Banks Have the Tools to be Tech Companies, but Struggle with Talent

“Tech has come to the forefront—it’s no longer seen as just a support function,” said Ruth MacQuiddy, technology strategist at Deutsche Bank Innovation Labs, speaking at this year’s Waters USA conference held on December 4 in Manhattan. “Technology strategy is the core foundation of our future state, culturally and otherwise. We’re all evolving into technology companies that provide financial services and products.”

But while banks may have the tech nous to claim the title, industry veterans question whether Wall Street is ready to become an East Coast version of Silicon Valley just yet.

“Everyone has the tools at their disposal [to be a tech firm], but not everyone has the talent to take advantage of the tools, and the data upon which to operate them,” said Matt Joseph, head of the Jersey City Innovation Center at BNY Mellon, speaking as part of the advisory board panel discussion.

Part of the reason why talent has proven to be such a thorny question for the industry, Joseph continued, is because of its perception among younger generations. While salaries in financial services are still extremely competitive—although, perhaps not as much as they once were—banks are still poor at increasing their visibility among potential future employees.

“Financial services companies don’t put themselves in classrooms—you see big tech companies actually going into classrooms and teaching 12-year-olds how to code, so that person’s first experience with code wasn’t picking up a book because they felt like it, it was because Facebook came into their classroom and taught them,” he says. “Then when they reach 19, looking for their first internship, who are they looking to?”

Other areas that make it difficult for banks to truly behave like technology firms—and thus attract similar talent—is that the environment banks operate in is perhaps far more restrictive than the Apples and Googles of the world.

MacQuiddy pointed out, for instance, that in the financial services industry it’s not possible to simply spin up an environment and experiment with new technologies. This, she said, is understandable, but it is “an additional key challenge for us when it comes to competing with tech companies.”

It’s not just the ability of banks to be flexible, or their presence in classrooms, however. Victor Tewari, senior technology officer at BMO Financial Group, pointed out that in terms of the candidates Wall Street needs, the requirements are perhaps much more extensive than Silicon Valley’s.

“It’s hard to keep talent, because what we’re looking for is a different breadth of talent,” he said. “This newer generation is already equipped with computer knowledge. They’re coding from a young age. We’re looking for someone who has technology [skills], but understands the business, so that they can identify data points, correlate them to actual business rules, and build models and then identify how that can drive or recognize patterns in the business.”