For the people working in “digital transformation” functions in investment banks, 2021 is a year of promise. If there were any lingering doubts about the need for automation, the pandemic has cast them aside. Finally, the layers of people thwarting their ambitions will be removed.
At least, this is the big hope.
“I can manage the technology, but the big issue in banks is the people,” said a head of global digital delivery at a major bank. “People in banking can become very institutionalized; they have the wrong mindset. You get senior people who have been around for decades and they’re very uncomfortable with change. I come from an entrepreneurial background and it can be very difficult to push anything through.”
It’s an accusation that’s been leveled before. While banks openly espouse digital transformation projects such as Citi’s new push to digitalize electronic trading platforms, in practice many incumbent business leaders in the industry come from a non-tech background. Banks such as Deutsche Bank and HSBC have lost “digital evangelists” who’ve become frustrated with the slow pace of change, even while senior management talk the talk of a digital revolution.
“We’re bullied,” said this head of digital delivery. “I love technology, but people in the business don’t understand and there is a culture of bullying people who seem to be a threat.”
With banks compelled to cut costs harder and faster as a result of the virus, banks’ digital gurus are hopeful these “blockers” will finally be dispensed with. “Past innovation is helping us a lot in the current crisis,” said a managing director in the digital team at another bank, who believes this bodes well for the future.
“These people need to be cleared out,” said the head of digital delivery. “Banks need to wake up to the fact that clients are becoming more interested in the quality of the service than in sticking with their historic service providers. There are big opportunities for fintechs to disrupt incumbents’ business models and banks need to change.”
The downside for the digital evangelists: Less money after the pandemic. A managing director charged with digitalizing trading processes predicts that there will be more focus on cost and “less propensity to take risks” in the future. Digital automation projects will need to be no-brainers with short time horizons, he added. Anything that allows for remote working will be sped up, with sales trading roles at the forefront of the push.
As a result digital gurus may also have to rein their ambitions… and to get used to making do with what they have. “There won’t be absolute expansion of technology headcount in banks for a while,” predicted the managing director. “We’re probably looking at reallocating developers from other projects.”
A modified version of this article originally appeared in eFinancialCareers.