One of the topics that I started thinking about at SMB was whether we should view Fintech companies as competitors. As a result of the course, I’ve moved my thinking away from only looking at them as competitors to thinking about the whole ecosystem.
Daniel Kapffer is both the CFO and COO of DekaBank. While he tells us that holding these two roles is not unusual for the banking industry, the fact that he hails from an engineering background rather than a finance or accounting one is something that is a little less common.
Daniel shares about two big challenges of heading up these two roles:
“One big challenge is obviously in terms of the large area of responsibility. Under my portfolio, I am responsible for around one-quarter of all the employees in the company.
Three elements help me to manage this large group. The first is clear communication of goals and priorities; the second is having a strong leadership team in place; and the final point is to focus on ‘leadership rather than management’. What I mean by this is that our people should be given goals and the autonomy to determine the best way to get there, instead of being micromanaged.”
The other challenge, Daniel reveals, is dealing with misconceptions that the role of a CFO is focused only on minimising costs, whereas the COO’s job is to spend money on things such as digitalisation.
“Some people think that the two roles are conflicting, but I don’t think so. I believe that our ultimate responsibility is to maximise shareholder value. For us to do that, we also need to spend money in the right places.
So, at the end of the day, it’s a good position to be in, because I am able to judge how the decisions I make impact the bottom line.”
Continually Building Up His Skillsets
Daniel is grateful for the mix of skillsets that he’s been able to acquire and hone over the years.
He says that when he started working in consultancy, he focused quite heavily on building up systems and processes for his clients, which was where his background as an engineer came in useful.
“However, I slowly got to know about the business side of things as well, and I think the biggest value you can have in any role is to be able to understand the business you’re in, and what that means for you.
Through my consulting work at Accenture and McKinsey & Company, I ended up working very closely with investment banks, which is where my interest and knowledge in capital markets developed.”
In addition to his role as CFO and COO at DekaBank, where Daniel has been since 2014, he has also been sitting on the DekaBank Board of Management since May 2019.
For him, being a member of the board and a senior leader means that he is constantly expected to provide input, be it in strategy or operational decisions.
“After a while of doing this, I felt that I needed to turn this around and be the one to receive input and content stimulus for a change. Throughout my professional life, I have attended many trainings of mixed quality, with some being nothing more than an uncoordinated series of presentations. This time, I wanted to pursue a proper programme at a major business school. After looking around, I felt that SMB (Strategic Management in Banking) at INSEAD was the right fit for me.”
Challenging Traditional Ways of Thinking
Daniel says that one of the things he appreciated most about his time at INSEAD was being able to challenge traditional ways of thinking by evaluating the wisdom of ‘conventional’ approaches.
Sharing an example, he talked about some of his gleanings from a session on behavioural finance, which gave him greater clarity as to why people make the decisions they make.
“It was very interesting to see the different types of biases in decision-making. For example, people who already have a strong hypothesis on a particular problem topic, often end up looking for evidence to support their angle, instead of objectively evaluating it.
Professor Massa Massimo also made an interesting observation about loss aversion. He suggested that people who don’t like to see losses might be less inclined towards diversification, preferring to see only one (aggregated) position that is showing a gain.”
Another session that left an impression on Daniel was on asset/liability modelling (ALM) simulations.
“As a CFO, I obviously have the theoretical background for ALM. But it’s different in the real world, because you’re sharing tasks with treasury and other people. It was a nice exercise for a change, just to be able to play around with the whole simulation, by setting interest rate conditions and looking into capital requirements, and increasing the complexity each time, and inputting new economic environments.”
Out-of-the-Box Applications
Aside from the course content, Daniel shares that he also found the learning style to be very practical and relevant.
“The programme focused a lot on team dynamics, and we had a chance to experience working with an international mix of programme participants. Every day, participants would be reshuffled, so that we would end up working with new teammates.
I enjoyed having coursemates who come from a mix of cultures because it just enlarges your thinking. I think that if you always keep to the same culture and environment, you will always end up with the same type of ideas.
One concrete example is how we might make assumptions on how the market functions in our home country. But then you realise that it’s very different for a lot of the other people taking part in the training and then you start to question things that you used to take for granted. So, that’s a very helpful type of interaction that I appreciated.”
Overall, Daniel felt that the scenarios discussed during the SMB programme accurately reflected what was happening in the real world and that the content was something that held a lot of relevance to his work.
“One of the topics that I started thinking about at SMB was on whether we should view Fintech companies as competitors. This was shaped by some of the questions that we discussed, like: are they really competing with traditional players like us, or are they providing services that aren’t available from us, or are they providing services to people whom we may not be serving?
I think that as a result of the course, I’ve moved my thinking away from only looking at them as competitors to thinking about the whole ecosystem. Is there a meaningful way to coexist? Are there things we can learn from them and can we cooperate on certain things?”
Just The Start of a Learning Journey
At the start of his learning journey with INSEAD, Daniel admitted that he didn’t fully know what to expect.
“My decision to join INSEAD was based on it being an institution of high reputation. I thought that that would guarantee some type of quality, but my expectations weren’t that detailed at the beginning. After completing the programme, I now highly recommend it to others, especially senior managers aiming at taking a board role.
This was my first programme with INSEAD, and now I’m looking at other programmes which can expand my learning into other topics and suit my areas of responsibilities.
In the end, I would say that SMB not only met my expectations but exceeded it.”
What Daniel has to say about INSEAD’s Strategic Management in Banking programme
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