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It's Getting Harder to Tell Banks from Tech Companies

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Re: It's Getting Harder to Tell Banks from Tech Companies

#221

Post by adrianratnapala »

bunderbunder wrote: post #148
shreyanshd wrote: post #98

Earlier quoted context omitted.

I work in technology for an investment bank and i hear “we are not a technology company” every quarter. Ironically, the tech we develop is a major factor, if not the only factor, for revenue. My motivation is instantly shattered when i hear that.

Funny, I go the other way, somewhat. Last time I was interviewing for jobs, one line I heard from a whole lot of financial companies was, "We like to think of ourselves as more of a tech company than a bank." 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 v…

> It's an instant turn-off for me when I hear something like that.

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.

Re: It's Getting Harder to Tell Banks from Tech Companies

#223

Post by kbenson »

shreyanshd wrote: post #98
organsnyder wrote: post #9

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…

I work in technology for an investment bank and i hear “we are not a technology company” every quarter. Ironically, the tech we develop is a major factor, if not the only factor, for revenue. My motivation is instantly shattered when i hear that.

Conversely, I work for a very small company where the owner likes to fashion himself running a startup even though he's been in business over a decade. Technology features heavily in what we do, but I cringe every time he says "really, we're a technology company".

Re: It's Getting Harder to Tell Banks from Tech Companies

#224

Post by adrianratnapala »

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.

Re: It's Getting Harder to Tell Banks from Tech Companies

#225

Post by fgonzag »

Cyph0n wrote: post #55
raesene9 wrote: post #38

Earlier quoted context omitted.

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.

Unless the HSM is also doing the decryption, the key(s) can still be stolen while in RAM..

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.

Re: It's Getting Harder to Tell Banks from Tech Companies

#226

Post by cocoablazing »

aianus wrote: post #218
lisper wrote: post #16

Earlier quoted context omitted.

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 ne…

There are many, many small banks in the US; you can just buy one that already has a license. Certainly not insurmountable.

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.

Re: It's Getting Harder to Tell Banks from Tech Companies

#227

Post by opportune »

samstave wrote: post #151
organsnyder wrote: post #9

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…

> "I like to respond that Netflix isn't a tech company, either—they're in the business of delivering entertainment." 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.

That was the entire premise. Netflix isn't a tech company in the same way banks aren't - technically. But obviously both functionally are since their entire businesses depend on their technology

Re: It's Getting Harder to Tell Banks from Tech Companies

#228

Post by opportune »

raesene9 wrote: post #70
tvanantwerp wrote: post #36

Earlier quoted context omitted.

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 i…

My theory has always been that the people in senior positions at these companies tend to be older and have come up through the ranks before IT was quite as integral to their operations. 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 co…

I'm positive this is it. You see this all the time with medicine and government too - lots of old, successful people who don't like having to adapt to something new and difficult to learn

Re: It's Getting Harder to Tell Banks from Tech Companies

#229

Post by MR4D »

hamstercat wrote: post #138
shreyanshd wrote: post #98

Earlier quoted context omitted.

I work in technology for an investment bank and i hear “we are not a technology company” every quarter. Ironically, the tech we develop is a major factor, if not the only factor, for revenue. My motivation is instantly shattered when i hear that.

I used to work in another financial-related company and "IT is a cost not a revenue center" was thrown around as often as possible. Raise, promotion, formation, a computer made in this decade, anything really would get us that answer. Not only from my boss, but from the IT's top director in various meetings and one-on-one. I used to find it highly frustrating and unfair given that the company would cease to exists wi…

This makes me both sad and happy. Sad, because that’s such a shortsighted view; happy, because I run a small financial services company and we compete with them.

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.

Re: It's Getting Harder to Tell Banks from Tech Companies

#230

Post by perseusprime11 »

samstave wrote: post #156
hamstercat wrote: post #138

Earlier quoted context omitted.

I used to work in another financial-related company and "IT is a cost not a revenue center" was thrown around as often as possible. Raise, promotion, formation, a computer made in this decade, anything really would get us that answer. Not only from my boss, but from the IT's top director in various meetings and one-on-one. I used to find it highly frustrating and unfair given that the company would cease to exists wi…

> I used to work in another financial-related company and "IT is a cost not a revenue center" was thrown around as often as possible 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 requireme…

We actually dropped the CFO and life is beautiful.
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