The times they are a changin’, and culture needs to follow

“Nothing is scarier than telling people ‘you have to change’” were the words of Michael Kimmel, Professor of Sociology and Gender Studies at Stony Brook University.

Many of those attending Sibos this year would probably agree with Kimmel, operating in an industry somewhat stuck in its ways over decades. But most of the time change is for the best.

For the first time in the best part of a decade the changes in question aren’t linked to regulation but a cultural shift with an eye on a brighter future for the securities services industry.

For the only way to grow their business through desired FinTech developments, gender equality and safeguards against cyber crime is to change their culture.

Evidence suggests that almost every securities services firm has at least one eye on distributed ledger technology (DLT). This is being done in one of two ways; either through partnerships with FinTech firms or development within their proprietary innovation labs.

In both cases, securities services firms need to adapt their culture. The FinTech firms they are teaming up with are different beasts to your 100-year old mega institutions – despite often being run by ex-investment bankers – while innovation labs are being driven largely by millennials and the more technical minded. FinTech is also changing the behaviour of the customers, meaning that changing the status quo is vital.

If the attendance of all DLT panels at Sibos are anything to go by, the industry still has a lot to learn about the technology and its capabilities, and will rely heavily on the pros who know. Therefore adapting their culture to the ways of FinTech firms and millennials is crucial in furthering their understanding and eventually rolling out the technology.

“The difference between someone who knows and doesn’t know about blockchain is that one person has read two paragraphs,” Satvinder Singh, head of global securities services and head of GTB EMEA ex Germany, told me during the week. “This thing is complex. It’s across multiple markets, regulations and asset classes.”

There were also plenty more keynotes and panel discussions from the millennial and chino-wearing folk at this year’s Sibos, as the two worlds continue to collide.

One panelist this year hit the nail on the head when he said it is about finding the right balance between agile FinTechs and leveraging the historic benefits of banks.

Another evolving threat for the industry is cyber crime, with the only counter measure for these threats being a similar evolution within securities services firms.

Cyber attacks are moving on from solely being external breaches as individuals within financial institutions are being targeted through psychological manipulation such as phishing emails. Subsequently, educating and training staff through the entire company from junior roles to senior executives is crucial.

It’s no longer just a problem to be solved by IT teams but as an entire company. Reply to the wrong email, reveal confidential information or passwords and any member of staff could end up costing the company in both monetary and reputational ways.

The final cultural shift being called for at this year’s Sibos event was further moves towards creating gender equality. While this has been discussed at plenty of previous events, this year served as a reminder that everyone can do more.

The TED-style talk from Michael Kimmel, Professor of Sociology and Gender Studies at Stony Brook University was one of the most entertaining and insightful of the week. His view was that we cannot fully empower girls and women without engaging boys and men. He urged men to consider their relationships with wives, daughters, mothers and sisters outside of the work place and lean on those feelings towards them in how they interact with, and perceive, women in the workplace.

One panelist highlighted that “cultural change is the hardest to do in an organisation”, outlining a three-stage process in order to ignite a transformation. The first part was informing – what does culture mean/values of the organisation. The second was to engage with employees through ethical training and the third is to embed the change.

I recently wrote a feature about custodian banks needing to embrace the values of the millennial generation to capture the best talent in the market. Meeting their demands in terms of flexibility, job progression and a work/life balance is not easy for financial institutions who have operated in a certain way for so long. With this along with the factors mentioned above, securities services firms can no longer afford to ignore the need for a change in culture. For ignoring the glaring signs of change will be costly in the future.

FinTech is primed to take over significant parts of the industry – so embrace it and those driving it.

Gender equality is an important social progression along with bringing proven benefits to your business.

And finally, acknowledging the evolving threats of cyber crime and preparing your organisation is crucial, no matter how much time and effort it takes.

Nobody likes change, but ignore it at your own risk.