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It's Getting Harder to Tell Banks from Tech Companies

322 points by severine 9y ago

cm2187 9y ago
That being said I wouldn't say Goldman is your typical bank. Other banks are much slower at embracing automation and software development is more often than not considered as a non strategic commodity which budgets and headcount fluctuates up and down based on how much is available for discretionary spending. And the statements from its senior management are also too often aspirational and disconnected from the reality of the organisation.
- wgerard 9y ago
  That's interesting to hear! I'm going through "Flash Boys" right now, and it (to me at least) paints GS in a pretty negative light wrt their engineering culture. Granted the book mostly focuses on HFT firms, so I could easily see that GS is way better than most large banks but a bit lacking behind, say, Citadel.
  - dsacco 9y ago
    > That's interesting to hear! I'm going through "Flash Boys" right now, and it (to me at least) paints GS in a pretty negative light wrt their engineering culture. As an aside, if you’re not planning to already, please read Flash Boys: Not So Fast when you’re done.
- mipmap04 9y ago
  As someone who works in the regtech / fintech industry I totally agree. Large portions of even the biggest banks are severely underserved technologically. There is a lot of wide open space here for technology that improves efficiency and accuracy related to compliance and general operating activities.
- ionforce 9y ago
  Is there a way to express/model technology so that it isn't considered this accessory but something that is core to their values/mission? Have we not done a good job of proving that investment in technology is a force/profit multiplier?
  - 123212321 9y ago
    The truth is tech is not a force multiplier in finance, except for HFT. A few firms do pay a ton for engineers (higher than google level comp), but there are probably less than 5000 of those engineers in NYC.
    - nissimk 9y ago
      No. Many smaller financial firms derive their advantage from technology. There are many areas of finance aside from high frequency trading and they all benefit from significant force multiplication from technology. Even in the lowly area of operations automation there are firms that achieve significant scale with a small number of personnel through technological advantage. Granted this is sometimes achieved with a combination of in house and commercial technology packages, and sometimes the overall system design is done by non-technical people who just manage grunts to do all of the work, to say that these companies are not benefiting from force multiplying technology is foolish. There are very few financial professionals left who are not technology people in some sense of the word. Many firms benefit from better data. All that data needs to be acquired and managed. Many firms benefit from better analytics and models. Those models need to be tested and implemented. Your number is low.
      - 123212321 9y ago
        Source is I work in this field. There are positions with big data and data management that pay well. But the ones paying 350k+ are way harder to get than working at a top tech firm. Theres a quant trading firm called engineers gate that has a bunch of ivy league programmers, the top of the top. They havent made a nickel off their technology. They have a had a huge outflow of talent to Google and FB. People do get paid 500k+ to manage a firms data, but thats because the firm makes so much that the money splashes around, not because its a huge component of their profitability. Even at Two Sigma, the engineers are second class to the quants.
hownottowrite 9y ago
http://archive.is/D7vIv http://archive.is/D7vIv
adventured 9y ago
As witnessed by Bank of America's aggressive pursuit of blockchain technology & patents: "[Bank of America] has applied for or received at least 43 patents for blockchain, the ledger technology used for verifying and recording transactions that’s at the heart of virtual currencies. It is the largest number among major banks and technology companies" https://www.bloomberg.com/news/articles/2018-01-16/bofa-tops-ibm-and-payments-firms-with-most-blockchain-patents https://www.bloomberg.com/news/articles/2018-01-16/bofa-tops...
- adamnemecek 9y ago
  I feel like some of the reasons for this are political rather than technical.
claytoncorreia 9y ago
It seems like banks are realizing that they need to become tech companies faster than tech companies become banks.
- lisper 9y ago
  No, it's that it is much easier for a bank to become a tech company than for a tech company to become a bank. The barriers to entry for becoming a tech company are merely technological. They are not trivial to surmount, but they are surmountable. By way of contrast, the barriers to entry to becoming a bank are regulatory, and nearly impossible to surmount, at least in the U.S. When was the last time you heard of a new bank being founded here?
  - tvanantwerp 9y ago
    I doubt a startup could become a bank. But if Google wanted to start a banking subsidiary? They could probably throw whatever money it takes at the problem and get it done. The real question is, would they care to do it?
  - ahussain 9y ago
    https://monzo.com/ https://monzo.com/ - not in the US, but in the UK some start ups have started overcoming the regulatory hurdles.
  - aianus 9y ago
    There are many, many small banks in the US; you can just buy one that already has a license. Certainly not insurmountable.
    - cocoablazing 9y ago
      None of those small banks are subject to the regulation that large BHC are. The potential barrier is off by orders of magnitude. The development cycle on those models is multi year. It would take a massive effort to recruit and build the quant teams alone, much less the finance, compliance, and legal personnel with the expertise.
organsnyder 9y ago
I work for a large healthcare system, and the "we're not a tech company" line is often heard. At many levels, I agree—we're in the business of delivering healthy outcomes to our communities, so we need to make sure that efforts across the enterprise support that—but it is often applied in ways that stifle us from delivering what we feel would be the most impactful and cost-effective solutions. I like to respond that Netflix isn't a tech company, either—they're in the business of delivering entertainment. Their position and reputation allows them to build a stronger engineering culture, but their technology still is subservient to their non-tech business goals. While "software is eating the world" has been quoted to the point of being a cliché, the organizations that recognize software as a competitive differentiator—rather than merely a cost center—definitely have an edge against their tech-averse competitors.
- oblio 9y ago
  I like to ask people what's the biggest advertising company in the world. You'd be surprised how many people don't know :)
  - wafflesraccoon 9y ago
    Who is the biggest advertising company? Google?
    - oblio 9y ago
      Unless something changed recently, I believe that $95bn of advertising revenue makes them the biggest advertising company in the world :)
      - golemiprague 9y ago
        They are the medium, not the advertising company, the same way a tv channel is the medium, not the advertising company. WPP, Omnicom, Dentsu, those are advertising companies. You are conflating here two different things.
curuinor 9y ago
it is extremely easy to tell a bank from a tech company: tell if they hash their damn passwords. i'm not even talking salt here, just hashing
- raesene9 9y ago
  if you're thinking of some bank's propensity to ask for specific characters of passwords (rather than the whole thing) meaning they can't have hashed it, it's worth noting that many protect the passwords with symmetric encryption and then store the keys in an HSM to mitigate the risk of unauthorised access.
  - Cyph0n 9y ago
    Unless the HSM is also doing the decryption, the key(s) can still be stolen while in RAM..
    - raesene9 9y ago
      indeed it is. With bank HSMs the encrypted key and characters from the user's password are passed into the HSM and the check is done within the secure hardware, the main system does not get to see the decrypted password.
    - fgonzag 9y ago
      That's the whole point of an HSM... A somewhat tamper resistant device that executes all encryption operations. You give it the hash and a reference to the the key, and it returns the signed data.
123212321 9y ago
This isnt really true. Banks dont pay anywhere near tech salaries. Its all lip service. The flow of good engineers is always banks -> tech companies and never tech companies -> banks.
- ionforce 9y ago
  I think it depends on the company. From my personal experience it's something like crappy software company << bank << startup So depending where you are in the software world, you can still be making a ton of coin at a bank.
- samfisher83 9y ago
  The salaries are good if you are banker.
- vonmoltke 9y ago
  They don't pay anywhere near top tier tech salaries. They are competitive below that (the Oracle/Cisco/IBM level).
- xaybey 9y ago
  I make significantly more at GS than I did at google. The difference is that the majority of my compensation comes from the yearly bonus - a quirk in finance.
  - 123212321 9y ago
    As a regular engineer? Or is there a math heavy component? My understanding is that I could get about 200k base at goldman and maybe a 20% bonus, this is for working in a high in demand field. Google/FB/Other job I can get 300k+ while working less hours, paid for lunch, better treatment, more respect.
    - southphillyman 9y ago
      That's a realistic compensation package for a normal Sr engineer role at a big bank ime. No, it's not Goog/FB pay but a lot of the jobs are available in LCOL areas like Delaware and the Triangle fwiw.
raesene9 9y ago
I'm of the opinion that all banks should be technology companies, in that pretty much all of their operations rely on computing, so the better they are at developing and operating computer systems they better they'll be able to do business. Unfortunately, many banks (at least in the UK market) seem to see IT as some kind of overhead, to be minimized in cost and/or outsourced (e.g. Lloyds outsourcing to IBM https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm_cloudy_outsourcing/ https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm...) Of course there are ranges of new banks (the UK has a range of challenger banks most of whom take a more tech-focused approach) to challenge the "traditional" approach, and it'll be interesting to see how that shakes out...
- oblio 9y ago
  Not only in the UK. France, at least, is also like that.
- tvanantwerp 9y ago
  100% agree. My wife works in private banking, and her descriptions to me of the IT/software environment they have to deal with are absurd. Recently, the integration of a new loan management system was badly botched and several clients have been hit by it. Bills not going out, therefore not being paid, therefore money being taken forcibly from their accounts without notice. And these are customers with millions each in the bank. This has been ongoing for a couple of months now. The client managers themselves are irate--they've been cultivating these relationships for years, and it's all been jeopardized. How can so many banks be so blind to the fact that everything they do depends on getting the technology right?
  - ohazi 9y ago
    Why is it always the "notifying" part that breaks with shitty software like this, and not the "money being taken forcefully" part, which always seems to work flawlessly? Doesn't that seem a little suspicious? If they were uniformly bad at writing software, the critical money handling part should fail at roughly the same rate. If they can get that part to work reliably, failure of other parts of the system seem particularly inexcusable.
cs702 9y ago
If by "tech companies" the OP means established technology companies like IBM, Cisco, and Oracle, as opposed to Silicon Valley upstarts, then I agree. Otherwise, I disagree. Most banks are large, slow-moving, bureaucratic organizations saddled with decades-old technology.
- s73v3r_ 9y ago
  Using the latest hyped thing does not make one a tech company.
Pxtl 9y ago
I'd like to see a tech company where the time to process a simple transaction like a balance transfer is measured in days.
mbesto 9y ago
The idea that companies can be defined as a binary "tech company" or "not a tech company" is a trope created by tech VCs/entrepreneurs as a means to signal that they are "special" from businesses that we created more than 15 years ago. Most of my clients (mainly PE investors) typically define companies as either "Tech enabled", "tech lead", "nothing". This means usually two things to them: (1) the more tech enabled the higher the margins (EBITDA) I can achieve and (2) the more tech enabled the higher the multiple I can achieve. And that's just it. Everything else is marketing.
DrBazza 9y ago
Really? Sounds like the author has never worked in either, and just reads news sites. Having worked in several of both 'MegaBank LLC' and 'A Small Tech Company', they're utterly different beasts. Just because both mention blockchain doesn't mean they're the same. Culturally, they're worlds apart. Banks offer a career path up and away from technology so you get unmotivated developers joining who are just looking for the next leg-up the career ladder. Banks are only driven to make money, and the "worst" of the employees are utterly driven by the end-of-year bonus, and to hell with anyone that gets in their way.
- ptc 9y ago
  From the article: > (Disclosure: I used to work at Goldman designing derivatives, not apps. Also I have a Marcus savings account.)
- joejerryronnie 9y ago
  While I do agree with your sentiment, switch "Banks" with "VCs" and "end-of-year bonus" with "IPO" and many people would consider your last paragraph an accurate description of the tech startup scene.
- s73v3r_ 9y ago
  I wouldn't say those things are what makes a tech company a tech company. "Banks are only driven to make money" If you don't think tech companies are the same way, you're sorely mistaken.
ABCLAW 9y ago
One of the large trends in financial technology development that I've seen is that banks seem to heavily prefer that their staff leave and form third party software service providing companies than hire and allocate resources to internal teams. This means transaction costs are driven up massively, but the leading industry players typically deploy innovations in tandem with their competitors. My banker friends have big problems trying to modernize sections of their operations on the basis that too much political capital is needed to liquidate entire floors of staff - but that restriction only lasts until someone has an off-the-shelf solution offering 25M in labour savings per quarter. These inefficiencies and cultural issues hamper execution leading to poorer client outcomes, lower margins, and weaker strategic positioning. I'm glad that some banks are pushing forward to gobble up that easy ROI, but I am concerned that the net effect of this type of automation is systemic risk, as the industry begins to bifurcate between low and high margin banks, and the latter are afforded accelerating capability to consolidate the former. Less players. More capacity. More reliance. Less redundancy. Not necessarily bad for John Q. Everyman, but if he's ultimately carrying that risk while pocketing none of the efficiency gains...
- deleted 9y ago
  [deleted]
drharby 9y ago
I work in a bank and man - shits cool af
mtgx 9y ago
For some reason, I thought this article would go into a different direction - like about how tech companies are borrowing money at record rates because of dirt cheap Fed interest, which to me is a sign of a new financial bubble.
libpcap 9y ago
Don't believe banks when they say they're a technology company. Banks are no place for coders. https://news.efinancialcareers.com/uk-en/276069/problems-with-coding-jobs-in-banks https://news.efinancialcareers.com/uk-en/276069/problems-wit...
jacksmith21006 9y ago
Really pretty much every company is a tech company in 2018 at some level.
- pixl97 9y ago
  "Software is eating the world", came out 7 years ago and is still as true as ever.
tryitnow 9y ago
This sounds like marketing baloney. I would bet most of that "engineering" headcount is actually just analytical headcount. not a bad thing, but it's not what we used to call engineering. This is part of an ongoing trend to describe everything as some form of "engineering." Honestly, if I'm going to Goldman for M&A - I want a human relationship. That relationship may be buttressed by research and analysis using "big data" and "machine learning" - but that's not engineering, that's just good research using the latest useful tools. I'm only addressing the actual investment banking component of GS. Sure, the consumer banking stuff requires technology and "engineering" but there's absolutely nothing new about this, it's just that consumer banking has lagged horribly behind in consumer-friendly technology. Not much to see here.
- xkjkls 9y ago
  Goldman makes about half its revenue from market execution, which is basically an entirely engineering driven business. Only about 20% of it's revenue come from the "investment banking" sort of equity and debt underwriting type of activity.
- bboreham 9y ago
  Investment banking is not just advice. They also finance deals (i.e. come up with a few billion to make it happen) and execute - buy all the outstanding shares, or sell new ones in your IPO. And since those kinds of deals don’t come along every day, they maintain the capability by executing as broker and dealer all the rest of the time. (I know, I’m simplifying a lot. Hope it helps get the idea across)
- dgellow 9y ago
  To be honest Software Engineering looks like child play when compared to actual engineering work. Imagine the left-pad incident in a different engineering domain.
  - eximius 9y ago
    My imagination is failing me. What would the analog be?
k__ 9y ago
I don't have that feeling when I see online banking websites...
raverbashing 9y ago
Do they? Have they dropped "corporate" solutions that barely work, sold in golf courses to people that are not affected in the least by their decisions? Are they still using XML (or even worse, CORBA) as duct tape tying everything together? Have they dropped waterfall? Do they allow developers to have their say on architectures and solutions to use? Can they experiment with, let's say, Scala, Elixir or are they stuck with some old Java version and don't even think of adding a library besides the approved ones?
- lmm 9y ago
  Those are absolutely the right questions to be asking, and in my experience the answers are mostly "yes".
  - jrs95 9y ago
    Although from what I've heard, their version of moving from "waterfall" to "agile" could best be described as "iterative waterfall"
    - otakucode 9y ago
      I'd take that over the "agile means we can yell at developers and just tell them to give us exactly the same things following exactly the same processes, just FASTER".
- s73v3r_ 9y ago
  I wouldn't say any of that would make them not a tech company. Just a tech company that most of us wouldn't want to work at.
- lr4444lr 9y ago
  XML gets a bad wrap. For a protocol you can easily use over RESTful APIs and define a strong schema around, plus with all of the well-optimized libraries in major programming languages and IDE support, I don't really mind working with it at all.
eecc 9y ago
Just Banks? No, “tech” - which stands for information technology- is just about everything, every industry and job is affected and will change. Information is like electricity...
jnordwick 9y ago
Tech and finance are two very broad brushes that both paint a large swath of the business landscape. When speaking of finance there is everything from regional banks or loan originators to investment banks and trading firms. They are often very far apart in terms of culture, abilities, and pay. On the higher end in tech you get front desk trading, and they are most definitely a tech subsidy inside a larger institution. Some of the best tech teams I've ever been exposured to. I would take the best team GS over the best team from Google any day of the week. Even a mediocre front desk team are far far above average for the industry because they focus on getting the best talent. Even companies like Bloomberg that you wouldn't really think of beyond their news service is a massive tech company on the back end. They also have trading and low latency data infrastructures. One of the best teams i ever met was the core bond team at Bloomberg. I was blown away at how good they were. All these places know they are tech companies and pay appropriately. On the other side you have regional banks or even old school trading firms where they aren't really tech companies, but are mostly admin work with average pay. I've worked at tech companies and finance (hfts, algo trading, dark pool, banks), one thing i really like about finance is how difficult and interdisciplinary it can be. The tech problems I've encountered at finance firms have been so much more difficult than any other place. Google scales by throwing more machines at it, as most other web tech firms. Many times you don't have that luxury in finance. You have to be smart about it. Remember, Google gives it developers Go because it considers them above average cogs. Finance firms gives it developers APL/A+/KDB :) I jest a little, but I think there is definitely something telling in what is expected of you. You can go into a big bank and be a 9 to 5er in an auxiliary role. Or you can go in and workn your tail off and move up. But be prepared to work a lot for those bonuses.
- apaprocki 9y ago
  > Even companies like Bloomberg that you wouldn't really think of beyond their news service is a massive tech company on the back end The company's entire founding premise was to computerize tasks still accomplished by humans and paper in 1981. The News subsidiary was founded nearly a decade later in 1990. So it's more a case of the tech company considering News the "News-end" rather than tech being considered the "back end" :)
Tloewald 9y ago
It's still easy to tell banks from tech companies. Banks probably won't offer you 2FA or allow you to use secure passwords and will cheerfully bring down their website for maintenance for twelve hours at a stretch. They'll also charge you mysterious transaction fees.
thebouv 9y ago
Odd, I was just talking to someone yesterday about this because there was a lamentation of not enough "tech companies" in our area to work for. I pointed out that in the DevOps Handbook one of the lines I highlighted was that in 2013, HSBC (a very large bank) employed more software engineers than Google. So I went to search other tidbits like that and found that in 2015 Goldman Sachs employed more software engineers than Facebook. Banks aren't companies that have tech, they're tech companies that do banking.
atomic77 9y ago
Banks are better described as tech companies than the media / advertising behemoths. Information security is their bread and butter. As far as I can tell, the only thing that qualifies a company as "tech" nowadays is a technical tradition of building on open source from the ground up (eg. LAMP and its successors), while banks have traditionally been dependent on a constellation of vendors. The open source approach has proven a more effective model and it seems that this realization has finally spread outside of silicon valley. It's about time.
Talyen42 9y ago
what is a tech company, really? it's like saying something is a "concrete company" because that's what the corporate buildings are made of, or a "people company" because they only employ humans (terms that actually make sense: SaaS product (Salesforce, Dropbox), advertising marketplace (Google, Facebook)... and so on. Not "tech")
djtriptych 9y ago
I was just at a dev mixer and ran into an engineer at Bank of America. He told me they have 5000 Python developers on staff. I almost fell out of my chair - never would have guessed it. I know there's competition for top talent in NYC, but that's still a surprising number.
- jnordwick 9y ago
  Bofa has an abnormally large python group because of their back office stack. Afaik, the head of team responsible for that decision left a few years ago when it was having some major problems. I didn't realize it was still their bread and butter.
- denimnerd 9y ago
  There's 100k IT workers at BofA. The new software engineering stack is JIRA, bitbucket, Ansible, Jenkins, Artifactory, Sonar, etc. Every team is being trained on SAFe. Aka the executives choice for "agile" etc Also the working areas are being transformed from full height or quarter height cubes to open offices where employees no longer have a laptop and use a thinclient attached to standing desks. This is a dream for information security team but personally I hate it as I spent 2-3 hours working from home every day and the rest in the office. I don't want to develop though a windows GUI in the browser :/
freefood89 9y ago
sad
pc86 9y ago
Is this an entire article based on a subtitle on the summary page of the CEO's presentation? Not a bad advertisement for GS but come on, this is incredibly light on content, by which I mean there is absolutely zero content.
otakucode 9y ago
Banks are tech companies. When other countries say that they trust the US dollar, what do you think that means? It means they trust that our IT systems which manage the dollar are correct. They trust that when we say Warren Buffet has eleventy billion dollars, it actually means something tangible. And when they discover that trust is utterly and entirely misplaced, that our IT systems have been run as cost centers and endlessly rushed and slapped together and subjected to every form of intellectual rot that modern business practice could infuse into it.... well then things will get interesting. What if Walmart goes to pay off a supplier and the supplier asks for proof that the numbers Walmart is sending over the wire are actually backed by something and not just computational funny money? Well, we do have a form of money that's actually verifiably real and non-counterfeitable and doesn't just rely on some garbage IT....
deleted 9y ago
[deleted]
mwexler 9y ago
I work currently at one of the larger banks, and they actually like to describe themselves as "a tech company who happens to focus on financial things". It's as true as you are willing to believe it, but modern global money movement is really just tech these days, and has been so well before distributed ledger tech came along. Now, whether any of the banks are any good as tech companies is a different question. (some grammar fixed)
BigChiefSmokem 9y ago
Goodbye Wells Fargo, Bank of America, Citi, and the rest of the credit cartel! You will never be missed. Hello Wealthfront, Robinhood, Simple, and the rest of the movers and shakers!
- FireBeyond 9y ago
  > Simple, and the rest of the movers and shakers Yeah, a bank that announce that 1% of their customers had their account involuntarily closed with 30 days notice is sure to build trust in the new world order. https://techcrunch.com/2017/04/14/simple-account-closures/ https://techcrunch.com/2017/04/14/simple-account-closures/
  - tadfisher 9y ago
    Simple engineer here, not representing the company's views necessarily but relaying my own opinions. That situation was indeed a load of bullshit, but the other side of that coin is that we were doing something that has never had to happen in the history of modern banking, probably because it's insane. You see, normally when a bank is acquired by another bank, the acquirer gets the acquiree's FED terminals, ACH numbers, deals with Visa, etc. that make the transition more-or-less seamless for customers. So customers keep their cards, their direct deposit still works, their checks still work, and all they need to do is log in to a different website to manage their accounts. What we were forced to do was to essentially close hundreds of thousands of bank accounts at our former banking partner, open new accounts at our new partner, transfer funds, and issue new cards. And we had a contractual deadline before which the transition had to be 100% complete. We explored literally every other option available, including having BBVA acquire our ACH and Visa prefixes, but that was a no-go for reasons I'm not aware of. So we got the vast majority of our customers to make this painful switch, which was a miracle in itself, but we could not make it all the way down the list, and that sucked. New bank means new account-holder rules, customers changed email addresses/phones, customers moved, we underestimated the complexity/time requirements, all sorts of reasons applied; but the bottom line is that it was an inevitable situation for this kind of transition, and while we did what we could, we let some customers down (0.7% to be exact). At least I can say that we won't have to go through this again, and we're finally out of the woods with all of these platform transitions, and we're back to building products again. Feel free to AMA.
internetman55 9y ago
Haha, i heard lines like that at so many places i interviewed with. 'we're not a finance company, we're a tech company that does finance' etc
code4tee 9y ago
Very true (and actually has been that way for a while now). Big banks are largely tech companies that happen to do banking.
agumonkey 9y ago
isn't it everything ? everything is techno engineered these days uber the tech taxi amazon the tech store ... it's the engineered era
- mywittyname 9y ago
  Amazon is the way to put your product on the internet. AWS is their biggest profit center and a lot of Amazon's product sales are from merchants who happen to sell their product on Amazon (and use Amazon's fulfillment centers).
111_1_111 9y ago
It's getting harder to tell bloomberg articles from youtube comments.
abarringer 9y ago
heh yea, but no. All our clients are banks. I spent a good part of the day working on a project to convince them to upgrade their browsers to something that supports TLS1.2.
baxtr 9y ago
Isn't every company becoming a tech company?
pdeuchler 9y ago
Any sufficiently large company is a tech company, and any sufficiently large tech company is a bank. I'm pretty sure I originally heard that here on HN, I can't seem to track it down though. Seems to only have gotten more and more true as time goes on.
anonu 9y ago
I think the headline should be "It's Getting Harder to Tell Goldman Sachs from Tech Companies"... Insinuating that all banks are becoming tech companies is being a bit too generous. EDIT: I am pretty sure Bloomberg does A/B testing on their headlines to see which get more clicks. The URL of the article indicates that the headline may have been different to start out with. I've also often observed the same article on the web and the Bloomberg Terminal with different headlines.
lifeisstillgood 9y ago
meh. Software is a new form of literacy. No one goes around arguing if we have literate companies any more. It's like fish noticing water. Give it one more generation.
WalterBright 9y ago
I wish banks would learn what a "transaction" is. I have repeated problems with electronic banking where one party to the transaction shows it as a "success" and the other party shows it as a "failure". These problems tend to be tough for me to resolve as both parties insist on their end. I'm almost ready to go back to writing checks by hand. Waving a cancelled check around has always worked well to resolve transaction disputes. There's no paper trail with electronic banking.
awl130 9y ago
Sanford Weill, while chairman of Citigroup, once remarked that their main asset was information, not money (I haven't been able to find the quote but i distinctly remember it from my b-school lectures).
awl130 9y ago
Technology has always driven the financial markets--because better access to data is what allows new instruments and/or the active trading of new instruments.
adrianratnapala 9y ago
It would be helpful to use the full term Informatation Technology to understand these trends. Financial institutions and many other administrative orgs have always been about storing, distributing and processing information. They did this at scale even before the advent of computers. And they were also early adopters of computers. Their core business is providing service by using IT, whether that technology is computers, paper or human brains. Back in the long ago we didn't call them IT companies, because that designated a supplier of IT equipment (and we used to think of software as equipment). But now in the age of SaaS, we think of IT companies providing services using IT, just as the banks et. al. have always done. It's the same kind of business, evolved through two different paths, each with strengths and weaknesses. It seems inevitable that the two paths will merge.
colarb2000 9y ago
I used to work for a bank for a long time. IMHO, this new fascination with technology is kind of a fad and more of a lip service for marketing purposes. In practice, we still use MS Excel as per what we have been doing for the past twenty years.
patcon 9y ago
Anyone else think that the finance folks are just realizing what the tech sector gets away with by being incomprehensible and too fast for regulators? They're just doubling down and digging into tech to get away with more, for longer...
- dredmorbius 9y ago
  Finance have been doing this for a long time. See J.K. Galbraith's The Great Crash: 1929.
pmart123 9y ago
I think another interesting paradigm is breaking up companies by: 1. embracing technology early 2. chasing technology 3. last movers Recent examples of last movers that still have been extremely successful have been TJMaxx and Costco, both functioning with very little e-commerce presence. Why does this make some intuitive sense? The first mover has to break ground and if they are successful in applying innovative technologies, they reap the benefits. Meanwhile, several companies chase this innovator, building out similar systems, but these companies are unable to catch the leader, yet still spend a ton in R&D to develop the technology or spend too much acquiring it. Eventually, third-party software is built, commoditizing much of the associated costs. At this point, being the last mover is actually beneficial since the last mover can make the same technological shift without the associated costs that the chasers faced. In 2018, every company pretty much needs cloud instances, notifications, websites, etc. just like companies in the 1970s needed switchboard operators, fax machines, etc. I think its more a question of what companies quickly adapt fundamental new ways to think about an industry than whether the company employs a bunch of developers.

322 points by severine 9y ago

That being said I wouldn't say Goldman is your typical bank. Other banks are much slower at embracing automation and software development is more often than not considered as a non strategic commodity which budgets and headcount fluctuates up and down based on how much is available for discretionary spending. And the statements from its senior management are also too often aspirational and disconnected from the reality of the organisation.

wgerard 9y ago
That's interesting to hear! I'm going through "Flash Boys" right now, and it (to me at least) paints GS in a pretty negative light wrt their engineering culture. Granted the book mostly focuses on HFT firms, so I could easily see that GS is way better than most large banks but a bit lacking behind, say, Citadel.
- dsacco 9y ago
  > That's interesting to hear! I'm going through "Flash Boys" right now, and it (to me at least) paints GS in a pretty negative light wrt their engineering culture. As an aside, if you’re not planning to already, please read Flash Boys: Not So Fast when you’re done.
mipmap04 9y ago
As someone who works in the regtech / fintech industry I totally agree. Large portions of even the biggest banks are severely underserved technologically. There is a lot of wide open space here for technology that improves efficiency and accuracy related to compliance and general operating activities.
ionforce 9y ago
Is there a way to express/model technology so that it isn't considered this accessory but something that is core to their values/mission? Have we not done a good job of proving that investment in technology is a force/profit multiplier?
- 123212321 9y ago
  The truth is tech is not a force multiplier in finance, except for HFT. A few firms do pay a ton for engineers (higher than google level comp), but there are probably less than 5000 of those engineers in NYC.
  - nissimk 9y ago
    No. Many smaller financial firms derive their advantage from technology. There are many areas of finance aside from high frequency trading and they all benefit from significant force multiplication from technology. Even in the lowly area of operations automation there are firms that achieve significant scale with a small number of personnel through technological advantage. Granted this is sometimes achieved with a combination of in house and commercial technology packages, and sometimes the overall system design is done by non-technical people who just manage grunts to do all of the work, to say that these companies are not benefiting from force multiplying technology is foolish. There are very few financial professionals left who are not technology people in some sense of the word. Many firms benefit from better data. All that data needs to be acquired and managed. Many firms benefit from better analytics and models. Those models need to be tested and implemented. Your number is low.
    - 123212321 9y ago
      Source is I work in this field. There are positions with big data and data management that pay well. But the ones paying 350k+ are way harder to get than working at a top tech firm. Theres a quant trading firm called engineers gate that has a bunch of ivy league programmers, the top of the top. They havent made a nickel off their technology. They have a had a huge outflow of talent to Google and FB. People do get paid 500k+ to manage a firms data, but thats because the firm makes so much that the money splashes around, not because its a huge component of their profitability. Even at Two Sigma, the engineers are second class to the quants.

hownottowrite 9y ago

http://archive.is/D7vIv http://archive.is/D7vIv

adventured 9y ago

As witnessed by Bank of America's aggressive pursuit of blockchain technology & patents: "[Bank of America] has applied for or received at least 43 patents for blockchain, the ledger technology used for verifying and recording transactions that’s at the heart of virtual currencies. It is the largest number among major banks and technology companies" https://www.bloomberg.com/news/articles/2018-01-16/bofa-tops-ibm-and-payments-firms-with-most-blockchain-patents https://www.bloomberg.com/news/articles/2018-01-16/bofa-tops...

adamnemecek 9y ago
I feel like some of the reasons for this are political rather than technical.

claytoncorreia 9y ago

It seems like banks are realizing that they need to become tech companies faster than tech companies become banks.

lisper 9y ago
No, it's that it is much easier for a bank to become a tech company than for a tech company to become a bank. The barriers to entry for becoming a tech company are merely technological. They are not trivial to surmount, but they are surmountable. By way of contrast, the barriers to entry to becoming a bank are regulatory, and nearly impossible to surmount, at least in the U.S. When was the last time you heard of a new bank being founded here?
- tvanantwerp 9y ago
  I doubt a startup could become a bank. But if Google wanted to start a banking subsidiary? They could probably throw whatever money it takes at the problem and get it done. The real question is, would they care to do it?
- ahussain 9y ago
  https://monzo.com/ https://monzo.com/ - not in the US, but in the UK some start ups have started overcoming the regulatory hurdles.
- aianus 9y ago
  There are many, many small banks in the US; you can just buy one that already has a license. Certainly not insurmountable.
  - cocoablazing 9y ago
    None of those small banks are subject to the regulation that large BHC are. The potential barrier is off by orders of magnitude. The development cycle on those models is multi year. It would take a massive effort to recruit and build the quant teams alone, much less the finance, compliance, and legal personnel with the expertise.

organsnyder 9y ago

I work for a large healthcare system, and the "we're not a tech company" line is often heard. At many levels, I agree—we're in the business of delivering healthy outcomes to our communities, so we need to make sure that efforts across the enterprise support that—but it is often applied in ways that stifle us from delivering what we feel would be the most impactful and cost-effective solutions. I like to respond that Netflix isn't a tech company, either—they're in the business of delivering entertainment. Their position and reputation allows them to build a stronger engineering culture, but their technology still is subservient to their non-tech business goals. While "software is eating the world" has been quoted to the point of being a cliché, the organizations that recognize software as a competitive differentiator—rather than merely a cost center—definitely have an edge against their tech-averse competitors.

oblio 9y ago
I like to ask people what's the biggest advertising company in the world. You'd be surprised how many people don't know :)
- wafflesraccoon 9y ago
  Who is the biggest advertising company? Google?
  - oblio 9y ago
    Unless something changed recently, I believe that $95bn of advertising revenue makes them the biggest advertising company in the world :)
    - golemiprague 9y ago
      They are the medium, not the advertising company, the same way a tv channel is the medium, not the advertising company. WPP, Omnicom, Dentsu, those are advertising companies. You are conflating here two different things.

curuinor 9y ago

it is extremely easy to tell a bank from a tech company: tell if they hash their damn passwords. i'm not even talking salt here, just hashing

raesene9 9y ago
if you're thinking of some bank's propensity to ask for specific characters of passwords (rather than the whole thing) meaning they can't have hashed it, it's worth noting that many protect the passwords with symmetric encryption and then store the keys in an HSM to mitigate the risk of unauthorised access.
- Cyph0n 9y ago
  Unless the HSM is also doing the decryption, the key(s) can still be stolen while in RAM..
  - raesene9 9y ago
    indeed it is. With bank HSMs the encrypted key and characters from the user's password are passed into the HSM and the check is done within the secure hardware, the main system does not get to see the decrypted password.
  - fgonzag 9y ago
    That's the whole point of an HSM... A somewhat tamper resistant device that executes all encryption operations. You give it the hash and a reference to the the key, and it returns the signed data.

123212321 9y ago

This isnt really true. Banks dont pay anywhere near tech salaries. Its all lip service. The flow of good engineers is always banks -> tech companies and never tech companies -> banks.

ionforce 9y ago
I think it depends on the company. From my personal experience it's something like crappy software company << bank << startup So depending where you are in the software world, you can still be making a ton of coin at a bank.
samfisher83 9y ago
The salaries are good if you are banker.
vonmoltke 9y ago
They don't pay anywhere near top tier tech salaries. They are competitive below that (the Oracle/Cisco/IBM level).
xaybey 9y ago
I make significantly more at GS than I did at google. The difference is that the majority of my compensation comes from the yearly bonus - a quirk in finance.
- 123212321 9y ago
  As a regular engineer? Or is there a math heavy component? My understanding is that I could get about 200k base at goldman and maybe a 20% bonus, this is for working in a high in demand field. Google/FB/Other job I can get 300k+ while working less hours, paid for lunch, better treatment, more respect.
  - southphillyman 9y ago
    That's a realistic compensation package for a normal Sr engineer role at a big bank ime. No, it's not Goog/FB pay but a lot of the jobs are available in LCOL areas like Delaware and the Triangle fwiw.

raesene9 9y ago

I'm of the opinion that all banks should be technology companies, in that pretty much all of their operations rely on computing, so the better they are at developing and operating computer systems they better they'll be able to do business. Unfortunately, many banks (at least in the UK market) seem to see IT as some kind of overhead, to be minimized in cost and/or outsourced (e.g. Lloyds outsourcing to IBM https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm_cloudy_outsourcing/ https://www.theregister.co.uk/2017/06/06/lloyds_confirms_ibm...) Of course there are ranges of new banks (the UK has a range of challenger banks most of whom take a more tech-focused approach) to challenge the "traditional" approach, and it'll be interesting to see how that shakes out...

oblio 9y ago
Not only in the UK. France, at least, is also like that.
tvanantwerp 9y ago
100% agree. My wife works in private banking, and her descriptions to me of the IT/software environment they have to deal with are absurd. Recently, the integration of a new loan management system was badly botched and several clients have been hit by it. Bills not going out, therefore not being paid, therefore money being taken forcibly from their accounts without notice. And these are customers with millions each in the bank. This has been ongoing for a couple of months now. The client managers themselves are irate--they've been cultivating these relationships for years, and it's all been jeopardized. How can so many banks be so blind to the fact that everything they do depends on getting the technology right?
- ohazi 9y ago
  Why is it always the "notifying" part that breaks with shitty software like this, and not the "money being taken forcefully" part, which always seems to work flawlessly? Doesn't that seem a little suspicious? If they were uniformly bad at writing software, the critical money handling part should fail at roughly the same rate. If they can get that part to work reliably, failure of other parts of the system seem particularly inexcusable.

cs702 9y ago

If by "tech companies" the OP means established technology companies like IBM, Cisco, and Oracle, as opposed to Silicon Valley upstarts, then I agree. Otherwise, I disagree. Most banks are large, slow-moving, bureaucratic organizations saddled with decades-old technology.

s73v3r_ 9y ago
Using the latest hyped thing does not make one a tech company.

Pxtl 9y ago

I'd like to see a tech company where the time to process a simple transaction like a balance transfer is measured in days.

mbesto 9y ago

The idea that companies can be defined as a binary "tech company" or "not a tech company" is a trope created by tech VCs/entrepreneurs as a means to signal that they are "special" from businesses that we created more than 15 years ago. Most of my clients (mainly PE investors) typically define companies as either "Tech enabled", "tech lead", "nothing". This means usually two things to them: (1) the more tech enabled the higher the margins (EBITDA) I can achieve and (2) the more tech enabled the higher the multiple I can achieve. And that's just it. Everything else is marketing.

DrBazza 9y ago

Really? Sounds like the author has never worked in either, and just reads news sites. Having worked in several of both 'MegaBank LLC' and 'A Small Tech Company', they're utterly different beasts. Just because both mention blockchain doesn't mean they're the same. Culturally, they're worlds apart. Banks offer a career path up and away from technology so you get unmotivated developers joining who are just looking for the next leg-up the career ladder. Banks are only driven to make money, and the "worst" of the employees are utterly driven by the end-of-year bonus, and to hell with anyone that gets in their way.

ptc 9y ago
From the article: > (Disclosure: I used to work at Goldman designing derivatives, not apps. Also I have a Marcus savings account.)
joejerryronnie 9y ago
While I do agree with your sentiment, switch "Banks" with "VCs" and "end-of-year bonus" with "IPO" and many people would consider your last paragraph an accurate description of the tech startup scene.
s73v3r_ 9y ago
I wouldn't say those things are what makes a tech company a tech company. "Banks are only driven to make money" If you don't think tech companies are the same way, you're sorely mistaken.

ABCLAW 9y ago

One of the large trends in financial technology development that I've seen is that banks seem to heavily prefer that their staff leave and form third party software service providing companies than hire and allocate resources to internal teams. This means transaction costs are driven up massively, but the leading industry players typically deploy innovations in tandem with their competitors. My banker friends have big problems trying to modernize sections of their operations on the basis that too much political capital is needed to liquidate entire floors of staff - but that restriction only lasts until someone has an off-the-shelf solution offering 25M in labour savings per quarter. These inefficiencies and cultural issues hamper execution leading to poorer client outcomes, lower margins, and weaker strategic positioning. I'm glad that some banks are pushing forward to gobble up that easy ROI, but I am concerned that the net effect of this type of automation is systemic risk, as the industry begins to bifurcate between low and high margin banks, and the latter are afforded accelerating capability to consolidate the former. Less players. More capacity. More reliance. Less redundancy. Not necessarily bad for John Q. Everyman, but if he's ultimately carrying that risk while pocketing none of the efficiency gains...

deleted 9y ago
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drharby 9y ago

I work in a bank and man - shits cool af

mtgx 9y ago

For some reason, I thought this article would go into a different direction - like about how tech companies are borrowing money at record rates because of dirt cheap Fed interest, which to me is a sign of a new financial bubble.

libpcap 9y ago

Don't believe banks when they say they're a technology company. Banks are no place for coders. https://news.efinancialcareers.com/uk-en/276069/problems-with-coding-jobs-in-banks https://news.efinancialcareers.com/uk-en/276069/problems-wit...

jacksmith21006 9y ago

Really pretty much every company is a tech company in 2018 at some level.

pixl97 9y ago
"Software is eating the world", came out 7 years ago and is still as true as ever.

tryitnow 9y ago

This sounds like marketing baloney. I would bet most of that "engineering" headcount is actually just analytical headcount. not a bad thing, but it's not what we used to call engineering. This is part of an ongoing trend to describe everything as some form of "engineering." Honestly, if I'm going to Goldman for M&A - I want a human relationship. That relationship may be buttressed by research and analysis using "big data" and "machine learning" - but that's not engineering, that's just good research using the latest useful tools. I'm only addressing the actual investment banking component of GS. Sure, the consumer banking stuff requires technology and "engineering" but there's absolutely nothing new about this, it's just that consumer banking has lagged horribly behind in consumer-friendly technology. Not much to see here.

xkjkls 9y ago
Goldman makes about half its revenue from market execution, which is basically an entirely engineering driven business. Only about 20% of it's revenue come from the "investment banking" sort of equity and debt underwriting type of activity.
bboreham 9y ago
Investment banking is not just advice. They also finance deals (i.e. come up with a few billion to make it happen) and execute - buy all the outstanding shares, or sell new ones in your IPO. And since those kinds of deals don’t come along every day, they maintain the capability by executing as broker and dealer all the rest of the time. (I know, I’m simplifying a lot. Hope it helps get the idea across)
dgellow 9y ago
To be honest Software Engineering looks like child play when compared to actual engineering work. Imagine the left-pad incident in a different engineering domain.
- eximius 9y ago
  My imagination is failing me. What would the analog be?

k__ 9y ago

I don't have that feeling when I see online banking websites...

raverbashing 9y ago

Do they? Have they dropped "corporate" solutions that barely work, sold in golf courses to people that are not affected in the least by their decisions? Are they still using XML (or even worse, CORBA) as duct tape tying everything together? Have they dropped waterfall? Do they allow developers to have their say on architectures and solutions to use? Can they experiment with, let's say, Scala, Elixir or are they stuck with some old Java version and don't even think of adding a library besides the approved ones?

lmm 9y ago
Those are absolutely the right questions to be asking, and in my experience the answers are mostly "yes".
- jrs95 9y ago
  Although from what I've heard, their version of moving from "waterfall" to "agile" could best be described as "iterative waterfall"
  - otakucode 9y ago
    I'd take that over the "agile means we can yell at developers and just tell them to give us exactly the same things following exactly the same processes, just FASTER".
s73v3r_ 9y ago
I wouldn't say any of that would make them not a tech company. Just a tech company that most of us wouldn't want to work at.
lr4444lr 9y ago
XML gets a bad wrap. For a protocol you can easily use over RESTful APIs and define a strong schema around, plus with all of the well-optimized libraries in major programming languages and IDE support, I don't really mind working with it at all.

eecc 9y ago

Just Banks? No, “tech” - which stands for information technology- is just about everything, every industry and job is affected and will change. Information is like electricity...

jnordwick 9y ago

Tech and finance are two very broad brushes that both paint a large swath of the business landscape. When speaking of finance there is everything from regional banks or loan originators to investment banks and trading firms. They are often very far apart in terms of culture, abilities, and pay. On the higher end in tech you get front desk trading, and they are most definitely a tech subsidy inside a larger institution. Some of the best tech teams I've ever been exposured to. I would take the best team GS over the best team from Google any day of the week. Even a mediocre front desk team are far far above average for the industry because they focus on getting the best talent. Even companies like Bloomberg that you wouldn't really think of beyond their news service is a massive tech company on the back end. They also have trading and low latency data infrastructures. One of the best teams i ever met was the core bond team at Bloomberg. I was blown away at how good they were. All these places know they are tech companies and pay appropriately. On the other side you have regional banks or even old school trading firms where they aren't really tech companies, but are mostly admin work with average pay. I've worked at tech companies and finance (hfts, algo trading, dark pool, banks), one thing i really like about finance is how difficult and interdisciplinary it can be. The tech problems I've encountered at finance firms have been so much more difficult than any other place. Google scales by throwing more machines at it, as most other web tech firms. Many times you don't have that luxury in finance. You have to be smart about it. Remember, Google gives it developers Go because it considers them above average cogs. Finance firms gives it developers APL/A+/KDB :) I jest a little, but I think there is definitely something telling in what is expected of you. You can go into a big bank and be a 9 to 5er in an auxiliary role. Or you can go in and workn your tail off and move up. But be prepared to work a lot for those bonuses.

apaprocki 9y ago
> Even companies like Bloomberg that you wouldn't really think of beyond their news service is a massive tech company on the back end The company's entire founding premise was to computerize tasks still accomplished by humans and paper in 1981. The News subsidiary was founded nearly a decade later in 1990. So it's more a case of the tech company considering News the "News-end" rather than tech being considered the "back end" :)

Tloewald 9y ago

It's still easy to tell banks from tech companies. Banks probably won't offer you 2FA or allow you to use secure passwords and will cheerfully bring down their website for maintenance for twelve hours at a stretch. They'll also charge you mysterious transaction fees.

thebouv 9y ago

Odd, I was just talking to someone yesterday about this because there was a lamentation of not enough "tech companies" in our area to work for. I pointed out that in the DevOps Handbook one of the lines I highlighted was that in 2013, HSBC (a very large bank) employed more software engineers than Google. So I went to search other tidbits like that and found that in 2015 Goldman Sachs employed more software engineers than Facebook. Banks aren't companies that have tech, they're tech companies that do banking.

atomic77 9y ago

Banks are better described as tech companies than the media / advertising behemoths. Information security is their bread and butter. As far as I can tell, the only thing that qualifies a company as "tech" nowadays is a technical tradition of building on open source from the ground up (eg. LAMP and its successors), while banks have traditionally been dependent on a constellation of vendors. The open source approach has proven a more effective model and it seems that this realization has finally spread outside of silicon valley. It's about time.

Talyen42 9y ago

what is a tech company, really? it's like saying something is a "concrete company" because that's what the corporate buildings are made of, or a "people company" because they only employ humans (terms that actually make sense: SaaS product (Salesforce, Dropbox), advertising marketplace (Google, Facebook)... and so on. Not "tech")

djtriptych 9y ago

I was just at a dev mixer and ran into an engineer at Bank of America. He told me they have 5000 Python developers on staff. I almost fell out of my chair - never would have guessed it. I know there's competition for top talent in NYC, but that's still a surprising number.

jnordwick 9y ago
Bofa has an abnormally large python group because of their back office stack. Afaik, the head of team responsible for that decision left a few years ago when it was having some major problems. I didn't realize it was still their bread and butter.
denimnerd 9y ago
There's 100k IT workers at BofA. The new software engineering stack is JIRA, bitbucket, Ansible, Jenkins, Artifactory, Sonar, etc. Every team is being trained on SAFe. Aka the executives choice for "agile" etc Also the working areas are being transformed from full height or quarter height cubes to open offices where employees no longer have a laptop and use a thinclient attached to standing desks. This is a dream for information security team but personally I hate it as I spent 2-3 hours working from home every day and the rest in the office. I don't want to develop though a windows GUI in the browser :/

freefood89 9y ago

sad

pc86 9y ago

Is this an entire article based on a subtitle on the summary page of the CEO's presentation? Not a bad advertisement for GS but come on, this is incredibly light on content, by which I mean there is absolutely zero content.

otakucode 9y ago

Banks are tech companies. When other countries say that they trust the US dollar, what do you think that means? It means they trust that our IT systems which manage the dollar are correct. They trust that when we say Warren Buffet has eleventy billion dollars, it actually means something tangible. And when they discover that trust is utterly and entirely misplaced, that our IT systems have been run as cost centers and endlessly rushed and slapped together and subjected to every form of intellectual rot that modern business practice could infuse into it.... well then things will get interesting. What if Walmart goes to pay off a supplier and the supplier asks for proof that the numbers Walmart is sending over the wire are actually backed by something and not just computational funny money? Well, we do have a form of money that's actually verifiably real and non-counterfeitable and doesn't just rely on some garbage IT....

deleted 9y ago

[deleted]

mwexler 9y ago

I work currently at one of the larger banks, and they actually like to describe themselves as "a tech company who happens to focus on financial things". It's as true as you are willing to believe it, but modern global money movement is really just tech these days, and has been so well before distributed ledger tech came along. Now, whether any of the banks are any good as tech companies is a different question. (some grammar fixed)

BigChiefSmokem 9y ago

Goodbye Wells Fargo, Bank of America, Citi, and the rest of the credit cartel! You will never be missed. Hello Wealthfront, Robinhood, Simple, and the rest of the movers and shakers!

FireBeyond 9y ago
> Simple, and the rest of the movers and shakers Yeah, a bank that announce that 1% of their customers had their account involuntarily closed with 30 days notice is sure to build trust in the new world order. https://techcrunch.com/2017/04/14/simple-account-closures/ https://techcrunch.com/2017/04/14/simple-account-closures/
- tadfisher 9y ago
  Simple engineer here, not representing the company's views necessarily but relaying my own opinions. That situation was indeed a load of bullshit, but the other side of that coin is that we were doing something that has never had to happen in the history of modern banking, probably because it's insane. You see, normally when a bank is acquired by another bank, the acquirer gets the acquiree's FED terminals, ACH numbers, deals with Visa, etc. that make the transition more-or-less seamless for customers. So customers keep their cards, their direct deposit still works, their checks still work, and all they need to do is log in to a different website to manage their accounts. What we were forced to do was to essentially close hundreds of thousands of bank accounts at our former banking partner, open new accounts at our new partner, transfer funds, and issue new cards. And we had a contractual deadline before which the transition had to be 100% complete. We explored literally every other option available, including having BBVA acquire our ACH and Visa prefixes, but that was a no-go for reasons I'm not aware of. So we got the vast majority of our customers to make this painful switch, which was a miracle in itself, but we could not make it all the way down the list, and that sucked. New bank means new account-holder rules, customers changed email addresses/phones, customers moved, we underestimated the complexity/time requirements, all sorts of reasons applied; but the bottom line is that it was an inevitable situation for this kind of transition, and while we did what we could, we let some customers down (0.7% to be exact). At least I can say that we won't have to go through this again, and we're finally out of the woods with all of these platform transitions, and we're back to building products again. Feel free to AMA.

internetman55 9y ago

Haha, i heard lines like that at so many places i interviewed with. 'we're not a finance company, we're a tech company that does finance' etc

code4tee 9y ago

Very true (and actually has been that way for a while now). Big banks are largely tech companies that happen to do banking.

agumonkey 9y ago

isn't it everything ? everything is techno engineered these days uber the tech taxi amazon the tech store ... it's the engineered era

mywittyname 9y ago
Amazon is the way to put your product on the internet. AWS is their biggest profit center and a lot of Amazon's product sales are from merchants who happen to sell their product on Amazon (and use Amazon's fulfillment centers).

111_1_111 9y ago

It's getting harder to tell bloomberg articles from youtube comments.

abarringer 9y ago

heh yea, but no. All our clients are banks. I spent a good part of the day working on a project to convince them to upgrade their browsers to something that supports TLS1.2.

baxtr 9y ago

Isn't every company becoming a tech company?

pdeuchler 9y ago

Any sufficiently large company is a tech company, and any sufficiently large tech company is a bank. I'm pretty sure I originally heard that here on HN, I can't seem to track it down though. Seems to only have gotten more and more true as time goes on.

anonu 9y ago

I think the headline should be "It's Getting Harder to Tell Goldman Sachs from Tech Companies"... Insinuating that all banks are becoming tech companies is being a bit too generous. EDIT: I am pretty sure Bloomberg does A/B testing on their headlines to see which get more clicks. The URL of the article indicates that the headline may have been different to start out with. I've also often observed the same article on the web and the Bloomberg Terminal with different headlines.

lifeisstillgood 9y ago

meh. Software is a new form of literacy. No one goes around arguing if we have literate companies any more. It's like fish noticing water. Give it one more generation.

WalterBright 9y ago

I wish banks would learn what a "transaction" is. I have repeated problems with electronic banking where one party to the transaction shows it as a "success" and the other party shows it as a "failure". These problems tend to be tough for me to resolve as both parties insist on their end. I'm almost ready to go back to writing checks by hand. Waving a cancelled check around has always worked well to resolve transaction disputes. There's no paper trail with electronic banking.

awl130 9y ago

Sanford Weill, while chairman of Citigroup, once remarked that their main asset was information, not money (I haven't been able to find the quote but i distinctly remember it from my b-school lectures).

awl130 9y ago

Technology has always driven the financial markets--because better access to data is what allows new instruments and/or the active trading of new instruments.

adrianratnapala 9y ago

It would be helpful to use the full term Informatation Technology to understand these trends. Financial institutions and many other administrative orgs have always been about storing, distributing and processing information. They did this at scale even before the advent of computers. And they were also early adopters of computers. Their core business is providing service by using IT, whether that technology is computers, paper or human brains. Back in the long ago we didn't call them IT companies, because that designated a supplier of IT equipment (and we used to think of software as equipment). But now in the age of SaaS, we think of IT companies providing services using IT, just as the banks et. al. have always done. It's the same kind of business, evolved through two different paths, each with strengths and weaknesses. It seems inevitable that the two paths will merge.

colarb2000 9y ago

I used to work for a bank for a long time. IMHO, this new fascination with technology is kind of a fad and more of a lip service for marketing purposes. In practice, we still use MS Excel as per what we have been doing for the past twenty years.

patcon 9y ago

Anyone else think that the finance folks are just realizing what the tech sector gets away with by being incomprehensible and too fast for regulators? They're just doubling down and digging into tech to get away with more, for longer...

dredmorbius 9y ago
Finance have been doing this for a long time. See J.K. Galbraith's The Great Crash: 1929.

pmart123 9y ago

I think another interesting paradigm is breaking up companies by: 1. embracing technology early 2. chasing technology 3. last movers Recent examples of last movers that still have been extremely successful have been TJMaxx and Costco, both functioning with very little e-commerce presence. Why does this make some intuitive sense? The first mover has to break ground and if they are successful in applying innovative technologies, they reap the benefits. Meanwhile, several companies chase this innovator, building out similar systems, but these companies are unable to catch the leader, yet still spend a ton in R&D to develop the technology or spend too much acquiring it. Eventually, third-party software is built, commoditizing much of the associated costs. At this point, being the last mover is actually beneficial since the last mover can make the same technological shift without the associated costs that the chasers faced. In 2018, every company pretty much needs cloud instances, notifications, websites, etc. just like companies in the 1970s needed switchboard operators, fax machines, etc. I think its more a question of what companies quickly adapt fundamental new ways to think about an industry than whether the company employs a bunch of developers.