Fintech: Why banks should be far quicker to embrace millennials

 In Fintech

fintechSubmitted by Paul Sullivan via LinkedIn

When it comes to change and all things Fintech, banks should be far quicker to embrace millennials and be far more open to strategic IT implementations with them.

Their openness to technology change and reform should be admired and adopted.

 

My Experience

From my own time in banking, I remember just how frustrating and cumbersome it was to get any sort of IT project signed off for implementations, and when they did, they wanted to announce it bank wide like it was the next best thing since sliced bread.

Working for a time in operations, particularly in dividends and dividend processing, many of todays’ world leading investment banks really did have particularly bad processing systems. I even remember one particular German bank (now since taken over) had a back office in a time of technology where you still had to print off reams of paper trade reports in order to find your position to pay the dividends out on. Hopefully things have seriously improved since then!

Fintech

However at a recent Fintech for good event I met Alex. Alex like me had worked in banking but quickly became disenchanted as the laborious task of IT change in a multinational became apparent. Working on a trading floor at a bank whose name we shall keep out of the spotlight, it became apparent that the system they were working with wasn’t quite up to the challenge it needed to meet.

Thinking he was being pro-active and an aficionado to code, Alex duly took himself home one weekend grabbed some downtime and within a ruby framework returned on Monday and presented his then boss with a solution to the ongoing problem.

AMAZING!

Problem solved his manager thought, who ecstatically peeled off to report to his own manager the new solution to their on-going problem. This continued up until it the director of trading heard about it and duly reported this new web based platform into the relevant departments.

After a long protracted investigation into the codes security, the capability of the platform and then the obligatory political furore amongst the heads of various IT departments, they declined the option and the department went on working with its substandard product.

For those that haven’t worked in a bank or a large multinational, you can’t really comprehend how long decisions take, especially around IT improvements and spend.

Process for change

You usually find a steering committee needs to be formed with various members from a number of different areas the solution is proposed for, then you need get stakeholder buy in which in itself can become a very arduous task. Once that’s been taken care of you need to carefully document the process, write up the pro’s and con’s, design it, get that signed off, break it down into scrum or agile development pieces and it goes on.

What I’m alluding to with this article is that traditional banks and large multinationals will have set processes to follow, they’ve had them for years, its just how things get done. But today’s millennials, they don’t want to wait for the necessary signatures and steering committees or focus groups to be formed and then for the politicking to take place and then finally start the project.

They are fully capable of assessing a problem, realising the solution and quite easily coding that in a very short space of time. They are quicker to react, faster to spot solutions to problems and quite frankly big corporates and banks or investment banks should take note, because in this day of financial technology and online banks, you could easily find yourselves becoming redundant because of your own bureaucracy.

Sergey Sanko
Sergey had started an IncomeClub after years of being an investment advisor for high affluent investors and managing fixed income securities. He is the lead investment advisor representative and holds a Series 65 license. Sergey earned his Executive MBA degree from Antwerp Management School.
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