Traditional banking has been around for more than 100 years, they have survived many disruptions, wars, booms, busts, bubbles, cycles and crashes. Today the disruptors are the neo banks, fintechs and even big tech.
The path to innovation: Stop, listen and collaborate
Before "disruptor" was a term associated with financial technology, it might have been a term my dad used to describe how I’d be perceived in the workforce. When I finished my master’s degree, my dad sat me down and said, "You’re going to struggle because you have a huge personality, and you’ve been exposed to a lot of opportunities in the business world at a young age, ones that most people don’t even know are possible. You think that everybody is going to think just like you, and they don’t. You might need to dial it down for about 10 years." His predictions weren’t wrong, and I have learned to listen and collaborate rather than steam roll through.
With an undergraduate and a master’s degree in Industrial and System Engineering, I started my career as a consultant. From the start, my job has been to find innovative solutions for companies’ biggest problems, work with them to fix those problems and drive meaningful change
In the aftermath of the financial crisis in 2008, I was in a role managing the regulatory change portfolio at a large UK national bank. Regulators responded to the crisis with a ton of regulations that all entered into force at the same time. These regulations impacted all aspects of the financial services industry—from traders and investment banks to people’s pensions, mutual funds, and retirement. The impact on the client journey was huge.
We needed to think about how we were going to share the regulations with customers. We didn’t have a lot of time and had quite a few changes to put in place. My team was small and had limited resources—regulatory change wasn’t the trendiest department to work in—so we learned to work in an agile way by breaking the project into small pieces at a time. It took a disruption in the traditional workflow to advance forward. This was one of the instances in my career when I encouraged an open source way of working, without putting an official name to it, or even necessarily knowing I was practicing the open source way of working.
To me, open source is more than just how technologies work. It is about enabling people, resources, and yes, the technology, to come together to work for the greater goal.
I’ve been embracing the open source way of working by helping teams break down silos and disrupting the traditional ways of working in the banking world. Traditional banks are still trying to earn back consumer confidence from the 2008 crash, and, in addition to the legacy systems, they’re also dealing with the competition from fintechs. To take on fintechs, a certain level of disruptors are healthy in traditional banks.
Modernising for the future and maintaining trust
When looking into a fiduciary for your assets, a bank with a long-standing history may seem like a stable, trustworthy choice. However, that very legacy may be one of the reasons large banks lose out to the competition in an age where customers are expecting open, quick, and real-time banking.
Not unique to banks, big companies have a challenge of navigating legacies. These legacies do not just pertain to mainframes with monoliths on them, but also how they work. Along with their associates, senior managers should also show a desire to change. It’s harder to move fast if you are huge, but embracing an open culture from the top down can be a good starting point. I’ve seen huge amounts of talent, smart people, and big budgets hindered by a staid way of working. The strategy still needs to come from the top, but everyone should be enabled—and perhaps more importantly, empowered—to contribute.
Regulations have forced banks to be more siloed, and now they continue to operate like that because it is easier, and traceable. IT in a bank was merely a cost center, a service provider until about 10 years ago. Technology was never an enabler, but seen as a cost-sink. We’re still struggling with this mindset today, even though we have continuously seen how technology can be a competitive differentiator.
Large banks often don’t know where to start with some of their legacy, often the product of mergers and acquisitions. Then, you throw in a pandemic, during which the world of banking had to transform at a rapid pace to expand digital banking and chatbot services, and it ends up being a lot to take on all at once for large institutions. It can feel easier to keep legacy systems in place to stay afloat.
Traditional banks still need help with faster transaction times, integrating artificial intelligence to improve the customer experience, and implementing agile ways of working for their IT teams. The hurdle lies in figuring out a way to get started. As a customer, I saw this innovation from Red Hat.
Having worked in the banking industry for much of my career, I’ve wanted to bridge the gap between the different silos, but felt that it might be better to help change banks and help them modernize from the outside in.
That’s why I joined Red Hat. As a part of the FSI team, I want to help banks think about how they can modernize. More importantly, my goal is to help them see the why: digital transformation is imperative for the next generation. I also want to help customers to understand that technology is not scary. Open source tools and the open way of working, open more doors than they close (pardon my pun). I am passionate about helping banks understand the benefits of open source.
In order for them to understand how our technology can help, open culture is the big thing we can share with our customers. Traditionally, IT teams have been responsible for digital transformation and innovation for departments at large banks. In my new role, I’m constantly thinking about how we can help this change happen across the whole enterprise and at the leadership level too. When open culture permeates, the legacy can start to change.
My dad, it seems, was ahead of his time, getting me to think differently and collaboratively, to stop, listen, learn and be open. Thanks, Dad.