Considering the lengths that Goldman Sachs has gone to protect its ‘secret source’ computer code, most notably its pursuit of former programmer, Sergey Aleynikov, who it accused of stealing its code, it’s a bit of a surprise to see that the bank is embracing open source technology.
The firm last year quietly released GS Collections, source code used in its internal applications, on to open source repository site GitHub, presumably with the idea that developers would come in to suggest and implement ways of improving the code. You have to be accepted into Goldman’s own repository first, though.
But Goldman may have another incentive for rolling out an open source platform. An increasing number of investment banks are using the technique to unearth tech talent that would previously have shied away from the financial sector, said Peter Redshaw, managing vice president, banking and investment services at tech research firm Gartner in the UK.
“To some extent this is talent management – there’s still a relative dearth of technologists wanting to work in investment banking, so open platforms are used as a method of unearthing talented developers,” he said. “These people are unlikely to be full-time employees, but brought in when special projects demand it.”
Open source platforms attract talented technologists who want to improve a product, and these people have historically avoided the hierarchical structure of working for a financial institution. They also provide the chance for banks to pit developers against one another to discover talented technologists who come up with the best solution.
Deutsche Bank’s Lodestone Foundation, an open source project that encourages investment banks to share their trading software secrets in order to allow the development community to download, customise and enhance for the benefit of all, is also a recruitment tool.
As Tony McCarthy, head of investment banking IT at Deutsche Bank, said when Lodestone began, part of the motivation was to attract more ‘alpha technologists’ to the financial sector. Generation Y don’t like the corporate environment and will work on short-term projects, but often do not want to be publicly associated with working for a bank, he said. Opening up banks’ software is a method of luring in these technologists.
This hasn’t stopped the banks from trying to hire these people on a full-time basis, however. London-based capital markets firm, Catalyst Development, suggests that banks trying to engineer methods of attracting the top 1-2 percent of the IT professional population. So far, though, these attempts have largely been unsuccessful, said the research.
The Github library is not the limit of Goldman Sachs’ open source ambitions. In an video on YouTube with only 55 views at the time of writing, Don Duet, global co-chief operating officer of the technology division at the bank, said that it’s interested in “open source 2.0”. This means, among other things, that open source goes beyond software and evolves into sharing hardware.
Already, the bank has used its clout to get involved in some big open source projects. It’s a key sponsor of the Open Compute Project, which aims to share data center designs. Steven Schwartz, global head of telecoms and market data services at Goldman, was also recently elected to the board of directors at the Open Networking Foundation.
Goldman declined to comment.