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Bank Tech Isn't Cool — and Banks Know It

As banks are well aware, many new software engineers would rather work for Google or a hot new start-up than enter the banking industry.

To attract talented new workers and to make sure they are up to speed on the latest trends, banks and technology vendors work closely with universities to help prospective employees develop the right skills before they even look for their first job.

"There is completely a growing need that we see across our firm," to develop and attract new talent in this way, says Jill Pineiro, the global director of JPMorgan Chase's (JPM) corporate development program.

JPMorgan Chase developed educational programs with Syracuse University that began in 2008 and the University of Delaware that began in 2010, committing over $30 million over 10 years and $5 million over 5 years, respectively, to groom talent at each institution.

"It's great for us because they understand that JPMorgan is, yes, a financial institution, but it takes a tremendous amount of technology" to run, she says. The bank "needs help there."

JPMorgan Chase also offers students paid internships through technology hubs on each campus.

Similarly, the technology vendor Fiserv (FISV) sponsors an honors class at the University of Nebraska-Lincoln's Jeffrey S. Raikes School of Computer Science and Management, where undergrads work on real-world problems for the core banking provider.

"We want to show that there are some very cool aspects" to creating bank technology, says Jonathan Nordhausen, a Fiserv director of product management who works in Lincoln, Neb.

"We are almost taking the voice of a customer to the next level," says Nordhausen. "They are coding how they would want to interact with the bank … five years down the road."

The six-year-old program has produced mobile apps that have made their way to the real world, he says. The program's latest project, which is still in development, is a money movement smartphone application for small-businesses and corporate customers.

About three years ago, NCR (NCR) moved from Dayton, Ohio, where it was based for about 125 years, to Duluth, Ga. NCR's decision to move was based in part on its desire to draw design talent from academic resources, such as Georgia Tech and Clayton State University.

These partnerships also help NCR retain its current employees by furthering their education, says Mary Kynkor, NCR's vice president of talent and organization effectiveness.

"People are looking for that investment from businesses," Kynkor says. They want to say, "Hey, this company really does care about me," she says.

VeriFone Systems' (PAY) chief executive, Douglas Bergeron, sponsors a scholarship for undergraduate women majoring in math, science, technology, or engineering at Georgia State University and the University of California, Berkeley.

The scholarship winners, who are also usually minority women, are paired with female technology executives who act as mentors.

"The technology industry in general, but specifically start-ups, is just completely devoid of women," he says. "If you believe the notion that technology advances society, then we are only getting about 50% of the horsepower right now because there are very few technology businesses started by women."

T8 Webware, a Cedar Falls, Iowa, company that develops software for retail banks, has 16 students working as interns in its 59-person workforce.

"When it comes to our interns our focus is to teach them how to program well for [Google's Android and Apple's iOS] devices," says Wade Arnold, T8's CEO. "We are consciously trying to flood the market with iOS and Android developers who are good."

Of the interns T8 offers to hire, nearly all accept, he says. "The idea is: 'Let's graduate 20 a year, who know how to do it, so we can pick up eight who are the best."

Colleges have also been proactive in establishing programs that develop talent for financial services companies.

Last week, Stevens Institute of Technology in Hoboken, N.J., launched its Financial Systems Center to run probabilistic modeling for brokers and traders. The aim of the center is to provide bankers and others with risk management tools.

The quantitative finance program is roughly two years old, says George Calhoun, the school's director of the quantitative finance. But for the past four years, he's been interacting with financial companies as they come and recruit at Stevens with computer science majors, he says.

"Citibank, JPMorgan Chase, Deutsche Bank, HSBC: these are all the firms that we have placed graduates with," he says. "I expect to be working with probably almost any major bank in this area."


(3) Comments



Comments (3)
I would say that bank tech can be cool, but in some cases it should not be. Like many other industries, you have at least 3 considerations when it comes to technology; back office, employee and client facing. From the back office perspective, yes, many banks are lacking when it comes to the "cool" technologies, but they really need to be focused on the basic blocking and tackling functions of banking. And those require extremely secure and reliable systems which are based on fundamental technologies that just work.

From the employee perspective, banks have been using "cool" tech for years but this has really come to a head in recent years with the integration of personal and work lives. Executives have been coming to IT teams in huge numbers recently saying they want to eliminate their "crack"berries and integrate everything into a single device. This has spurred innovation, and a lot of stress for risk, IT, and regulatory teams as they try and secure all of the information on these "new" platforms.

From the client perspective, banks must be innovative and meet the demands of the client base. Things like remote deposit via smartphones, wire approvals from mobile devices, and a host of other activities need to be on these "cool" new technologies and banks again are dealing with having to address security, risks, and other concerns to meet this demand.
Posted by Andy.Ai | Wednesday, May 02 2012 at 8:29AM ET
I think Bank Tech is only not cool, because of the way bank's do business. There is an opportunity here -- and I mean with start-ups, such as Bank Simple, etc. -- to develop a business model that promotes innovation.
The industry absolutely has a chance to step out in front of the social networks and create brand-focus technology that is a head above anything Facebook is doing.
Banks, after all, have an established relationship with consumers that is more compelling than photo sharing -- these companies hold everyone's cash.

Sean Sposito, reporter, American Banker
Posted by Sean Sposito | Thursday, April 26 2012 at 10:20AM ET
Agree that BANK tech is not cool - that is principally because banks are not good at Tech. Technology is not a core part of business strategy; it is a cost centre, an enabler for the business that is still run by traditional bankers. Graduate technologists would be better off seeking out the latest raft of Fin Tech startups/young businesses if they are interested in financial services. Examples: Kickstarter, The Receivables Exchange, Zopa, Lendingwell, Lending Club, The Currency Cloud, Transferwise, Seedrs, Funding Circle....the list goes on.
Posted by nzubairi | Monday, April 23 2012 at 12:41PM ET
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