The FinTech future

"For a long time, technology was considered to be primarily the “plumbing” in a dark room, mostly a support engine necessary to run the business and “keep the lights on”. Today, technology has been elevated to become a key business enabler"

Axelle Sznajer, Egon Zehnder


Few executive search firms have a dedicated Financial Technology (FinTech) practice, but Egon Zehnder created one, recognising that FinTech is a constantly expanding and evolving segment in need of high-potential talent. The team is seeking to uncover, attract and develop best-in-class from within and outside of the sector. This global practice area covers functional roles (such as CIO, CTO, COO, CDO) as well as commercial leadership positions relating to technology enablement within the sector and across its broader ecosystem.

While other areas of financial services suffered in the crisis, growth in FinTech is driven by digital transformation. Financial Service (FS) businesses are reshaping products, services and structures to become more customer-centric in an increasingly digital world. This is having a profound impact on what is required from senior executives both in functional and broader leadership roles across the sector.

Egon Zehnder’s consultants discuss the importance of working in partnership with clients, locally and globally, to help align leadership talent to this rapidly changing commercial agenda.

Laurent de Meeûs

Laurent has worked in the FinTech industry for over 20 years both as a strategy and search consultant. He is an expert on digital, financial markets infrastructure and insurance.

Sven Petersen

Sven leads the CIO/CTO practice and advises clients on leadership talent in the technology, media and telecoms sectors. He previously worked with tech start-ups and as a management consultant in the sector.

Axelle Sznajer

Axelle leads the FinTech practice from London, advising clients through searches and talent assessments across the IT and digital function in financial institutions as well as in the broader FinTech ecosystem. She has previously held senior roles in both the banking and technology world.


1

How have advancements in technology affected the Financial Services sector?

2

What key factors do you need to consider when looking for FinTech talent?

3

Where is the world of FinTech going to take us?

Laurent: Technology has always been a very important and relevant agent of change and innovation within FS. Technology professionals have always received much higher salaries than anywhere else and there has always been an interest from financial institutions to leverage technology to either cut costs or get closer to the end consumer.

There have been two main stages of evolution.The first was the ‘dot.com’ period. It was a time of experimentation and innovation, and was very important for a while until it quietened in 2002/2003. The second phase started in 2007/2008 due to the introduction of smart mobiles and tablets. The financial crisis also acted as a catalyst as it forced businesses to cut costs.

Today, finally, we see the emergence of an exciting phase where technology is seen as an agent of innovation, creating new lines of business and redefining the FS industry entirely.

Sven: Agreed. There are different dynamics: front-end technology penetrating the consumer space and, at the back-end, technology issues relating to the legacy and the infrastructure systems of big banks which are creaking with age and often in need of re-platforming.

This has real impact on the function and talent needs of clients. Increasingly Chief Information Officers are running the existing technology of banks and dealing with the infrastructure issues, if you like, but a new breed of commercially-minded digital innovators are also needed at the front-end to invent new ways of engaging with customers.

Axelle: There is certainly a lot of thinking and business reshaping around innovation. For a long time, technology was considered to be primarily the “plumbing” in a dark room, mostly a support engine necessary to run the business and “keep the lights on”. Today, technology has been elevated to become a key business enabler and there is a real shift on looking at ways to unlock commercial potential through technology innovation and more efficient business aligned technology platforms.

This means that operations and technology topics are gaining visibility within the organisation and are elevated to the executive level as well being addressed in Board discussions. As a result, clients seek to attract Executive and Non-Executives who are technology and digitally-savvy and, importantly, are able to understand and communicate how technology can shape the business. Leveraging its credentials in the sector and track record in the function, EZ is focusing on uncovering talent which combines technology expertise with strategic acumen, commercial nous and the ability to influence multiple stakeholders.

In this context, best practice can be found outside of pure Financial Services and a number of relevant disruptive models and more commercially oriented technology functions can be seen in other sectors. Underpinned by its reach across sectors, markets and geographies, and its collaborative model, EZ has demonstrated the ability to uncover and attract talent from very diverse sectors.

Laurent: There are a number of considerations and sources. The first is people with relevant experience in digital by definition a small pool, and those with a proven track record are in high demand. Another approach is to bring in people who have pure-play, digital experience gained in other industries. However, when you import them, there is always a risk of ‘organ rejection’. At best it can take quite a long time for them to start scoring points – but Egon Zehnder has developed a service to shorten and help with this, which we call Accelerated Integration and this definitely helps.

For innovation, the best people have a strong customer perspective and can apply knowledge in a new context. But you also need people who are a bit ‘spikey’ – prepared to be unpleasant – to drive change and convert the CEO as a key stakeholder. We have developed an approach to assess the potential of such people, aligning character traits to the strategic challenges of clients, which is very helpful in this. Once the CEO is onside, you can get a magical combination of an individual who can innovate, and who knows the industry and customer, underpinned by the CEO with permission to fail, which is important.

Sven: There is also a structural challenge in FS, because of the technology legacy. Large banks and companies have relied on resilient, but inflexible systems which make it hard to change course. So part of the talent requirement is to deal with that and to be comfortable navigating a big matrix structure and innovating on top of legacy infrastructure. When looking for talent to drive digital innovation, however, we need to consider relevant experiences and transformation journeys candidates have gained in other sectors who needed to digitise, such as music or newspapers. Our focus is very much on understanding the value of transferable skills in candidates who have relevant ‘battle scars’ of digital transformation.

Of course, we can increasingly look at digital disrupters in the FS space, such as PayPal, who have been around the block by now and even have a banking license. Another example would be the emerging peer-to-peer lenders. This is an emerging group of businesses set on disrupting the status quo and developing game-changing and exciting new talent.

Axelle: This requires organisations to be brave. It is about creating proximity between the business and its customer base being B2B(2C) or B2C, understanding how concepts such as Customer Centricity and Big Data analytics can significantly enhance commercial outcomes. While Financial Services is rapidly getting up to speed with those concepts and a number of organisations have already successfully embarked on this journey (i.e. Cards, Payments, Exchanges, etc.), some organisations are also looking at bringing talent from outside of the sector or from other geographies (such as Silicon Valley/Alley in the US). It is not just about creating new business models and driving an innovative approach but also importantly about creating a culture of change and enable a more “agile” mindset. While there is always the question as to whether the regulator will accept someone from outside the sector, this may be necessary at times in order to attract best-in-class.

Laurent: Technology will cause a number of massive organisational changes that we can’t predict. This will result in a period of change that is going to be disruptive for a while. Those who take this on bravely are going to succeed - those who don’t will eventually die. And so, it is going to be quite an age of transformation that will define the winners and the losers.

Sven: Ultimately what will stand out is leadership talent that has the drive, passion and energy to take these companies through their digital journey and transformation. These are hard jobs that require collaboration and influencing skills at an unprecedented level. I don’t know what banking will look like in the future, but I do know that technology will play a much bigger part as the world is only going to become more rapidly technologically advanced and therefore dependent. And with that comes an increased risk because any technology is hackable. I predict therefore that the technology security function will gain prominence quickly as one example – a trend we already see in the market.

Axelle We are still at the beginning. While there is certainly a lot of focus on FinTech, what it covers and how it is positioned in the broader Financial Services market segment, we believe the approach and methodology used to identify and develop talent in this space is very important. Right now we are doing a lot of advisory work with clients around what they are seeing across their businesses in terms of new (disruptive) operating models and how to scope roles, functions and responsibilities around complex and changing needs. Overall this is an area where a more transactional approach to talent may not work so well, but where a firm like ours is well placed to advise and support clients.