CASE STUDY OF TWO FINTECH ORGANISATIONS OPERATING IN THE UK AND COMPARING THE IMPACT OF LEADERSHIP ON THESE ORGANISATIONS

Introduction

This case-study is based on two fintech organisations in the UK such as Starling and Atom Bank to discuss leadership and management perspectives. The key focus for these two chosen organisations is employee motivation, organisational effectiveness, and change management. 

Theories and perspectives of leadership management

In the context of Starling Bank, one of the UK’s leading digital challengers’ banks is known for motivating employees and adapting to the digital culture. Ann Boden, the CEO and founder of Starling Bank is known foradapting to the changing environment of digital culture for effective online banking service in the UK (Transmission-private.com, 2023). It suggests that the leadership management of Starling Bank is influenced by “adaptive theory of leadership” on a broader aspect. According to Dunn (2020, p.3), adaptive leadership is a practical approach that helps both individuals and organisations remain agile and resilient in a challenging environment. It has supported the organisation during challenging situations and maintained its performative values in the dynamic business environment. Based on the effective leadership approach, Starling Bank has been named “Britain’s best current account in the Finder Customer Satisfaction Awards” in 2023 (starlingbank.com, 2023). Therefore, it has helped the company to remain its competitive nature and strengthen its position as a digital bank over the course of time.

Figure 1: Principles of Adaptive Leadership Theory

Source: Logrocket.com, 2023) 

Atom Bank which is known for being the UK’s first app-based bank and leveraging a digital-only culture has maintained competitive position  through effective values of leadership and management. The CEO of Atom Bank, Mark Mullen is known for being an energetic, strategic, inspiring and persuasive leader in the competitive marketplace (Michael, 2021). Based on the ability of Mark Mullen, it can be stated that Atom Bank has maintained its agile infrastructure through the values of “transformational leadership”. As per the view of Asbari, Santoso & Prasetya (2020, p.7), transformational leadership theory suggests that the primary focus of an organisation is the seamless relationship between the leaders and the employees. It has helped the company to create valuable and positive change by encouraging employees to innovate progressively in an effective manner. Atom Bank has been named as the “Best Online Lender in the UK” by What Mortgages from 2018-2021 (Atombank.co.uk, 2021). Thus, it can be stated that the legacy of the bank and its development of technology has supported its innovative values appropriately.    

Figure 2: Values of Transformational Leader

(Source: managementstudyguide.com, 2024)       

Application of motivational, team working principles and theory

Motivation and team working principles have supported the operational prospect of Starling Bank in the competitive marketplace of the UK. The team working principles of Starling Bank are focused on creating a fair, open, safe working environment with compassion, inclusion and diversity at its core (Starlingbank.com, 2024). It has helped the company in motivating employees and enhancing their productivity for further growth of the organisation. Incorporation of Vroom’s expectancy theory can help in understanding the process of motivation within Starling Bank. As mentioned by Watters (2021, p.2), Vroom’s expectancy theory suggests three components such as expectancy, instrumentality and valence which determine employee performance. Starling Bank has been flexible and supportive to its employees in order to leverage employee motivation effectively (Starlingbank.com, 2021). However, based on the expectancy of employees, their performative values have increased suggesting the nature of instrumentality and in the end Starling Bank has maintained its valence through reward and recognition. It has been reported that Starling Bank has rewarded 800 employees worth approximately £3,000, who have completed their probation (Pratt, 2020). It can be stated that the company has maintained its nature of motivating culture and team working principles effectively.       

Figure 3: Vroom’s Expectancy Theory

(Source: TITREK, Gültekin & Zembrzuska, 2018)

In terms of Atom Bank, the company has maintained a collaborative culture to motivate its employees in an effective manner. Atom Bank’s team working principles include simplicity, speed and value to enhance the performative value of the organisation (Atombank.co.uk, 2024). It has helped the company in establishing strong relationships with its customers and maintaining the progressive value of business. In order to motivate employees, Atom Bank has fostered a “four-day-week” working culture all over the UK (Atombank.co.uk, 2022). Based on the working culture of Atom Bank, it can be stated that the company has followed Herzberg’s motivation-hygiene theory to influence employee satisfaction. As suggested by Mehrad (2020, p.6), Herzberg’s motivation-hygiene theory has two components such as hygiene and motivators which suggest the satisfaction and dissatisfaction of employees. Working condition, and salary are part of hygiene factors which cause dissatisfaction and motivators include recognition and achievement which improve job satisfaction of employees. Employee assistance program (EAP), pension from 13% of salary, 25 days holiday, hybrid work culture, healthcare benefits and an annual investment of £200 for development program are part of employee motivation prospects of Atom Bank (himalayas.app, 2024). Therefore, it has helped the company to actively engage employees and motivate them for the betterment of the organisation.

Figure 4: Herzberg’s motivation-hygiene theory

(Source: Kurt, 2021)           

Contribution of effective leadership and management to organisational effectiveness

The strategic approach of leadership and management helped Starling Bank to remain competitive in the UK. Strategic objectives of Starling Bank are to deliver fast technology, fair service and honest values to the banking industry (Starlingbank.com, 2023). It reflects that the company has followed a “goal model framework” to determine the organisational effectiveness in an appropriate manner. As commented by Amyot et al. (2022, p.5), the goal model measures the goals of a company and helps in determining the organisational effectiveness appropriately. It has supported the progression value of the company in the dynamic business environment of the UK. Based on effective leadership and management, Starling Bank has increased its customer base 78% outside the UK maintaining its organisational effectiveness (whitesight.net, 2023). Therefore, it has helped the company to maintain its integrity of business and enhance the values of business strategically.

Figure 5: Components for Goal Model Framework

(Source: coachcampus.com, 2023)

Effective and leadership management of Atom Bank has led the company towards business modernisation in the UK. Customer engagement of Atom Bank has reached 70% suggesting its organisational effectiveness in the competitive marketplace (Atombank.co.uk, 2023). Based on the progression value of the company, it can be stated that incorporation of the “resource-based framework” has helped the company in maximising its efficiency  over the course of time. As suggested by Collins (2021, p.12), “resource-based model” suggests that an organisation needs to consider factors such as capital, human resources, technology, and information to leverage organisational effectiveness. In this case, the company resource of Atom Bank is online banking service and its capabilities to engage customers to gain competitive advantage. Moreover, it has been reported that effective leadership and management of Atom Bank has increased its performance materiality by 75% reaching its financial statement £2,123,000 in 2023 (Atombank.co.uk, 2023). It has supported the resilient approach of the company and maintained its ethics in the dynamic business environment. 

Figure 6: Resource-based model/framework

(Source: strategicmanagementinsight.com, 2023)        

Effectiveness of leadership and management behaviours on the impact of organisation’s mission and vision

Effective leadership and management have helped Starling Bank to maintain its mission and vision in an appropriate manner. The mission and vision of Starling bank is to deliver fast technology, fair service and honest values within the banking industry (Starlingbank.com, 2023). In order to incorporate this mission and values, leaders and managers of the company have communicated its mission and vision with clarity with its employees. Communicating the organisational vision is important as it provides a sense of direction and purpose to motivate and inspire employees. According to Klapper, Berg & Upham (2020, p.12), an effective vision of an organisation needs to be aspirational, achievable, and aligned with the organisation’s values. However, the commitment of the company to deliver efficient service to its customers has been supported by the inspirational approach of leaders. Cooperative values of leadership and management have supported the organisational value in the dynamic business environment. The well-defined organisational values can be achieved through the long-term commitment of leaders in the dynamic business environment. 

In terms of Atom Bank, the organisational effectiveness has been maintained through the active participation of leaders and managers. The mission and vision of Atom Bank is to “saving and lending at its best” to support its customers efficiently (Atombank.co.uk, 2023). Performative values of leaders and management can help in identifying the organisational problem within the dynamic business environment in an effective manner. The contribution of effective leadership within the organisational context can be maintained by fostering a positive culture of work. As per the view of Nuel, Ifechi & Emmanuella (2021, p.12), strategic thinking, ability to motivate, influence and inspire others along with team working skills of leaders decide the future prospect of mission and vision. It can be stated that leaders are responsible for articulating and communicating the mission of the company to maintain the continuous growth process. The ongoing process of communication and collaboration among team members has supported the corporate culture of Atom Bank in the UK. Thus, the organisational mission and vision is inextricably linked with the visionary prospect of leadership values in the competitive marketplace.           

Evaluation of change management regarding leaders and managers

Change management of Starling Bank can be evaluated by incorporating Lewin’s 3-stage model of change. As stated by AGYEI (2021, p.6), the three-phase of Lewin’s 3-stage model of change includes unfreeze, change and refreeze. In the phase of unfreeze the leaders of the company have analysed the external environment of the UK regarding the banking sector. It has helped the company in improvising change prospects and guided throughout the transition period to become an online banking service. In this case, Starling Bank is set to build an app-based banking service for its customers based on their need and utility, overlaid with an efficient user experience (Boden, 20023). The process of change is supported by the senior management in order to make commendable changes within the organisation. It can be stated that continuous support from the leaders can help the company to overcome resistance over the course of time. However, in order to solidify the desired change during the refreeze phase, saving spaces, science-based target initiatives are required for Starling Bank. The overall prospect of change management has been maintained by building engaging employees throughout the decision-making process and leveraging two-way communication.

Figure 7: Lewin’s 3-stage model of change

(Source: Samat, Muthu & Yunus, 2019)

The change management of Atom Bank can be evaluated based on the McKinsey 7-S Model to understand the principles of changes for the organisation. As mentioned by Moonsri (2020), the components of the McKinsey 7-S Model include structure, systems, strategy, shared values, style, staff and skills. In this case, the change management prospect of Atom Bank has taken place regarding its system, staff and skills prospect. It has been reported that Atom bank has permanently introduced a four-day working week for its employees in order to change the working system, motivate staff and enhance their skills (Atombank.co.uk, 2021). This change suggests the effectiveness of leaders and managers as their active participation has supported this change management prospect within the company. The leaders of the company have reshaped the nature of work with the positive impact of technology and flexible working hours. Facilitating this change management has been encouraged by leaders and managers of Atom Bank as the working hours of the company is set 34 hours a week (Atombank.co.uk, 2021). Thus, maintaining a performative value of leadership and management along with the company has been able to facilitate change effectively.        

Figure 8: McKinsey 7-S Model

(Source: corporatefinanceinstitute.com, 2024)

Conclusion

It can be concluded that the leadership and management of both Starling and Atom Bank has supported its continuous development process in the competitive marketplace. It has helped with the companies’ performative value and its transformational process in the UK market. The overall prospect of leadership and management perspectives of these two companies have helped in problem-solving, decision-making and strategic planning in an appropriate manner.

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