Revenge of the Nerds: Tech Gurus Take Top Posts at Banks
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Technology gurus aren't just for the data center anymore.
From national and regional institutions like Citigroup and SunTrust Banks, to community banks like M&F Bank in Durham, N.C., tech experience is a priority when it comes to recruiting talent.
It's another sign that banks have decided to stop procrastinating when it comes to spending big to upgrade technology.
The new emphasis on tech skills is coming in two forms, said Falk Rieker, head of the global industry business unit for banking at SAP. For one, banks want their highest-ranking executives to have plenty of professional experience in technology. Second, banks are looking for their chief technology officers to be well-versed in all sorts of tech issues and not be limited in their expertise to just compliance software or running a data center.
It's the new way of looking at a bank's technology staff, said Eric Anderson, who leads the financial technology practice at recruitment firm Egon Zehnder.
"In the old days the technology people were looked at as infrastructure, back-office, keep-the-lights-on type people," Anderson said.
A slew of recent personnel announcements demonstrates the trend, and Jim Sills' new job may be the quintessential example.
Sills on Tuesday was named president and chief executive of the $300 million-asset M&F Bank in Durham. The bank poached Sills from the state of Delaware, where he was chief information officer and secretary of the Delaware Department of Technology and Information. Sills has also worked for several banks.
More banks are going to be making CEO hires like M&F Bank, as they begin to realize that technology initiatives have implications throughout their companies, said Austin Adams, former chief information officer at JPMorgan Chase.
"That's what bank boards... are looking for, someone who has some understanding of technology and also understands the business," Adams said.
Adams himself is an example of banks' quest to lure more tech experts to their highest levels. The $38.6 billion-asset First Niagara Financial Group last month appointed Adams to its board. Other banks have recently added technology executives to their boards, including Citigroup, which appointed Gary Reiner, a former chief information officer at General Electric; Bank of Hawaii, which appointed Victor Nichols, a former North American CEO for Experian; and SunTrust, which appointed former Global Payments CEO Paul Garcia.
The Buffalo, N.Y.-based First Niagara is in the midst of spending up to $250 million to upgrade its technology. Adams was added to First Niagara's board to give advice on the project, he said. But he's also been asked to help the bank sell the tech program to the investment community, which has criticized First Niagara for the huge expense outlay. Adams is arguing that the project will end up saving the bank money, and that plenty of First Niagara's rivals are doing the same thing, even if they're being quiet about it.
"If it's well done, there are dramatic company savings," Adams said. "A lot of the same investments are also being made at other banks, trust me."
Banks are also poaching tech talent to run marketing. The $183 billion-asset SunTrust lured Susan Somersille Johnson from NCR to head its marketing division. The choice makes sense, Anderson said.
"There is a massive convergence between the chief marketing officer job and the chief information officer job, in terms of who owns data and who owns digital," he said.
The vast majority of banks' chief technology officers have historically come from within the industry itself. That's understandable, because the technology that banks deploy is extremely complicated, Rieker said. It has taken an insider to know banks' inside-baseball computer systems.
"Banks have been stuck in their own spider web," Rieker said. "They've needed people who know system functionality, batch processing [and] regulatory compliance. They've needed people who understand the spider web, but now they need to push beyond that."
Another example of this movement is BMO Financial Group's recent hiring of Jean-Michel Arès as its chief technology and operations officer. Arès had previously been CTO at Coca-Cola.
"In other industries, CTOs and CIOs have been coming from outside their own industry and that's been going on for years," Rieker said. "I expect banks to make more of these kinds of hires."