I had an interesting discussion about hiring technology people into banks the other day. The challenge of finding top coders is a big one, as there’s an awful lot of other firms to join out there. You could join a hot FinTech unicorn like Monzo, SoFi, Stripe, Ant Financial, Ping An or many of the others, or you could join some of the ponies (under $100 million valuation) and centaurs ($100 million to $1 billion) out there. Equally, there are many others that could attract, from technology unicorns to technology titans.
So why would I join boring old bank when Amazon and Tencent are calling?
A number of reasons, the banker told me. First and foremost, not everyone can join a FATBAG (my version of FANGS). Therefore, there will always be talent that doesn’t join the technology titans. You may wonder why you wouldn’t want to be there. A number of reasons, with location being a key one. If you’re joining a Netflix or Facebook, then you’re West Coast bound to Silicon Valley where the average house price is $1.4 million. Not everyone wants to be based there and many cannot afford to be there if they’re just starting out on a coding career.
Second, for every unicorn a thousand ponies die. There are thousands of start-up firms out there with great ideas, but their burn rate is high and capital can often be hard to maintain operations. Even unicorns die, so you’re taking a big bet if you join a start-up.
Thirdly, many are motivated by doing something that can make an immediate difference to their friends and family. If you’re involved in a start-up, it may be years before you see users using your code. If you join a FATBAG or big bank, you’ll see the difference it makes for your mates that week. The satisfaction of seeing that is huge.
Fourth, it may well be that you want to change the world and how best to do that? Attacking from the outside with something unproven, unstarted, unused and unknown; or from the inside, with something being used by millions and trusted by all?
Finally, a banking career is attractive because the big banks are hiring . There may be a hangover from the global financial crisis and the anger of the 99%, but if you’re able to code and code well, a job with a bank is a good job.
I reflected on this and, as usual, did some sniffing around to see what the internet thought. The first thing I found was Quora where someone asked the question: why would software engineers work in finance instead of tech?
Answer: because banking is where the money is.
Well, that was answer #1, whilst other answers say that banks are tech companies, so there you go.
On that point, they may be right. In a recent American Banker article, the first paragraph makes this point:
Goldman Sachs CEO Lloyd Blankfein calls the investment bank a tech company — and roughly 25% of its 33,000 employees are engineers. JPMorgan reportedly employs 50,000 technology workers (including a former Google artificial intelligence executive), which is nearly double the total number of employees at Facebook.
The article goes on to say that the main motivation of developers joining a firm is to solve interesting problems, which goes to the heart of my banking friend’s point number three. Developers are drawn to companies that have Big Data to analyse using Data Analytics. It’s all about the point that data is air, not oil. Oil is a fossil fuel that has limited life; data is the oxygen that allows banks and any other technology firm to breathe. Without good data, you suffocate. And a developer is driven by taking good data and making it into good service.
So a bank looking to get good talent really needs to focus upon what problems they can solve with their data, and how to motivate developers to understand their data needs.
Nevertheless, going back to my Quora debate, one person responded:
I've worked for "cool" tech companies and for a financial company. I quit the financial company after 3 months … in a financial company, you're a cost of doing business. In a tech company, you ARE the business.
Interesting, and a point expanded upon by Tomasz Grynkiewicz over at Netguru.
So banks want good coders as a priority but need to recognise that their culture needs to be about coding, developing and technology to ensure that these individuals are treated as core and not peripheral to the business.
That’s a good message to take to the management team.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...