By Charlotte Gréant*, Business Manager of B-Hive New York
While senior leadership from the New York banking scene, forward thinking tech startup founders and curious VCs start filling up the seats of the SparkLabs event venue - where B-Hive and IE are hosting the third Fin & Tonic New York event in its series – I sipped my refreshing gin and tonic and went over the event's promising line-up of keynote and panel speakers:
Catalina Daniels, Harvard Business School MBA and former Partner at McKinsey & Company. Who thereafter became CEO and advisor of several startups and CEO of the Special Olympics European Summer Games. And recently launched her own venture which aspires to make society respond to relevant societal issues.
Andrew Sachs, who joined Newmark Grubb Knight Frank as an executive managing director in its New York headquarters in 2013. As a 26-year real estate veteran, he has acted as strategic advisor and broker on behalf of numerous institutions and corporations on the tenant and landlord side, providing creative solutions to address their complex real estate requirements.
Kari Browne, a Senior Client Partner in Korn Ferry International’s New York office and co-head of the firm’s FinTech & Transaction Processing Services practice in the Global Technology Services Market. She specializes in everything FinTech – software, payments, core processing, and platform companies that serve financial services giants.
Ignace Bruynseraede, an experienced HR business partner at SWIFT, which is a global member-owned cooperative and the world’s leading provider of secure financial messaging services. As a Strategic HR partner, he challenges, coaches and supports directors and senior managers.
Nikhil Batheja is responsible for strategy at Citi Ventures, providing the team with research into new trends and opportunities as we look to grow and leverage continuous innovation in financial services. He has held several roles in strategy and finance across the organization. Most recently he supported Citi's Global Retail Bank in transforming and modernizing their distribution channels, an effort he started while working in London for the EMEA regional team. Nikhil has a BA in Economics from NYU and is based in New York.
Stephanie MacConnell is the Program Director at Empire Startups, one of the largest communities of FinTech founders in the world with hubs in New York, San Francisco and Toronto. A regular FinTech contributor for Forbes, Stephanie covers nascent trends ranging from millennial investing to banking the underserved, the future of payments and more. She puts on monthly meetups for a community of over 15,000 in NYC and SF, along with annual Empire FinTech Conferences and FinTech Weeks.
After a warm welcome from B-Hive and IE’s hosts, Catalina kicked off the evening setting the scene of today’s financial hiring landscape. She recalls, when she was in business school in 1991, working for Goldman Sachs was the hottest job you could get. It was better than consulting, better than corporates and better than anything else. Finance was top of the world.
I was wondering how that had evolved. So, I checked.
To my surprise, financial services have remained top of the chart. “In 2000 and 2005, around 35% of Harvard Business School graduates took a job in ‘traditional finance’ - that number has gone down to 30% in 2017.
"Interestingly enough, there has been a shift within financial services. Investment banking and hedge funds were top employers in the early 2000s but lost that position to Venture Capital and Private Equity in the last years,” Catalina said.
In summary, there has been a (slight) decline of students to the traditional financial sector but also a shift within the sector, affecting some players more than others.
“The bad news, I think, is that it is only the very beginning and that it will intensify, causing more pressure.
“We still haven’t seen a true disruption. The real underlying technology, blockchain, has the potential to revolutionize the financial sector. This, combined with the use of artificial intelligence, can truly fundamentally disrupt the sector. Look at what is happening in China. I cite TechCrunch: 'The messaging app WECHAT is becoming a mobile payment giant in China' and for your information, this was not published recently but nearly 2 years ago,” said Catalina.
It's simple: "evolve or die."
Four things Cataline would do if she were the CEO of a traditional player in the financial space
If Catalina would be a traditional player in the financial space, how would she prepare for what could turn out to be a disruptive tsunami?
“We live in times where uncertainty prevails and multiple bets are king. So, there is no magic solution for success, which can be synthesized in three points. What is certain, is that talent and culture will be critical to evolve. Indeed, a steady fresh ‘intake’ of talent will automatically give you access to new ideas and technologies and will automatically help you adapt your culture - easier said than done.
"How do you attract the brightest millennials and maybe more importantly, how do you retain them? Generation Z, the generation of my kids, is inherently different from my generation. And to make matter worse, how do you make sure that, in the process of attracting and retaining the next generation, you do not alienate your exciting workforce and key talent?" Catalina said.
While the audience was hanging on her every word, Catalina gave us four examples of what she would do if she’d be in that challenging leadership position of a traditional financial institution:
1. Set up a corporate VC fund
“And if I couldn’t do that I’d set up an accelerator,” Catalina passionately claimed. This is the perfect way to be in the flow and be on top of what is actually happening in your sector. Only the inflow of applications will give you a sense of what is cooking. But also, it helps you to build a network of fintech entrepreneurs - and maybe to hire them or to acquire them.
2. Hire entrepreneurs who have failed
“Many motivated, smart people want to become entrepreneurs today. And I wish you good luck if you’re trying to hire them, because they are on a mission, and it’s going to be extremely difficult to get them to commit,” Catalina said with a smile. “But in entrepreneurship, failure is still the norm. Even after seed funding, entrepreneurs have 7 out of 10 chances of not finding VC money to grow. And this means they will fail. Some will try again, but many will be happy to join a large financial institution which offers attractive opportunities. So, it can be a win/win to hire them."
3. Revamp your HR processes: hiring, promotion and compensation
“If I were the CEO of a large financial institution, I would personally invest a lot of time in this. Can I find a way to improve recruitment and base it more on a match between the personality of an individual and the culture of my company (instead of the CV and the job description)? How do I retain these wonderful young people? Do I need to define new jobs? What can I do to have the bosses of bright millennials and gen Z evolve in their minds?
“Only to solve these kinds of questions, I would be willing to reconsider my position not to work in finance,” Catalina says with a smile.
4. Ensure that my top management is exposed to change and open to change.
“And how would I prepare them?” she asks. “I would travel with them to China, for example. I would have them meet startups here in New York, the financial capital of the world. And If some of them resist the change and the new ideas, I would get rid of them.
“So, in summary, I’d say: I believe that the war for talent in fintech is only starting. And that it will intensify. To be on the winning side, financial leaders need to act now and take a multitude of actions. These actions will include revamping the HR processes but also finding ways to attract entrepreneurs and their technologies. Ultimately the winners will be the ones that manage to evolve fast enough and change their cultures. And as always, change starts at the top – so making sure that your top team is up to the job and open for transformation will be the first stem."
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