missing-pillar-modern-banking-islam-zekry-2mx7f/

[2] Shane Parrish: »Brain Food«; Dec 2025

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