I find it interesting to look at the fintech start-up scene and the hotbed of interest now in the blockchain. There are hundreds of companies attempting to do something in these areas, and it amuses me that my beer and Bordeaux clash is even more notable in this emerging ecosystem.
First, you have the beer brigade. These are the Silicon Valley brigade of hipsters. Marrying these millennials with the boomers of banking is a tough ask, especially as the boomers of banking look pretty dull.
They like Bordeaux wine and canapés, rather than beer and pizzas, as I noted a couple of years ago when we launched our blockchain group within the Financial Services Club.
The old and the new
So how to bring these two together is a big challenge for a bank. Banks like minimal risk and are organised by financial experts to provide maximum returns; a technology company likes to learn and fail fast, and is organised by youthful technology experts to provide maximum innovation. How do you bring the old and the young, the financial and the technological together?
This is a question that arose the other day in a bank when I talked with a senior head of innovation. I said his bank seemed to be doing the right things to be digital, and he replied: “We are taking the right action but the question is whether we can be digital, which is more fundamental.” I asked him why the bank couldn’t be digital, and he replied it was the culture. The culture is the hardest thing to change, and becoming a digital bank is nothing if you do not have the passion to change.
That was an interesting comment and was followed by another discussion that worked the other way around. I have a friend who is creating an interesting blockchain company. The company’s leadership team are experts in finance; seasoned City people who like the shared ledger structure so much that they’ve created a breakthrough system for banks using this technology. They’ve been pitching the technology around the markets, and are being regularly referred to young millennials for due diligence. My colleague was pretty miffed about this, as he usually deals with David Cameron, Boris Johnson, Mark Carney and Andrew Bailey. To suddenly be behooved to some young upstart in jeans and trainers does not fit well with such experience.
This led to another chasm of culture: trust. The old guys don’t think the young guys understand financial markets; the young guys don’t think the old guys understand technology. So the ideal mix is to have a company of millennials and boomers, isn’t it? Let the old guys share their wisdom about money; let the young guys share their knowledge about computing.
Winning combinations
We do see this in some firms. For example, R3 CEV. I bump into its youthful visionaries and think: hey, do they have the knowledge? But then I bump into its CEO, David Rutter, and it does. Just have a look at how it describes itself, and you’ll see what I mean:
"Led by former ICAP electronic broking CEO David Rutter, R3 is made up of financial industry veterans, technologists, new tech entrepreneurs and subject matter experts, bringing together expertise to rethink and improve the modern financial markets ecosystem."
Or take Digital Asset Holdings. Led by Blythe Masters (credit default swaps at JPMorgan) and some seasoned folk such as Chris Church (Swift Securities in the US), they also have a number of supersmart technologists such as Yuval Rooz (algo trading) and Shaul Kfir (quite literally a rocket scientist).
Or take Zopa, created by seasoned financial professionals who previously created Egg. Or take Atom Bank, created by seasoned bankers who have worked in or created banks before.
But then I’ve also bumped into a few firms where the millennial-boomer divide is too great. Maybe the boomer is the leader and treats the millennial too much like a son or daughter, rather than an equal. Or maybe the millennial is the leader and treats the boomer as too much of an old relative.
Either way, this 'fin' and 'tech' integration of boomer and millennial isn’t easy. The answer may therefore be that the boomer needs a millennial mentality and the millennial needs to respect the boomer’s experience.
Chris Skinner is an independent financial commentator and chairman of the London-based Financial Services Club.
