Transcription: Auke Leenstra
This is Leaders in Finance, a podcast in which we look for the person behind the success. We are talking to the leaders from the present and the future about what drives them, both in their careers and at home. Why? Because in the financial sector, we should be more open. First, a great thank you from us to our partners in this podcast for their support. They are: Interim Valley, FG Lawyers, Odgers Berndtson executive search and Roland Berger. Our guest in this episode knows the financial world and especially Citi like the back of his hand. Citi is, as our guest explains, a truly global organization. It’s almost like what they say about the navy; join the Citibank, see the world! “I have people that I track in of course London, but also New York. I’ve got two in San Francisco, I’ve got one in Johannesburg, one in Shang Hai and Dubai. So that just gives you a sense of how we think and how we work.” And our guest has been around the world too. New York, London, Prague, Casablanca, Zurich and now Amsterdam. Fluent in French, he’s been working at Citi for some thirty years now. Mind you, back in the day an assignment in Casablanca was quite different from today. “And in those days, maybe it’s hard for younger bankers to understand that now, but there was no head office, there was no e-mail. You communicated via telex. So you were in charge; whatever came across that day was your problem.” All that and our guest plays the cello too, and might one day join an orchestra. “And I’ve been in moments where I’ve played absolutely extraordinary beautiful music on amazing podiums with that group of people and when it comes together it is pure magic.” Let’s talk to Auke Leenstra, your host is Jeroen Broekema!
Jeroen: Welcome to a new episode of Leaders in Finance! This week we are in Amsterdam at the Dutch Banking Association offices with Auke Leenstra, the country officer Netherlands and Benelux at Citi. Welcome, Auke!
Auke: Thank you!
Jeroen: Thanks for taking the time to talk to us!
Auke: Happy to be here.
Jeroen: Wonderful! To give a short introduction on Auke’s background, the following: Auke’s the country officer Netherlands and Benelux for Citi. Also, he’s the head of Banking for Citi’s European bank. His career has been at Citi for the last 28 years with eight postings in six countries, from New York to London, to Prague, Casablanca and Zurich. The last ten years, he has been in Amsterdam. Next to his job, he’s chairman of the FBA, the Foreign Bankers Association. Also, he’s on the board of the Dutch Bankers Association and on the board of Fund1818 in Den Hague, a philanthropic endowment. Auke studied political science at the VU University in Amsterdam and did another master’s degree in international relations at Columbia University in New York. Auke is 53 years old, married to a French wife and has two children. That gives us a little bit of an overview.
Auke: That’s me!
Jeroen: That’s you, wonderful! Auke, could you take us a little bit more into Citi, to start? Explain a little bit more about Citi global as well as Citi Benelux/Netherlands.
Auke: Good, I’d be happy to. I’ll probably indeed start global, then Europe and then Netherlands. Citi is the one and only global bank. And when I say global, I really mean global. Close to a hundred countries, 200.000 people. And in most of those countries, from Russia to the Philippines and Australia, we will have been fifty to a hundred years, including – bringing it to Europe – Europe. We are actually the most European bank there is, as in we’re up and running in 22 countries in Europe. We’ve got about 11.000 people in Europe. Again, excluding the UK. In the past, before Brexit, we would put them together. Today, it is indeed separate. And we have deep client relationships. So, Luxembourg fifty years, in my own world. I just came back from Brussels, to illustrate it, somebody’s been working there for 35 years. The bank has been open since 1919. The Netherlands indeed in 1964, “Schoenmaker, blijf bij je leest”, stay at what you’re good at. As in, we always deal pretty much with the same clients. So the largest global clients, global investors, global corporates, the governments and we don’t seek the publicity; we think we’ve earned our credentials. Indeed, the numbers are staggering. So on a daily basis four trillion dollars will go through our pipes. And in Europe, slightly more technical, we’re the second biggest clearer of euro’s. It would surprise you; you would think that European banks, if you will, would have that position. But it just gives you a sense of our size and scale. And indeed, it is global in our thinking as well. Our leadership is international and although our parent sits in the US, it feels very international. That’s Citi.
Jeroen: That’s a great introduction! And if we look at the different stakeholders from a Benelux or Netherlands perspective, how many people work here for Citi? For example in Amsterdam?
Auke: We’ve got about 85 people in the Netherlands, growing fairly rapidly. By the way, we’re not unique in that. Foreign banks, as a rule, oddly in the Netherlands, it’s quite a unique situation grow. Why do we grow? Because our clients are growing. In their position, they’re growing globally, they need our help globally. Be it in emerging markets, be it nearer by. We seem to be doing more things right than wrong. So our position with those clients grows. Indeed, they are deeply institutional relationships. I had the pleasure in 2005 to celebrate 100 years relationship in Zurich with Nestle. Not that unique. A few days ago, bankers from the UK came to me saying “Oh, I’ve got this other client, we’re going to celebrate 100 years. How do you do that? What is the best way to do it?” That’s how we think, that is the longevity of our relationships. In the Netherlands, it’s quite an international and a growing group of people; 25 nationalities. All the young people around. English is the main language, there is a lot of Dutch as well. I will say that those bankers, think of a large multinational or a large pension fund and you can fill it in, those tend to be Dutchies and they tend to be here a little bit longer. Or they are indeed what is known within Citi as the flying Dutchmen or the flying Dutchwomen. So they join in Citi in Amsterdam and then it’s like the navy. Join the navy, see the world. They literally fly out and they come back, like the parodical son or daughter. I think today I have people that I track in of course London, but also New York. I’ve got two in San Francisco, I’ve got one in Johannesburg, one in Shanghai. There was one in Hong Kong who just came back. And Dubai. So that just gives you a sense of how we think and how we work.
Jeroen: So very much focused on the long term. And if you look at yourself, you’re almost thirty years with Citi. What do you think are the main drivers that people stay for such a long time with the Citi Group or bank?
Auke: It’s a question that comes up a lot. It really is, and I don’t have an easy answer to it. It does mean that if you join Citi, there’s something that connects you to it and you apparently fit. We are quite a unique organization. I think the other way around, as a bank we are pretty high in empathy. So we really care. We are a caring organization, potentially more than other banks. Which maybe explains indeed why people want to stay. Earlier this week, I introduced the country head in Belgium to our local team and indeed, he was astounded to see how long people stay within the bank. It is basically practice, yes.
Jeroen: From a client’s perspective, what are the specifics of a client of Citi here in the Benelux?
Auke: Size, globality. As a rule, that also means you probably are the top three player in your industry. So take any industry all in gas, consumer goods, chemicals, take the top three players and they’ll be our clients. That’s the first thing. And indeed, they need to value the globality of what we offer. At the same time, they also need to think longer term and in the variant, but that’s almost a given, its values and reputation. If you add them up, you come to our client list. I will say, we’ve probably been a bit too selective in who we’ve worked for too long. The base needs to be broadened. We think there is a tremendous amount of companies that benefit from our services but our starting criteria was simply very high. And that’s good, because it’s where we are adding most value. But on the long term, we think we can add value to medium sized companies. When I say medium sized, think of half a billion to two billion or so.
Jeroen: I read an article in my preparation in the Dutch Financial Times about exactly this point, that you also want to serve not only the largest of the largest, but also one layer below that. But is it really that you look at the turnover or another metric that determines size and you say “This could potentially be a client”, and that’s it? Or do you also say no to a lot of potential clients?
Auke: We’re going to find that out. We’ve just launched that business. In the end, I’m looking for clients that lead in their individual industries. If they do and they grow – and I can name a few in the top of my mind that I’ve spoken to in the last two years, as we prospected and established the validity of the business model – there are tremendous amounts of companies I have deep respect for. Probably also some family-owned companies that would obviously not be visible to us early on. And I’ve made many discoveries, including cold calling is hard. I also realize that by the time we got to the table of the CEO/CFO of that company, they said “Where have you been? It is time, I need to grow, I need to drive efficiencies. I’m looking for ideas.” So I’m very encouraged about what’s ahead. The last thing I will say, we need to be quite cautious and careful who we bring in. We build long term relationships, if we get that wrong it wouldn’t be good for them and it definitely wouldn’t be good for as well. So we’re going to be building it up and it’s like learning a new language and building a new muscle. It really is a new way of going about banking. And it’s quite energetic.
Jeroen: But let’s take an example of a fast-growing fintech, like Adyen in the past, they probably could be a client now, given their size. But if a client like that is maybe at a point where they have a hundred million turnover, it would not be a client for you? Or would you scale with them?
Auke: It’s incredibly apt that you say so, because they are. Like I said, building a new muscle, learning a new language, we are active with those companies. I’m not going to name individual clients, but you can imagine one or two fintechs that we probably work with and we look back saying “Why weren’t we there five or ten years ago?” We have a lot more confidence in our ability now to choose, to add value. We’re looking for companies in that space and we are building a business quite rapidly, that usually have one or two funding rounds behind them, they should not come to us for funding. They should come to us to scale up, to scale up internationally. I’ve got a business model, I’ve got an idea, I’ve got a structure that works help me go fast, help me to go global fast. And that’s what we do really well. At the same time, growing companies, selling businesses, raising new funds, that’s the next leg that we’ll be developing. But again, it’s quite energizing to get into the client’s segment. It’s a new skill that we need to learn, but we see we add value. People come to us and say “Where have you been?”
Jeroen: In some countries, you’re also large at completely different areas in banking, retail in the US. Has that always been a very clear strategy to not do that in the Netherlands, for example?
Auke: Yes. When we do retail around the world – and I say ‘do’, but actually I should say ‘did’, because we’ve announced the sale of many of our businesses, particularly in Asia – we’ve always aimed for the upper side. The ultimate high net worth is in the private bank. We have a very powerful and not very visible private bank. What you mean indeed by retail, we have a strong cards franchise, a credit card franchise in Asia, in Russia and other parts. But we realize the connectivity between those countries. So our retail bank in Indonesia and one in Russia, what is the connectivity? And it wasn’t so much there. It’s an attractive piece of the world, there’s a lot of money flowing into the upper middle class, which is where we are active. But we also realized that if you’re up and running in a hundred countries, it’s pretty complex to manage. So you have to make some choices. It’s an attractive place to be, it brings a lot of complexity, so our incoming CEO, Jane Fraser, recently made the decision to divest in a number of retail markets. Doesn’t mean we’re leaving the country, it’s almost impossible to think of us leaving the country, we simply don’t. But the retail business we’re divesting at the same time we believe the US, our home market in many ways, we might be, as publicly stated in some businesses, blow scales, doubling up there.
Jeroen: We spoke a little bit about the clients, a little bit about your colleagues. The regulator, it’s something I read in an article where you spoke about gold plating. I don’t know if it could be interesting to talk a little bit about that. Is that still the case? So gold plating is used here as a term where European directives, for example, are put into Dutch legislation where maybe the Dutch legislator adds some things or takes as strict as possible. Is that still something you would say is happening?
Auke: Let me say the following: I have to explain the Dutch to people outside of Holland. I usually talk about the two sides to our DNA. There is the minister, the wagging finger, ‘Thou shalt not’. That’s part of our DNA. And the other part of our DNA is the seafaring VOC, conquer the world, make money. And both are in us. That’s what defines almost being Dutch. The regulator, that’s where both come together, but particularly first ‘Thou shalt not’. I have yet to meet a regulator who doesn’t have the best intention, they really do. And they come in with a passion and they say “We really want to get to this desired result and here’s how we do it.” They also operate in a political environment, so they also have an eye left and right, if you will. And you then have a result, the Dutch regulator will do that, the French regulator will do that and the Italian regulator will do that. What you then have is a patchwork of well-intended slightly different, always different in every single country. So again, we work in 22 countries, we need to apply a single AML-regulation. What you really want as a European regulator is a data leg that is uniform, that you can mine and you can get the best results out of. Instead, what you get are local data pools that are just a little bit differently. So for us, and I know I speak for myself but also for my colleagues and competitors at foreign banks, we do sometimes suffer from the different application rules, again, with the best intentions. And the word ‘gold plating’ has a double meaning. I think people do want to get the best desired result, but it’s not effective. It doesn’t really lead to the desired result, and that’s a discussion we have. I think we’re getting in a better place, there is a new regulator coming on a European field in AML and that is a welcomed development. We’ve asked for it, to be frank, for years. And now, here it is. So we see the European banking product finally coming together or almost coming together. And that’s good, because clients operate internationally, banks operate internationally and that’s the direction of travel.
Jeroen: Just to be sure that I get it right, you would say “Ultimately, we’re kind of strict in the Netherlands”? Is that the answer as well?
Auke: We are. And as much as yesterday, when I in a Citi-forum explained a little bit more about the businesses that we have here, the clients that we have here, I also talked about truly assortative regulators, smart, on the money, on the ball. But truly assertive and in the end, it’s about: What desired result do you achieve as a regulator? Do you obtain what you want? What is the best way to get that? That’s a dialogue we have with them and that will probably stay with us. Gold plating, it’s okay to use that term. It draws out the dialogue and it draws out what people’s underlying motivations are, be it in Den Hague, be it at the regulator. And of course, the regulatory debate is shifting more and more also to the ECB, so that’s another field where we’re active.
Jeroen: I like to shift gears a little bit and start talking about you, Auke, as a person. Maybe we can go all the way back to how you grew up. Are there things you want to share with us about how your youth and your upbringing was?
Auke: I know I will, because that’s part of this discussion. I’m a fairly private person. I’ll probably say things here in public more than I even would have said in the office, maybe because the question wasn’t asked. But I’ve been blessed with my youth. I grew up in a small village on the coast in a happy family. A few things have always come through my family, hard work, incredible honesty, church, music has always been a part of my life. I think at some point you develop a sense of confidence. Not self-confidence, but confidence that makes you open to the world. And that’s really what I think my parents gave me. And indeed, also that sense of the former generations. And sometimes, we still talk almost in presence tense terms about people that were obviously two or three generations ago interestingly not just my Dutch family, but also my wife’s French family. So that carries across. So that was my youth.
Jeroen: Was your youth always like, as you said, hard work and honesty, these values? Or was there also time for leisure whereas always focused or was it competitive?
Auke: My parents were traveling quite a lot and I thought it was completely normal. In hindsight, that was not normal. So we’ve been to Romania in the mid-80s or in completely different countries. So getting on a plane and discovering something new feels incredibly natural to me.
Jeroen: Was it for work or was it all tourism?
Auke: That was tourism. And indeed, my eyes opened up. That whole interest in east central Europa, maybe a slight digression, staying in east central Europe I saw the East-German communist system before the wall came down from two sides. I saw it from the dissident side, it’s a strong word, the resistance really wasn’t really there, dissidence. But within the churches there, there was a sense of resistance to the norms, to the communist regime. But then a few years later, I was asked by my university to study three months in the Humboldt university in Berlin, which was the bastion of the communist party. And this is where the winners were living and breathing, had success in the communist regime. So I’ve seen both angles to such a regime and it opened my eyes to justice and injustice. With hindsight, it was quite a formative moment to live behind the iron wall and to see how people deal with justice and injustice.
Jeroen: And if I’m pushing the boundaries too far, we’ll edit this and take it out, but are you willing to share what your parents did for work?
Auke: Sure. My mother is a doctor and since then, there have been lots of doctors around. One side of our family is nothing but doctors. My father describes himself as a futurologist, a sociologist by training and thinking very, very far away. Which is something that I on a good day recognize in myself, it’s nice to look at what’s way beyond the horizon. And he’s a very observant man, he writes extremely well. He’s written books, he’s written another one very recently. So writing well and observing well and having an opinion, that’s something I grew up with.
Jeroen: That’s very interesting! You went to study political science, right?
Jeroen: Do you remember why you chose that?
Auke: No idea! And the other day, I asked my parents “Do you remember?” They didn’t really. And actually, it didn’t look like a great career move, but they let me go with it and I had no idea. I had four brilliant years. Political science in Amsterdam wasn’t overly demanding, it gave me lots of time for music. So I spent four years in an orchestra and living in a house filled with musicians. And I have nothing but great memories, I must have learned things. It’s not entirely apparent to me what it was, but it were wonderful years.
Jeroen: Did your parents expect a lot from you or were they fine with every choice you would have made?
Auke: I guess so. It didn’t quite come up. It was quite natural, I guess they saw that I was happy. I did go to the VU, which was important, and helpful to them. Because that is a university that they would be close to.
Jeroen: From a religious perspective?
Auke: Yeah, indeed. But other than that, it just evolved.
Jeroen: What was your student life like? Music was very important, what was your music taste?
Auke: I play the cello. Musicians are an interesting bunch. If you’re a musician at a decent level, it means that you can actually put your mind to something but you also enjoy working together. And if you truly see an orchestra coming together, once in a while I look at a CEO of a company and I think of an orchestra and a conductor. I’ve been in moments where I’ve played absolutely extraordinary beautiful music on amazing podiums with that group of people. When it comes together, it is pure magic. To this day, the moment I leave Citi or something else happens, I’ve had enough or they’ve had enough of me, who knows, there’s tremendous music waiting for me. Because as a musician, I’ll give it two minutes and I’ll stop. People ask me “Why don’t you pick it up again?” And I still play, not every evening but quite often. I can’t commit to a string quartet or an orchestra because if you’re a musician, you have to be there. You can’t say “The client this, the regulator that. The board this”, you have to be there. And I cannot make that commitment. So, it will come, whenever it happens, I’m looking forward to it. But music is also a way to unwind. I guess people say it’s like golf; you can’t play it a little bit. If you’re distracted, it doesn’t go anywhere. So you truly meditate.
Jeroen: And still cello?
Auke: Still cello.
Jeroen: Did you consider to study higher education in music?
Auke: I was never good enough and I was so glad. I’d much rather be an average banker than an average cellist. Because an average cellist has a really tough life and an average banker goes by just fine. It came up at some point, it was completely unrealistic. And now I have the benefit of no pressure, I play exactly what I want and when I want it. The level is debatable, but I keep in the running. I stay in the running for getting back to music at some point.
Jeroen: And the passion for music came from family, from your parents?
Auke: Absolutely, indeed.
Jeroen: They play as well?
Auke: They do, and I’m surrounded by people who take it very seriously. It’s a passion but I’m glad I chose banking.
Jeroen: You gave the passion to your kids as well?
Auke: Yes, indeed. There are genes that have gone into and many things repeat themselves. You just need to be careful not to be too expecting, to replicate exactly what you saw and what you have a passion for. But it looks good.
Jeroen: Are there particular moments in the approximately 0-25 years of your life that you remember very vividly, that have been very important in your life?
Auke: It really would have been East-Germany. I have the idea at some point to write a book. Again, I need to be retired. But the things that I saw there, in hindsight they led me to the writers where I said “Why do I enjoy those books?” Now I remember. It’s about justice and injustice. It probably is closely linked to political science; how do systems work? Who are the winners and the losers? How do values come into it? So that really is what must have driven me. Even career-wise. Who would have thought that knowing something about East-central Europe was of any value in banking? Completely unlikely. And then the wall came down. And then Citi started opening up its businesses in East-central Europe and they asked “Who wants to go to Prague?” That was an easy decision. I had learned Polish in university in New York. It’s completely lost, but it gave me just a bit of an understanding of the language and it felt completely natural to operate in that part of the world which I had a feeling I had a good sense of. So I don’t necessarily do these things because they’re career-wise important; it was simply something that I found interesting and lo and behold, in a bank like Citi, there was a place to use that talent.
Jeroen: I’ll definitely come back to how you got to Citi, but I’d first like to ask, you went to study in the US, how did that come about?
Auke: Well, like most big decisions in life, organically and with hindsight, no idea how that happened. I was a tourist in New York, who wouldn’t like it? I enjoyed it and said “How do I find an excuse to come back?” So I literally knocked on the door of Columbia University and I found a summer course, so I did one summer course there and then decided “This is it.” The next year, I applied. With hindsight, I never knew the odds were stacked against me. I applied to exactly one university, which was stupid. But I didn’t know, I was fearless and I didn’t quite know what I had thrown myself into. The application process is a serious one, with the tests and letters etcetera. But with hindsight, I’m pleased it came together because it was a pretty high risked strategy.
Jeroen: What do you remember about that time there, what did you learn?
Auke: I made very good friends. I have made friends for life there that I’m still very close to. They’re all American, none of them live in the US, actually one oddly enough against expectations came back. The other thing I learned too was critical thinking. Again, political science; I needed to learn a little bit of hard skills. I would have suffered even more than I did in my junior part of the bank without the hard skills. But critical thinking, there was one course that I still remember to this day, which was the oranges of the first world war. In a nutshell, there was a brilliant professor who in the first week convinced me that it was all about family relations, because all the royal families are related. And I said “That’s it! Got to be that.” Next week, forget about that. It was all about the mobilization schemes, whoever would mobilize the army first would win. Next week – and you can imagine – forget about it, irrelevant. The real reason was… And it went on and on. So the sheer brilliance of it, but also “Don’t take something at face value. Look at it critically, and then of course at the very end, it all hangs together.” But it was brilliant.
Jeroen: But you didn’t stay in the US after that master’s degree?
Auke: No, for some very practical reasons, visas. You were not supposed to stay. So I did work there for nine months. The first job was indeed in Citi. I technically left the bank and four weeks later rejoined in London. But it was very practical; it was hard to find a job.
Jeroen: Because you wanted to stay?
Auke: I didn’t quite have that idea. Again, the big decisions in life aren’t necessarily taken so practically. I loved what I was doing there, then something came up in London that looked like fun, which was to become an analyst in a group of European peers to me. The rest is history. I didn’t go there to say “I really want to stay”, I’m pretty European. I’m unlikely to work in the US, I’m pretty happy where I am.
Jeroen: That big decision to go and work for Citi in New York or interning, how did that come about?
Auke: Completely random, as all big decisions. I didn’t know what I did not want to do. So I had done internships to understand that I didn’t wanted to work in diplomacy, so I didn’t do an internship in the EU delegation at the UN.
Jeroen: Why was that, why you didn’t want to go there?
Auke: A bit formal, it was hard to measure the output, it was more about hierarchy and it was hard for me to get my mind around that. The second one was in a political thinktank which I thought was fascinating. But again, the output was more who said it, rather than what you said. So no surprise; the politics mattered. And then I came across the bank, just had a glance at it, if you will. And how it practically happened is that I think my university sent my resume to Citi; I don’t think I did. There was a connection at that interview and “When can you start?” So there was not a lot of thinking around it. With hindsight, I couldn’t have gone to a better bank because to join a global bank was just fantastic.
Jeroen: And it’s very interesting, you pointed out this statement a couple of times, that things are pretty random, that they happen. It’s interesting, because a lot of people in these interviews actually come to this point, not as explicit as you are, but you hear it from their choices. A lot is just pretty random. And sometimes, like you said, with the benefit of hindsight, you can see why it happened. But is it something also that is typical for you, that that is how you look at life?
Auke: I don’t quite know. I think in the early days, you have this fearlessness and silliness that you don’t quite know what you’re up to and I would be a bit more thoughtful about it now. I had no downside, I had no responsibilities, I had a student debt and that was it. Yes, I might have fretted about “Will I find a job and where will I go?”, but the downside wasn’t so significant. It would be different now. I’d probably be a bit more thoughtful about things now, but with hindsight indeed, you give yourself opportunities by being at the right place at the right time and then a lot of it is luck. It really is.
Jeroen: How were your first managers? Were they important for you?
Auke: There is one that stands out, he’s still within Citi. He is now in the executive committee in New York. We met in Prague; he stands out. He’s been my boss, we’ve worked together first in Prague, then I was in Africa when he was in Africa, then in Europe again. And it’s just nice when somebody knows you so well, with your strength but also very much with your challenges. He’s an impressive gentleman, one of the very few people, some people say they have it, but I know he has it, the ability to look far and wide but also grasp to detail. I can’t, and many other people cannot. Many people lose the detail, and to be frank, that’s okay. But he is one of the rare people who still have that. So he is a shining light in that sense and I wish him well.
Jeroen: That’s great! What were the most important learnings from those first years at Citi for you?
Auke: Again, it sounds crazy, but just go with the flow, see what opportunities you run into. When I first ended up in Prague, it was about helping the business grow and put some structure to it, put a strategy out for them and start writing research. In every job that I got, be it back in London, emerging markets strategy and in Casablanca, the reason why I went to Casablanca is probably because I was the only person speaking French. I was horribly underqualified.
Jeroen: Because of your wife?
Auke: Exactly. So I was horribly underqualified, but because of my fearlessness I didn’t quite know it. You only realize it when you land there. And in those days, it’s maybe hard for younger bankers to understand that now, but there was no head office, there was no e-mail. We communicated via telex. So you were in charge; whatever came across that day was your problem. So it was a great learning, I don’t think I would have the energy today to do that again. And indeed, go with the flow and see where you add value. If you realize at some point – and everybody’s different – I lose interest at some point, it does need a change. Then if you’re in an organization where there’s enough opportunity, before you know it, something else pops up.
Jeroen: Were you ambitious?
Auke: I don’t know. I don’t think I’ve ever set out a goal. I don’t think so, I’m competitive, sometimes, but small things. So at a game, I want to win. But it’s not necessarily the same as being ambitious. I look back at the moments when I truly enjoy my job and still say it sometimes, I catch myself saying out loud “I love my job.” It doesn’t happen every day, but it does happen. When our franchise had a one-on-one discussion with either our regulator or a client and I’m truly taken into their trust and it’s a one-on-one discussion, I’m like “I really got to the essence of it. I asked a few good questions, I didn’t say too much in the beginning, then I started speaking. Before you know, you really are treated like a peer.” That is my moment. I don’t know if that’s ambitious, but it makes me feel really good.
Jeroen: Another thing I wanted to ask you, you’ve lived in many countries, you’ve worked with pretty much every culture in the world, given the sheer size of the business you work for, how do you look at the Netherlands? Did that change because from a semi-outside perspective?
Auke: The Netherlands is an amazing place where the American culture that I do live and work in comes together. What I like about the American culture is the optimism, the drive, it doesn’t want to accept mediocrity and speed, which is simply very pleasing. But it also comes with something that I think the Netherlands is very good at, solidarity. Intolerance of egos, which I think is a fantastic thing, how we come to decisions and also that we give everybody an opportunity to really debate and get an input. So those two things come together. And that to me is the Netherlands at its best. So the Netherlands from the outside comes back to what I said earlier, it’s about that wagging finger, people do have values. At the same time, the success of this global company is extraordinary. We sometimes underestimate how well this country has done, the businesses it’s build, the influence it has and I like that. It’s that sense of modesty that some of the Dutch players still have.
Jeroen: You’re definitely very modest about your own role and choices! When you motivate people, when you want to get things done in your teams, what is your way of leading people to a certain direction you want to go to with your teams?
Auke: Before I go there, management philosophy is a big word. But whenever you have something you want to get done, in the end, if I look back what I’ve done, I try to surround myself with good people. I try to make sure that they work well together and I do indeed give them a sense of “Here’s where we’re going.” It sounds really simple, but it’s incredibly hard work. Particularly in getting the best people; you’re competing for the best talent, many people have many opportunities, they have ambitions, they have ideas. And just making them getting the right people and keeping them close. So I spend a lot of time talking to them, they are all self-starters, they are highly professional. But still, just getting a sense of what’s in their mind. Not with all; it doesn’t always work with everybody; I need to be very clear. But most people, you establish a sense of what they stand for, what they want. Then there is a level of trust and then you let them indeed, where you have to, try to make them work better together. And, in the end, a little bit of excitement. Right now, for instance, sustainability. I’ve been organically grown into somebody who leads some of our thinking around how to drive sustainability in our European business model and how to work with clients. It’s obvious to get excited about that; it’s not hard to get people excited. But we have such fundamental questions and there are so many basic things we still need to get our minds around and it’s just liberating people’s thinking, “How about this? How about that?” So, asking short open-ended questions always leads you to the real matter. Don’t tell too much, just asking questions. And indeed, in the end, if you put two or three good people together in a room, you’re always going to find some solution. So it sounds easy, but it’s a lot of hard work to get and keep the best people. We’re still upgrading our bench every time we can, that is the American side of my firm. But when it’s there, I look at it and I smile.
Jeroen: Is the talent you are encountering now different from ten or twenty years ago? A different mindset, for example?
Auke: Yes. First of all, the level of quality we see coming in, I’m so pleased I’m not competing with today’s entry class because I would not be here today. Just the level of hard skills and what they’ve all produced is simply impressive. There’s a generation that’s growing up with iPhones, so they expect everything to be perfect, to be instantaneous and to be excellent. And twenty or thirty years ago, it was just not like that. So people who are data-driven who want things to be working immediately, that’s the spirit I want to see. Of course, the other part is purpose, so people want to impact things. I haven’t had it yet, but I sometimes talk to people I meet in Holland, some junior walked up to me after six months and asked “Am I having enough impact?” Come on, six months? So don’t take yourself too seriously as an entry-level person coming in, but down the line, try to have that impact. And in the end, what we try to still attract and what hasn’t changed is that level of adventure and the international side. We’ve always had those people coming in and they will always be with us.
Jeroen: And from a salary perspective, we’ve seen a lot of articles in the media recently about banks raising salaries to get talent in. Is that still very important for people that work with Citi and other banks like yourself?
Auke: I don’t know. It’s something we talked about quite a bit in our leadership team as well. I don’t think people join us for the money, they join us for the opportunities. And people leave, but they don’t leave a job, they leave a bad manager. I don’t know what the truth is, I do think that banks still ask a lot, maybe too much from juniors. When I look around at my level of seniority, I see people around me who are competent, professional, driven and resilient. Meaning: you can pile it on and they will deliver. And that’s not a good way of going about it. So I think the new generation rightfully looks for balance. That has changed. And I hope that they succeed and change banking from within. The overreliance and resilience have been a bit costly, I think. And the new generation will be more balanced and they are already growing up in the ranks, I can see it happening. I saw it in Covid; the way people look after each other in Covid, the empathy, the balance, that was a good sign. So I think the new generation is going to succeed.
Jeroen: That’s very optimistic, that’s good! We always have a teaser and a pleaser with this podcast. On the teasing side, I’ve written the following down, and I’d love to hear your opinion about it: American banks are better equipped and are better in understanding the global banking play and will therefore always be more dominant than their European counterparts.
Auke: If I look at dominance, and you’re saying the European counterpart, that has been there factfully for the last few decades, if I’m being truthful. There is a thought of school that says that the US home market is very attractive, which is a natural advantage. It is indeed unified and it is attractive, so I do believe that is a natural advantage. But what I will add to that is economies of scale. Once you have a certain size, you’re top three in a product, you’ve invested in technology, you have the talent and the underground resource to be able to keep it up and running and to keep it in line with expectations of clients and regulators, you become almost unbeatable. It’s hard indeed to overcome that advantage, as long as you are local. There are some American banks, I’m looking decades back, not all the seniors had passports, so they really looked at it from an American point of view. That only goes so far. A client in Malaysia or in France, they will see it and they will recognize it. That doesn’t build long term sustainable relations, so you need to be truly local and have an international management team, which we surely have. So if you bring those two together, you have a pretty much unbeatable mode of defence of your business model. I can’t speak for all American banks, I will say the facts seem to suggest indeed that American banks have a strong position. But I can only speak for the European banks, and I’m making that point wherever I go, complete the capital markets union, complete the banking union and you have truly a unified European banking market. And then you pretty much have that same level playing field from which American banks maybe potentially benefit. And then all bets are off.
Jeroen: To follow up, I also spoke for the series with the former president of the Dutch central bank, Nout Wellink, he’s on the board of the largest bank or one of the largest banks in the world, the Chinese bank. Don’t quote me on the exact number, but hundreds of millions of clients, I think 500 million plus. If it is purely size, then they will take over in banking globally.
Auke: Not quite. Size is indeed 500 million clients in China. How does that travel when you meet and sit in front of a French client?
Jeroen: As a home market, as you said in the US?
Auke: As a home market. I think long term it’s hard to underestimate the power of the Chinese banks. As a matter of fact, I’ve seen in our own foreign bank association the power of the Chinese banks. They come up in sheer weight, they’re patient, they build and I’m certain they will succeed. If nothing else, because of the weight of the Chinese economy globally. But they’re also growing locally. I do think they are doing the right thing. They are complimentary to many things. I can only say, if clients want to work with Chinese banks, that is for an obvious reason, because they apparently offer something they can get there. Long term, it’s where things will go, but like I said, you do need to have the local expertise to be truly rooted and anchored in a country. That takes time.
Jeroen: Yeah. The other follow-up is from a European perspective. What would you say to a large European bank that really wants to have an even larger global presence, what they can learn from the American banks?
Auke: That’s a really interesting question. Learn from the American banks. There is one thing that is innate to America as a country, but also in its banking system and bank switches take action immediately. We’ve seen the impact of the financial crisis, not Covid, but the financial crisis, which the US in a radical fashion dealt with. Which gave them of course a massive opportunity in the upswing. So just act quickly is the one thing I would say. Decisiveness is indeed not always Europe’s strength. Who am I to say what Europeans banks should do? But if I look at the differences, I think that’s maybe one fundamental difference that when the ships are down will probably make a difference.
Jeroen: On the pleasing side, we always ask the same question, that is: Do you like to read? If so, are there any particular books that have been influential to you, or that you like to give to people?
Auke: I read copious amounts, but books far too little. I read FD, The Economist, but books– I do find myself rereading certain books. They are pretty much all by Solzhenitsyn, and I think you have a Russian literature knack, but he wrote about the Soviet Union in the 30s, 40s and 50s. With hindsight, I realize why that triggered me, because I’ve seen it myself. How do you operate human frailty in such a system? And of course, the beauty of the language. But the book I give to people, to juniors – I’ve stopped doing it because I don’t deal with juniors immediately, and there’s almost too many of them – is a book that was famous in the 90s, in the city particularly. It’s Liar’s Poker by Michael Lewis. And it still literally makes me laugh out loud, it is basically about a young bond trader that goes into the entry class during the crazy days of 80s banking with all the accesses, everything you do not want to see in banking. So egos, money bullies, lack of client value, all of these things, but it was a fascinating time. Again, the way he describes both as an insider but also as an outsider how the bank developed and how banking developed, I think it’s just hilarious. But I’ve given it to juniors to say “You need to know this. This is how not to do it.” And, at the same time, I think people need to have read a book like that because it’s a classic. But I must admit, I’m coming up to thirty years, I think people don’t know that book anymore. Maybe you do, I don’t know.
Jeroen: It has been mentioned a couple of times during this series.
Auke: Liar’s Poker, pick it up.
Jeroen: So you spoke about juniors and what tips would you give them? People that start in financial services today, or are in their first few years, what would you say or what would you recommend?
Auke: There is not one single answer, but I get that question from juniors that at some point introduce themselves to me and they ask if I have any tips. I remember hearing myself say the other day, two things: Ask good questions and keep asking questions, because that’s for the long run. If you keep asking good questions, you will change the bank, you will first of all perform better yourself, but you can really make a difference. And in the end, really simple, keep your promises. Just do what you need to do and do it well. Because whatever you do makes a difference to somewhere down the line how you deliver for a client, the level of service, the quality, the excellence we do, so just keep your promises. Sounds simple, but it’s pretty hard work. I will do this analysis, I will do it tomorrow, I will do it by this time, I will deliver this report. Just do it and keep your promises. But in the end and down the line, developing yourself, developing and changing the bank from within is asking good questions. Because that’s how you change banking.
Jeroen: Is it easy for you with all your experience to see who’s going to do well within the bank after you’ve met them only maybe an hour?
Auke: Oh, yes. I still remember interviewing one or two people, there was one person who I said I’ll probably end up working for her down the line. The interview does bring out a lot. There’s one question I always ask, so if I give it away now future interviewees will know it. But when you come to the end of an interview, and people feel the tension ebbing away and they’ve done okay, then I do ask them “Generally speaking, John or Jane, we’ve talked for a while, the odds are statistically one in three or four that we make an offer to you. Because simply, there are two or three other people. If we end up not giving you the job, you’re going to get a call a week from now that you would not get it, hypothetically, what do you think motivated us? What was the issue that you think in the back of your mind you’ve listened to us talk, that could have triggered us?” And how people answer that question is very telling.
Jeroen: That is a great question!
Auke: You get extraordinary answers.
Jeroen: Any insight on what kinds of answers you get?
Auke: The ones I don’t like a lot is a smart answer “It’s a great job, great company, so you must get very qualified people.” Yeah, I know that.
Jeroen: Not very creative!
Auke: The best answers are those that go to the core challenge that I have. So maybe I’m unconvinced about their studies or whatever it is that they bring to the table. And they are able to put my mind at ease about it. But the most powerful answer was once when somebody didn’t say anything for about thirty seconds. So she totally took control of the meeting by doing that. And I said “If you are able to do that during a meeting, you’re going to go far.” So yes, it’s one thing but in the end, what do I see in people more generally? A certain fearlessness, a desire to work hard, curiosity. So the people that I mentioned in those places from San Francisco to Johannesburg are those people that had that. As they walked in, I said “Yeah, this is going to be something and they will do well.” I don’t think I’ll end up working for them anymore, because I don’t think I’ll be in it for that long. But those are the people that are going to succeed within Citi.
Jeroen: That’s great, I hope you’re not getting people now that are going to shut up for thirty seconds after you ask them this question.
Jeroen: Just working towards the end of this interview, I wanted to ask you how you’ve managed and how you still manage a work-life-balance. Especially because you’ve been living in a lot of places, you guys have kids. You’ve been working hard, I’m sure, and you still do. How did you manage that?
Auke: Mental and physical health, a lot of physical health is luck of the draw DNA. I can’t remember ever taking a sick day in my career. So you must start with strong DNA. But in the end a few things are really practical. Simply healthy eating. I run a lot, I live in Scheveningen near the beach so when I am annoyed or need to empty my mind, I will run. And then surround yourself with people that will not allow you to get bigger than who you are. So I’ve got these friends who certainly know how to put me in my place, my family does the same thing. And once you are surrounded by that, you have mental health and physical health. That said, I look back and there are indeed downsides to work too hard and too many days. You have to make choices, the hours that I am at home in the evening and particularly in the weekend go to one thing and one thing only, which is my family. And a little bit of running and a little bit of cello, but that’s it. So a lot of things fall by the wayside. Like I said, music, it will come again but not in the next five or ten years. Then you need to catch yourself when you go too far and there are moments like that. If you look back sometime from now and you make up the balance of wins and losses, there will be losses. Things will not have gone perfectly, but at the same time, your falls will have created opportunities and, in the end, you hope it balances all out.
Jeroen: Physically, you said you go out and run. Is that your main physical activity?
Auke: That’s the best one because it’s so simple to do. You put your shoes on and you’re out. So I don’t have the ability to dedicate time to go and play golf. It just takes too much time. Or things like that. Tennis will come again one day. It’s too complicated for now. Just run. I catch myself making presentations in my mind, thinking of a nutty problem to solve, preparing a discussion with somebody. And it’s just also very enjoyable.
Jeroen: Looking ahead a little bit, you mentioned a couple of times you might not work another twenty years with Citi, is there something you’d love to do from a professional perspective? You’re already doing a lot of things next to your job, for example at the FBA or here at the Dutch Banking Association. Are there particular things in your career you would love to do in the future?
Auke: Career-wise, I don’t think I’ll do the same thing at another bank. I can’t imagine that. I think I’m too married to Citi for that. I think after a while you do realize you have a sense of intuition and you ask good questions. At the board of Fonds1818, I’ve learned to see how good decisions get made, for instance about how to appoint a new director. A long way of saying that I do believe that I can probably add value in boards. But it’s a little bit further down the line. I’m 53, 54 next week.
Jeroen: Would that be a financial institution board? Or would you prefer outside financial services?
Auke: I’m smiling, because there’s quite a few people that I speak to who say never on a financial board, because it’s so intrusive and so incredibly demanding. But that’s probably me again, I like the complexity, I like the ambiguity of it, the interplay between clients, regulators, teams, the competing interests. So I wouldn’t shy away from it, but it’s probably quite a while out. Indeed, working with a company, that’s what I’ve done for the last twenty plus years, working with Dutch multinationals and Swiss multinationals, and looking at how the business model develops. Sometimes you ask good questions and then you are able to find an amazing opportunity. It’s a rare occurrence, I’m smiling now because there have been a few but when they were there they mattered. And then you become part of really in the tent of the company. That feels fantastic. So getting more of those moments would be fun. It’s a little bit further out.
Jeroen: And from a personal perspective, you’ve mentioned cello a couple of times and tennis, are there other things you would love to do further down the road?
Auke: Tennis, my family will laugh when they hear that. It’s such a long time ago, let’s forget about that.
Jeroen: They’ve never seen you with a racket?
Auke: No, it’s too long ago and I’m too ‘oud en krakkemikkig’ as my family would say. The impact people have throughout churches I find very impressive, there are so many things to do. I give some time – and I find it’s a little bit of time compared to those people that really do – there’s a lot of things that I can do immediately in that environment and I can only hope that that comes together again. And down the line, being part of a string quartet would be the ultimate dream. Ideally, if my dear sister would allow me to play with her, who’s much much better than I am, that would be fantastic.
Jeroen: Wonderful! I think that is a great end to this interview. Although I always do ask this last question: I hope I asked a couple of good questions, but is there something that you would say “Jeroen, I’d have loved if you had asked that” or something you would love to add to this conversation?
Auke: The answer is in short no; you’ve really asked a gambit of great questions. The only thing that I would add is that I would like people, particularly in the Netherlands, who are looking at finance to truly believe that adventure in finance still exists. So the idea that you get in a plane and you land in a mega city around the world, Legos, Tokyo, Mexico City, Jakarta, and you spend two or three days with some of the best bankers in the country and see clients and see a culture and a business up front still exists. Don’t give up on that, because it’s not so easy to find in the Dutch banking environment today. It still exists and I thought it was incredible opportunity. So don’t give up on that idea. And to be frank, beyond that, you’ve covered pretty much everything that mattered. Thank you!
Jeroen: I have only to thank you, Auke, for the time you took to talk to Leaders in Finance, to me. I’m pointing now to a little present for you for taking the time and being so open about everything we have covered. It’s from Bocca Coffee, which is a B-corp certified business. I’ll hand it over to you after this interview. For now, thank you so much!
Auke: My pleasure! Thank you for having me.
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