It's Getting Harder to Tell Banks from Tech Companies
bloomberg.com
bloomberg.com
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.
You'd be surprised how many people don't know :)
Seems like a good argument that being tech-forward provides a multiplier on value versus doing the same old thing, if you believe that these are all just advertising companies.
Where did you get 110 from? I'm seeing 90 for last year.
$110B total revenue for 2017
https://abc.xyz/investor/pdf/2017Q4_alphabet_earnings_releas...
I'm not the one calling Google an all-advertising company, I'm just saying that if it is, it's by far the biggest.
It's shocking that people don't know it's Facebook.
And in their case not just in the world, but the largest media company in history by a very wide margin. People don't see any connection between William Randolph Hearst and Mark Zuckerberg; Facebook really has the best PR team.
If you're referring to AP and other news services, they pay quite a lot for that, so the reporters are paid. Also, they contribute their own stories from their paid reporters to the service for other members to share.
Remember, people don't just share articles, they share articles with their commentary.
("Content is king" was always a distraction. And that came from Sumner Redstone (Viacom), not Bill Gates, who only quoted it.)
Indeed. I was just reading about the local broadcast rules (specifically: Sinclair broadcasting wants to buy Tribune media, and the FCC appears to be saying 'go ahead".) . Some people are concerned that this violates rules against concentration of ownership in broadcast stations.
But doesn't Facebook operate in essentially 100% of US markets? Should we even care who owns the TV broadcasts?
The internet can, theoretically, have an unlimited number of competitors, so it's not regulated the same way.
Looking up the stats a couple of weeks ago during a different HN discussion I was shocked how popular TV still is across all demographics, but local content was a plummeting percentage of the total.
Don't mix source of revenue with core business, especially in multi-sided markets.
The rules of old business still applies in most organizations: the closer you are to the transactional point where money changes hands, the more you make. This many times means sales, then management, then finance, then marketing, then engineering, then back office.
The deal-makers can get by with a spreadsheet and a BlackBerry, but the rest needs serious amounts of technology.
Ideally advisory business is balanced with dealing and financing, but different houses will be slanted one way or another.
Now that I'm older and not working there anymore, I understand that it's a culture problem and that management just didn't know any better, but I've come to accept the fact that it was a great way to cut costs and get away with it. After all, they still have many employees and manage to make more profit year after year. It just made for a very demotivating environment.
This has literally always been the case with IT; they were always seen as cost-centers, not profit.... which is largely due to IT departments historically falling under the CFO....
CEO: "Keep these motherfuckers from spending money"
IT: if "You want this [project] to meet your requirements of [XYZ]?, then == $2000000
CFO: "Fuck you, lets do it for half that and drop security and accessibility as a result"
Ironically, the orgs responsible for technology “get it” the least, as they are in the business of ITIL bullshit and order filling. IT bureaucracy will spend $10,000 to save $0.10.
We’re prudent, we don’t like to waste money, and we analyze investments from every angle we can think of.
But we look at Tech (we don’t call it IT) as a profit center. We don’t invest in anything unless it can drive down costs, increase revenues, or is needed for regulatory or security reasons.
And when we pull the trigger, I want to make sure that we’ve got the best stuff on the market. Everyone uses either Macs or PCs (we’re agnostic), and run as many monitors as they need to feel productive. Everyone has an iPhone and an iPad. When the hurricane hit Houston, our office building was out of commission for over a week, but we kept running the business.
I want to make sure that Tech allows us to multiply our capabilities. We have a paperless office where any paper is scanned at hi-res, put into our systems and linked to client or regulatory records. Everything is shredded afterwards.
Long ago, I worked in IT, and was dumbfounded by the shortsightedness I saw inside companies who don’t know how to utilize IT. I love competing against those idiots now, because my capabilities are way higher and our cost structure is lower. If we didn’t have all our paper copies scanned in when the hurricane hit, we would have been dead in the water (sorry for the pun).
So, I really feel sorry for all those people who work for morons like the Parent describes, but here’s my recommendation: go start a company and run with your vision. You may fail a couple times (I did), but once you win - and it only takes once - you will never look back.
Appreciating something just because it's novel is bullshit. Appreciating something that solves an actual problem effectively.. that's where I want to be.
It's an instant turn-off for me when I hear something like that. These are companies that should be thinking of tech as a means to an end, and not an end in an of itself. Even when I worked at a major software vendor, the tech was still just a means to an end.
Companies too invested in tech tend to spend themselves into bankruptcy. Companies not invested enough in tech tend to be overcome by companies with better tech more slowly.
1. The person who said it may be fancying his own role as tech-heavy and might relate to his/her imagination of what tech-pure companies do. Saying, we are like Google, appeases the person saying it, and satisfies their ego.
2. Often candidates like listening to this. It may not have worked for you, but for the candidates who like hearing this, this works wonderfully. If I were to wager, this line works for more candidates than it pisses off.
While I can see why you find it grating, I think I would forgive them. Whatever else they are, interviews are also those awkward social moments when new acquaintances are just trying to push beyond small talk while trying to please each other. At this stage, it's normal for people to try a little too hard.
Interviews aren't really like a casual social interaction. Progressing past the initial phone call typically involves spending from several hours up to to a whole weekend on some cute homework project, shirking on one's current job for more phone calls, burning PTO for on-site interviews and whatnot. I've got precious little time I'm willing to spend on that sort of stuff, so it's in my interest to be supremely petty.
Our head of technology strategy for Americas is on hacker news at quarter to midnight. And hiring, not just for blockchain. (See my “about” text.)
Worth a chat if you’re in NYC or San Diego.
(I understand what you're going for and appreciate it, it's just interesting how social signals are interpreted given different industries / contexts.)
(... and yes, me posting this comment does, in fact, mean that I'm not doing any work while I post it.)
https://qz.com/668514/if-you-want-to-be-like-warren-buffett-...
Being aware of HN is part of my work.
In my case, we get four key dimensions of value:
1. Seeing trends early is in the job description, and a small slice of zeitgeist is here. I check here, several other self-selecting subgroup sites, a broad RSS list, white paper subscription sites, etc., and typically also read one subject matter book a day. With enough dots of info across a broad array of sources, you can see trends earlier.
2. Finding emerging tech likely able to go ‘enterprise’ is also part of my JD. That often depends on leadership. Some of those leaders are here. You can tell a lot about a company from its founders. I’ve been an extremely early customer of startups found here, years later they lead their segment and we’re already on board. Examples like Hashicorp or CoreOS come to mind.
3. Emerging debates that do matter are often here early, where threads are high quality enough to get exposure to well thought, good logic, alternative views. Being able to absorb more of those improves low data decisions.
4. You can even find talent early. Many met here have gone on to release awesome tools, join or found cool companies, get acquired by BigCos... it’s great to see talented and motivated trajectories and learn it’s not all just luck.
It would seem if we can get the data to banks such as MUFG in a usable format, then it presents a large opportunity, however how would one even begin to interact with such a large entity to explore it?
You’d troll their LinkedIn looking for a title that esonated, read the job description to be sure, and try connecting, exchange enough convo to move over to their bank email, and then share the idea.
In our case, I’m the right guy. You can email me (and connect on LinkedIn if you like) and I’ll reply with my bank email. Elaborate on the idea then.
I’ve got 250 leaders thinking about how they could use new kinds of data, we’ll connect you to right groups. Even I have a team of PhDs looking for interesting things to tie together to better serve communities.
Note though, getting capital isn’t our problem, we’re interested in more ways to give it out, use it, put it to work.
I kind of think that if an organization views tech as a competitive advantage and core competency, they are a tech company. E.g. Netflix may be in the business of entertainment, but they are also a tech company. Google may be in the business of selling ads, but they are also a tech company.
I think the point of the GP is to say that Netflix "isn't a technology company", but they don't parade around saying that. Netflix uses technology and innovation to the fullest as the means to accomplish the ends of delivering great entertainment value at a low cost.
I don't think it's as much about the "definition game" as about the message that is conveyed.
Slowly but surely, more and more companies are realising that their digital efforts are just as integral to their business as whatever else it is that they're doing. Every company needs to be a tech company now.
In Australia, Commbank realised this at a very early stage: there's actually very little differentiation between the financial products from bank to bank. Sure, interest rates change here and there but on the whole, everyone is the same. Commbank realised that they can make their internet banking and mobile apps just as much as their core product and their differentiator. People aren't going to stay with their bank because of a debit card, but they will stay the one with the better app with more features. They rolled out a bunch of firsts - peer to peer payments by bumping phones together in 2010, transferring money to others using just their phone number, or 'Cardless Cash' where overnight they updated their network of ATMs to allow withdrawals using their phone app.
Qantas is another example of a company that invests (for better or worse) heavily into their digital products all throughout the customer journey.
Every company needs to be apt at digital because, in one way or another, every company is a tech company. It's the successful ones that realise this and use it to their advantage.
I've heard this mantra for some years now (in various forms, eg "all companies are tech companies, or dying ones"), I wonder where it stems from.
You simply cannot exist if you are not a tech company due to the complexity of the regulations.
They don't even sell beverages. Their (mostly) independently-owned bottlers do!
I never agreed with this mentality. Advertisement is Coke's cost center; it's not what they sell. They sell licensing rights to soft drinks: that's what makes them money.
Advertisement is a cost of having a customer facing brand. Should P&G and Unilever be considered advertisement companies?
Absolutely. The value of their businesses are entirely based on the brands that they have built, and those brands are built by advertising. Making food to stuff in the boxes is just a cost of building a successful brand.
Foxconn, Qualcomm, and Samsung make their hardware.
Cognizan and InfoSys develop some of their software too.
http://www.goldmansachs.com/who-we-are/leadership/executive-...
Banks generally delegate responsibility for huge sums of money to quite a low level in the organisation, and their clients are usually much smaller than the bank is. There needs to be some kind of parity in the apparent seniority between client and bank. The CEO of an SME doesn't want to be dealing with someone who sounds junior when discussing deals regarding the total value of their company.
Banks are so large and complex that it's usually not far off the bottom wrung of the org chart that you're responsible for huge sums of money/risks/contracts. People in smaller organisations with similar monetary responsibilities (in absolute terms) are usually the senior ones with senior sounding titles.
For example, I was a lowly infrastructure engineer in a tier 1 global investment bank working in the platform engineering team not far off the bottom of the ladder, yet I was responsible for infrastructure spending decisions in the scale of 10-100 million dollars. A drop in the ocean for the IT budget of $5Bn dollars, but a larger monetary responsibility than the CEO of a mid sized company has. So yes, I was called a VP.
> Prior to assuming his current role, Mr. Chavez was Chief Information Officer, responsible for the Technology Division
Profile on him from a few years back: https://www.nytimes.com/2016/04/03/business/dealbook/goldman...
I worked at a place where the CIO was a lawyer who knew the business really well, but no real tech in his background.
His only knock was that he believed the Cyber Security FUD too much.
Other than that, solid guy and I'd work for him avain.
knowing multiple people from netflix; this is literally a very-uninformed comment...
Much of what you even KNOW about cloud-computing, spot markets, streaming, CDNs, etc was pioneered by netflix.
They are secretive, but innovative as heck. So, your comment is a big NOPE.
Let's not overstate the case. Much of this was around before (sometimes long before) Netflix's digital rise.
Better to say "software ate the world, but netflix has eaten the software" by almost singlehandedly wiping all its upstart competitors from "indigenous tech companies."
To some extend, Netflix deserve some credit for tech. A non-dotcom running tier one CDN is not a small deal.
Yet, they are still a small fish "in the bigger picture of things" though.
People don’t mind trying out a new entertainment service by a small startup especially they get a free trial month. If it breaks, so what? The same cannot be said about places they choose to manage their finances or health.
Perhaps it might be more promising for a new partnership by big-names in adjacent industries, such as the Amazon-Berkshire Hathaway-JP Morgan healthcare initiative, to disrupt these trust-based industries.
If there is a good way to accelerate the process of consumer trust building, it might allow more newcomers a chance of disruptions. It should result in lower costs and economic surpluses for the consumers. ‘How?’ is the 64-million-dollar question.
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...)
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...
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?
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.
So they don't understand technology and therefore tend to not take it as seriously as they should.
That said, that argument starts to hold less water these days. I had my first job in a web-focused bank 18 years ago now!
One of the consequences I've seen (and I'm guessing its even more prevalent these days with easy access to cloud computing resources) is that bad IT in banks leads to the rise of Shadow IT where departments take it on themselves to work around the main corporate IT function.
*Business management is process management for most organizations.
Maintaing their mess costs massively and large projects carry risks and a bad track record no one on top can support.
Too bad the fintech revolution lost some of its momentum challenging the profitable areas of banking
And yes the point about risk of new projects... who wants to lead a project to replace a mainframe system that's been running successfully for the last 30-40 years and if it goes wrong you're guaranteed to be on the front page of the papers...
I wonder if a pattern will emerge where big banks let the challengers develop the tech, then they buy them and move across to it, once the kinks are all ironed out.
I'd argue regulatory oversight also makes innovation and risk taking less viable because every failure will be noticed and require explanation, which puts a damper on "fail fast." You can fail fast internally during your SDLC but doing so in front of an external customer is an extraordinarily bad idea.
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...
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.
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)
Imagine the left-pad incident in a different engineering domain.
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.
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.
As an aside, if you’re not planning to already, please read Flash Boys: Not So Fast when you’re done.
Have we not done a good job of proving that investment in technology is a force/profit multiplier?
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.
Even at Two Sigma, the engineers are second class to the quants.
Edit: maybe $350k is at the border for that 5 each estimate. But i still think you're of by an order of magnitude in nyc in general.
Now a lot of the time, firms can get a better product by purchasing one than trying to build something in house (where anyone producing HFT tech won't sell that product because it's an immensely valuable trade secret). This said, I'm sure there are forms of intelligence gathering that is also built in house by firms that allow them to implement market beating strategies.
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.
> (Disclosure: I used to work at Goldman designing derivatives, not apps. Also I have a Marcus savings account.)
"Banks are only driven to make money"
If you don't think tech companies are the same way, you're sorely mistaken.
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.
The flow of good engineers is always banks -> tech companies and never tech companies -> banks.
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.
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.
More important than the company name, you should make sure to join the right role for you in the right group.
Could you explain what you're getting at?
The fact that bonus is 50+% of base is normal for those roles, more normal than faang comp. Compensation is just structured differently, so it isn't useful to use it as a measure of seniority between the two industries.
It happens earlier in banks, but for most banks, it still happens at the level of Director (as opposed to Partner), not VP. I wasn't comparing comp structure to compare seniority. I was using comp structure to guess at seniority within the ladder of BB Banks and then comparing roles.
On the trading desk, your bonus is often often open ended, or if you are doing strategy work then a percent of pnl.
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?
Just a tech company that most of us wouldn't want to work at.
JSON is king.
The data teams I work with don't know SAS and some members aren't even that facile with Excel, opting to use Apache Spark (mostly Python, but also Scala bindings) or pandas instead. Almost no one does serious data work on their local machines, and there is a big push to store all of our data off-prem.
The dev teams I work with actively experiment with different cloud-based architectures, devops automation tools, database solutions, etc.
From a product perspective, lots of teams use agile workflows, but each team is allowed to (and encouraged to) choose their own style of getting work done.
This is not meant to imply that banks have largely moved to this model; I think that we are the exception rather than the rule. This is _also_ not meant to imply that top-down corporate "solutions" don't affect us, and that greed has been completely factored out of the equation. But I've been pleasantly surprised by how much leverage and freedom we have as the "tech department".
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.
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" :)
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.
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.
Otherwise, I disagree. Most banks are large, slow-moving, bureaucratic organizations saddled with decades-old technology.
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.
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....
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 :/
"[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...
The real question is, would they care to do it?
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.
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.
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.
Now, whether any of the banks are any good as tech companies is a different question.
(some grammar fixed)
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")
See J.K. Galbraith's The Great Crash: 1929.
uber the tech taxi
amazon the tech store
... it's the engineered era
Hello Wealthfront, Robinhood, 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.
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.
The end user experience, not so great.