Investment banks spend billions each year on technology, have armies of developers, architects and project managers overseeing cutting edge products – or at least those with enough firepower behind them to keep up with the competition. And yet, working in the financial sector is not cool.
Banks struggle against large tech companies and the ever-growing band of fintech start-ups, which poach their talent and divert away technologists who might otherwise have been swayed across to the big pay packets on offer in the financial sector. Never ones to simply throw in the towel, investment banks are instead looking to bring tech talent into the fold either via the back door, or making the front door decidedly more Google-esque. Here’s what the banks are doing to incubate technologists, or at least ensure they get dibs on whatever is developed.
Credit Suisse is among the major backers of The Anthemis Fellowship, a 12-month programme aimed at finding the next generation of fintech digital entrepreneurs and nurturing their talent. It’s run by financial services technology focused investment firm Anthemis Group. The Swiss bank is one of three other major sponsors, but being part of it ensures that it’s close to burgeoning digital talent - a group that most banks struggle to attract. Sarah Wilkinson, a managing director at Credit Suisse, says that the scheme’s “focus on manufacturing the digital talent” is unique.
Goldman Sachs preaches the importance of its proprietary code in giving it the edge over its competitors in the trading world – it even uses its own programming language, Slang, in many of its applications. However, for the past 18 months or so, it’s had its GS Collections source code on open source repository Github – the idea is that any talented developer can come in and suggest ways of improving the code. This is a win-win situation – the code will probably get better, and Goldman could unearth some tech talent who may not have come on to its radar otherwise.
Barclays is giving every impression of being cutting edge – it has premises in the hipsterville of East London and has just opened its doors to 11 entrepreneurs all vying for attention in the fintech sector. The Barclays Accelerator programme, a three-month intensive course aimed at mentoring fintech start-up firms and ensuring that they have the best possible launchpad for their product, attracted applications from more than 300 companies – the $20k of seed funding no doubt also helped – before being whittled down to handful of firms. Barclays accepts that it can’t develop all these innovative digital products in-house and has come up with an alternative method of accessing technology talent.
UBS is also involved in a FinTech accelerator programme – the FinTech Innovation Lab in London – but since installing Oliver Bussmann as CIO from SAP last year, it’s started to embrace the working practices of start-up and large digital firms. The tech “ecosystem” within the bank has changed, he says, with internal “innovation spaces” formed with the funds to allow the teams kick-start their projects.
“What we did was to come up with an ecosystem approach that established not only internal innovation teams and digital teams, but also embraced start-up incubators. For example in Zurich there is an incubator hosting over 100 start-up firms, and we now have now teams embedded in those incubators,” he told a recent analyst conference.
UBS, like others, has realised how difficult it is for a large bank to keep pace with nimble start-ups capacity for quick innovation and is working with these firms. However, it’s also trying to show that it can compete with them in terms of working environment, which is clearly aimed at attracting burgeoning talent.
JPMorgan has over 4,000 staff at its technology and operations hub in Bournemouth, UK and is, quite clearly, one of the largest employers in the city. However, conscious of the need for the bank to continue to appeal to young talent – one of the largest components of its intake into the office each year is at a graduate level – JPMorgan is investing $48m to revamp its office space.
Think breakout lounges to encourage more collaborative working, a fancy new restaurant and new bike facilities (presumably for one-speeds). In fairness, this is the latest innovation from the bank to encourage more technologists to the business – it’s targeted female engineering students for IT roles before they start university, run Code for Good challenges encouraging young developers to apply their skills for non-profit organisations and has recently switched to an Agile methodology for its tech projects.
Both HSBC and Santander have created direct investment funds to provide capital to financial technology start-ups. HSBC has $200m to invest and Santander half this amount. Obviously, this doesn’t mean that the talent will gravitate towards the banks, but does mean they can use their financial firepower to ensure they keep pace with rapid innovation in the fintech sector.