Financial institutions across the country are grappling with growing retention challenges in 2025. With burnout and uncertainty fueling CFO turnover, banks are struggling to maintain strategic continuity and lock in clear CEO successors. It certainly doesn’t help that global CEO resignation rates have reached record levels. Young professionals are leaving traditional finserv organizations is adding pressure, too—so the pressure is on.

Moving forward, whether your financial institution is resilient or vulnerable in the face of change could depend on the strength of your succession plan. By building a leadership pipeline, financial institutions can simultaneously remedy key drivers of retention, minimize operational disruption, and prevent loss of expertise.

The Stakes of Leadership Transitions

When leadership transitions occur without adequate preparation, the consequences can be severe and far-reaching. Financial institutions may experience:

• Strategic stagnation: Without clear leadership succession, strategic initiatives may falter, leaving institutions unable to adapt to evolving market conditions.
• Enterprise uncertainty: Investors, clients, and stakeholders often react negatively to leadership vacuums, potentially triggering volatility in share prices and erosion of market confidence.
• Talent exodus: Key personnel may depart amid uncertainty, creating a cascade of institutional knowledge loss.

Amid high turnover, which has left critical leadership gaps within underprepared organizations, many financial institutions end up scrambling to maintain business as usual. But proper succession planning can ensure stability when attrition occurs.

How Succession Planning Powers Organizational Success

Forward-thinking financial institutions that invest in comprehensive succession planning realize benefits that extend well beyond mere C-suite continuity. Here are three ways a quality leadership pipeline can support the success of banks and credit unions.

1. Institutional Resilience

Unexpected leadership disruptions can occur at any time, whether due to medical concerns, sudden resignations, or other issues. However, succession planning reduces uncertainty that could otherwise rock the entire organization and its profitability.

JPMorgan Chase offers an excellent example. Over the years, the financial institution has retained investor confidence and its position as the largest U.S. bank—and a key piece of that has been the strength of its succession plan. During the COVID-19 crisis, the company continued to operate smoothly even as CEO Jamie Dimon underwent emergency heart surgery, demonstrating strong resilience against C-suite disruptions.

Now, as Dimon and COO Daniel Pinto (investors’ favored next-in-line) both prepare for retirement, the bank’s extended list of potential successors will once again prove useful in maintaining organizational resilience.

2. Competitive Talent Development & Retention

Robust succession planning inherently involves identifying high-potential talent and providing development pathways. This creates a pipeline of leaders who already understand the financial institution’s culture, strategic priorities, and operational complexities. In fact, Cornell reports internal hires tend to be high performers. Plus, they’re more likely to stay with the organization long-term, eliminating key risks associated with new recruits.

The added retention benefits are no surprise—empowering employees motivates them to stay. On the other hand, 45% of banking professionals cite lack of career development as their reason for leaving. Succession plans ensure employees feel momentum in their own professions, not just in the organization.

3. Strategic Continuity

When leadership transitions are planned well in advance, organizational priorities maintain momentum rather than falling victim to the organizational equivalent of “starting over.” This continuity supports long-term strategic execution, so key initiatives never fall by the wayside.

Harvard Business Review estimates better succession planning increases company valuations and shareholder returns by 20-25%. That same impact could extend to the financial services sector, where timing is crucial for gaining a market edge—and immediate successors ensure organizations don’t miss a beat.

4 Strategies for Effective Succession Planning

Financial institutions seeking to strengthen their succession planning can consider several key approaches.

1. Developing Multi-Level Succession Strategies

Resilient financial institutions create depth in their leadership bench, ideally with three or more potential successors for each C-suite role. This approach not only mitigates risk—ensuring alternatives in the case of turnover or investor dissatisfaction—but also fosters healthy internal competition that drives performance excellence.

However, identifying immediate successors is rarely enough. Strong leadership pipelines are built when high-performing middle managers receive the leadership training and strategic exposure needed to continuously advance into higher roles with confidence.

2. Integrating Succession Planning with Talent Management

Rather than treating succession as an isolated exercise, leading financial institutions integrate succession planning with broader talent management initiatives. For example, they may:

• Align leadership development programs with identified succession gaps
• Create experiential learning opportunities, like cross-functional projects, that prepare high-potential employees for leadership roles
• Implement formal mentorship programs that transfer institutional knowledge

This approach simultaneously creates a culture of continuous learning that encourages employees to actively develop their own skills and grow.

3. Embracing Adaptability in Leadership Development

With rapid technological innovation and new bank compliance demands taking shape, succession planning cannot just focus on replacing current leadership competencies. It must also develop adaptable leaders equipped for future challenges. This involves:

• Identifying and cultivating digital fluency among succession candidates
• Developing leaders with change management capabilities
• Building regulatory acumen and compliance mindsets
• Fostering innovation capacity and calculated risk-taking

4. Creating Transparent Pathways

Discretion remains important in succession discussions. However, leading institutions are increasingly transparent about the competencies and experiences sought for future leaders—and what’s required for advancement at every organizational level. This communicates a commitment to creating career advancement opportunities for existing employees.

Offering formal professional development to top talent can further motivate employees to stay with the organization and signal that leaders are eyeing them for future openings.

Aligning Succession Plans with Executive Search

Even with robust internal development programs, financial institutions occasionally need to look externally to fill critical C-suite positions. An experienced executive search firm can efficiently close gaps in current succession plans—whether future leaders are still being developed, or an outside perspective is needed to remediate recent challenges and drive transformation.

At AJ Consultants, our executive recruiters specialize in the banking and finance industry, ensuring optimal placements informed by current and emerging market trends. Our continuous collaboration also ensures alignment with your culture, strategic direction, and evolving requirements. It’s why 85% of the individuals we’ve placed over the past 16 years are still with our clients.

Build a resilient C-suite with support from an executive search firm. Partner with AJ Consultants.