4 ms·

Lots of fintech entrepreneurs I have spoken seem to disregard threats to their model by their biggest competitor: banks. Banks are your biggest and smartest com

Lots of fintech entrepreneurs I have spoken seem to disregard threats to their model by their biggest competitor: banks. Banks are your biggest and smartest competitor. And they are not as bureaucratic as you may have been led to believe. They pay top dollars for engineering and marketing talent and they have a ton of money and patience. So unless you have a strategy to deal with banks, you are toast.

p4wnc6 11y ago
It's well-known that banks do not pay top dollar for engineering or IT talent. Further, for the less-than-top-dollar pay, you often work in horrible conditions. It's loud, relentlessly interactive even if your job function has nothing to do with intraday banking activities. Banks are notorious for using legacy technology, having arcane legal restrictions (e.g. you can't use an open source project without weeks worth of approvals and paperwork), virtually never pay down technical debt, have an unholy mixture of off-site consulting teams with too many cooks in the kitchen, and require you to work an unreasonable number of hours purely for the sake of appearing, visually, to do a lot of work. I am not in the fin tech space, but if I was, banks would not be a serious worry. When large banks "mobilize" to compete with faster moving start-ups it is a hilarious failure, like when a cat is trying to take off a cat Halloween costume.
- kafkaesq 11y ago
  It's well-known that banks do not pay top dollar for engineering or IT talent. Doesn't jibe with my observation -- my sense is that (upper-tier) banks do pay significantly higher than tech startups (leaving aside equity, of course), on average. And offer a lot more security, if you can stick it out. Again, on average -- for average-schmoe Java/C++/what-have-you devs. You're definitely right about the horrible technology and working conditions, though. That's why the banks know that have to dangle above-average salaries for all kinds of humdrum role descriptions -- deep down inside, they know that to a large extent, they're paying people for being willing to hold their nose, day in, day out, year after year. And of course for the willingness to pee in a cup, because someone told you to.
  - p4wnc6 11y ago
    I guess it depends on what you mean by upper tier. Goldman Sachs pays well. JP Morgan, Bank of America, Wells Fargo, BNP, Citi, Morgan Stanley, TD Bank, Standard Chartered, etc... These places absolutely don't pay well even compared to medium quality established tech firms. Certainly they don't pay well compared to hedge funds, private equity, VC, and other types of boutiques. And if it is even remotely adjusted for quality of life, they begin to look horrible. The larger banks like JPM etc go out of their way to suppress wages. They are sort of the IBM of finance. Lots of big, senseless, ill-conceived technology re-orgs all the time happening to create bonus fuel for someone up the food chain. These places certainly don't recruit the best, and often dupe decent developers into doing totally foolish things, like working in a proprietary language for years that heavily damages your ability to get other jobs, for salaries and bonuses that don't even afford that great of a lifestyle in the high-cost cities you're required to live in to work for them. Bonuses at banks are also often paid in the form of bank stock and vests on a rolling basis. This stands in contrast to straight cash bonuses paid by many other types of firms, which have the benefit of not immediately being correlated directly to your regular income stream (e.g. if things go downhill and you're laid off, at a bank this often means that stock bonus has lost considerable value and you could be screwed out of a large portion due to vesting issues ... whereas a cash bonus could have been invested in some way that helped diversify and hedge against risks of losing your job). Comparing with start-ups is not very useful since start-ups also seek to greatly suppress wages by marketing jobs as lifestyles instead of a fair trade of labor for wage.

p4wnc6 11y ago

It's well-known that banks do not pay top dollar for engineering or IT talent. Further, for the less-than-top-dollar pay, you often work in horrible conditions. It's loud, relentlessly interactive even if your job function has nothing to do with intraday banking activities. Banks are notorious for using legacy technology, having arcane legal restrictions (e.g. you can't use an open source project without weeks worth of approvals and paperwork), virtually never pay down technical debt, have an unholy mixture of off-site consulting teams with too many cooks in the kitchen, and require you to work an unreasonable number of hours purely for the sake of appearing, visually, to do a lot of work. I am not in the fin tech space, but if I was, banks would not be a serious worry. When large banks "mobilize" to compete with faster moving start-ups it is a hilarious failure, like when a cat is trying to take off a cat Halloween costume.

kafkaesq 11y ago
It's well-known that banks do not pay top dollar for engineering or IT talent. Doesn't jibe with my observation -- my sense is that (upper-tier) banks do pay significantly higher than tech startups (leaving aside equity, of course), on average. And offer a lot more security, if you can stick it out. Again, on average -- for average-schmoe Java/C++/what-have-you devs. You're definitely right about the horrible technology and working conditions, though. That's why the banks know that have to dangle above-average salaries for all kinds of humdrum role descriptions -- deep down inside, they know that to a large extent, they're paying people for being willing to hold their nose, day in, day out, year after year. And of course for the willingness to pee in a cup, because someone told you to.
- p4wnc6 11y ago
  I guess it depends on what you mean by upper tier. Goldman Sachs pays well. JP Morgan, Bank of America, Wells Fargo, BNP, Citi, Morgan Stanley, TD Bank, Standard Chartered, etc... These places absolutely don't pay well even compared to medium quality established tech firms. Certainly they don't pay well compared to hedge funds, private equity, VC, and other types of boutiques. And if it is even remotely adjusted for quality of life, they begin to look horrible. The larger banks like JPM etc go out of their way to suppress wages. They are sort of the IBM of finance. Lots of big, senseless, ill-conceived technology re-orgs all the time happening to create bonus fuel for someone up the food chain. These places certainly don't recruit the best, and often dupe decent developers into doing totally foolish things, like working in a proprietary language for years that heavily damages your ability to get other jobs, for salaries and bonuses that don't even afford that great of a lifestyle in the high-cost cities you're required to live in to work for them. Bonuses at banks are also often paid in the form of bank stock and vests on a rolling basis. This stands in contrast to straight cash bonuses paid by many other types of firms, which have the benefit of not immediately being correlated directly to your regular income stream (e.g. if things go downhill and you're laid off, at a bank this often means that stock bonus has lost considerable value and you could be screwed out of a large portion due to vesting issues ... whereas a cash bonus could have been invested in some way that helped diversify and hedge against risks of losing your job). Comparing with start-ups is not very useful since start-ups also seek to greatly suppress wages by marketing jobs as lifestyles instead of a fair trade of labor for wage.