The CEO and Chair make digital banking work

I claim that most of the banks embracing true digital transformation and not just treating digital as a channel, are led by people who understand technology. They have a leadership team who are passionate about digitalisation, and see it as a core raison d’etre of the bank’s future. Not just an add-on. So, I took a look at some of the banks I’m talking to like JPMorgan, BBVA and DBS*. And then compared them with a few others that I don’t see as being quite as forward thinking on digital. In this case, I picked on HSBC, Deutsche Bank and Maybank.

My focal point being on the operational management of the bank. Not the Board or the lines of business, but the CEO and their direct reports. What’s their background? Who are they? Where do they come from? What technology experience do they have.

Starting with JPMorgan Chase, the only person on the team with a dedicated technology background there is the CIO, Lori Beer. However, I would say that Jamie Dimon is a technology guy. You may disagree, but he was the man who insourced the outsourcing contract from IBM when Bank One and JP Morgan Chase merged. The reason?

“We believe managing our own technology infrastructure is best for the long-term growth and success of our company, as well as our shareholders”, said Austin Adams, JPMorgan's chief information officer, on behalf of Jamie Dimon who, bear in mind, came from the trading floor and saw the strategic advantage that technology could make to the investment markets operations.

BBVA has several leadership teams, including one dedicated to technology, but I decided to look at the background of the Executive Committee. Here we find Carlos Torres Vila, former CEO and now Chairman, is an alumni of the Massachusetts Institute of Technology (MIT), a former partner at McKinsey and has been head of BBVA’s digital banking program. Onur Genç, the new CEO, began life as an engineer and joined American Airlines as the financial controller for IT before joining McKinsey. Then you have Derek White (Customer Solutions), Ricardo Garcia (Engineering) and David Vicente (Data) who are all on the leadership team in roles dependent upon technology by background. That’s almost half of the Executive Committee and very different to JPMorgan who don’t have the roles of Data and Engineering on their leadership team … yet.

Then we come to DBS, and I have met most of their management team. Piyush, the CEO, came from running operations including technology for Citigroup India as Chief of Staff. David Gledhill, Group Chief Information Officer, spent his life in technology and operations in JPMorgan and now DBS. Shee Tse Koon, Singapore Country Head, was previously Chief Information Officer and Head of Technology and Operations for Standard Chartered in Singapore.

There are others on their team who obviously have a digital knowledge base and the one thing that impressed me, in talking with their management team, is how they consistently discuss digital in the same breath as customer experience.

Funnily enough, having done this analysis, the operational leadership teams of these three banks who are embarked on full digital transformation do not appear to be all that different to those who are less digital … on paper. HSBC, Deutsche Bank and Maybank have very similar teams. The only difference I can really identify is the CEO and Chairperson.

The CEO and Chair of JPMC, BBVA and DBS have all worked closely together to make digital transformation happen, and have CEOs who fundamentally believe digital is core to the future of the business. Without digital transformation, they wholeheartedly believe the bank will fail in the future.

Meantime, the CEO and Chair of HSBC, Deutsche Bank and Maybank talk digital, but do they walk it? Have they internalised it in the way that Jamie Dimon, Carlos Torres and Piyush Gupta have. I’m not sure.

Either way, it is those two roles – the CEO and Chair – that make the real difference. The Chair needs to be on board to get the Board’s backing and protect the bank from shareholder resistance during the transformation process; and the CEO has to be on board to get the leadership team, management and people aligned to the vision of where the bank is going.

In particular, the CEOs of the banks embracing digital transformation tend to have had considerable involvement in technology in their career. Jamie Dimon knows technology is mission critical which is why he won’t outsource everything; Piyush Gupta was hands-on involved in running the IT operations of Citibank India; and BBVA’s former Chairman, Francisco Gonzalez, started his career in programming mainframe systems as a developer.

That’s the real difference: a CEO and/or a Chair immersed in technology at some point in their career. Other than this, there is very little difference between a digital bank and a traditional bank.

 

* these are just three of the major nine or ten that I can see as truly embracing digital transformation from an external observers’ viewpoint. Note: there are others, but many others are smaller and more niche. These are full service banks that cover regions or global operations.