Barclays is working closely with startups to boost innovation in its IT strategy.
At the end of 2012, Barclays became the first major sponsor of Tech Hub Manchester, a community hub for technology entrepreneurs.
“Manchester and the university heritage are the pioneers of the computer, and we felt there should be a really strong tech presence in the area and we were keen to sponsor and support that ecosystem,” said Darren Earnshaw, IT director at Barclays who jointly leads the Barclays-Tech Hub engagement.
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Earnshaw, who is part of a team of 3,200 Barclays technology and operations staff in the North-West, says that a lot of the IT team were happy to get involved in the partnership: “This was seen as an opportunity to use some of the skills and experience of the staff to do something more directly related to their core skills, while still giving something back to the community.”
Groups from Barclays head along to the Tech Hub on a regular basis to provide support, take part in events and conduct presentations on topics such as how to sell an idea and market it; selling ideas to big companies; payment channels; as well as technical aspects such as security.
“We have got a lot back from the programme, as well as from the very nature of having staff work right next to the startups. The creativity rubs off on the staff and they bring it back to work and bring a buzz back into the organisation,” said Earnshaw.
Like many large businesses today, Barclays has to decide how to move forward with new technologies such as mobile, cloud and BYOD (bring your own device), but Earnshaw said the challenge for large organisations is avoiding any loss of innovation and creativity.
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“Innovation isn’t a new challenge, it’s a constant, but with the advancement of mobile and technology in this economic environment, it is something you can’t ignore now,” he said.
“When a big organisation looks for solutions, there’s a tendency to work with the strong supplier relationships which have been built up over time. These can work really well, but there’s a danger to becoming blinkered to new innovation going on in technology. And also internally within an organisation, it can lose creativity and the ability for staff to be innovative and create new ideas which are slightly out of the norm.”
Working closely with young companies is a new challenge for the bank, which is used to dealing with large IT suppliers. But taking the time to build relationships benefits both parties – young, growing companies get to learn from a global corporation, while employees get to embrace the startups’ enthusiasm and passion for innovation.
While the main motivation for Barclays is not to secure commercial partnerships, working with Tech Hub offers opportunities to source innovative software that the bank would not necessarily get from existing suppliers. Working closely with startups puts Barclays in pole position to begin commercial relationships at a very early stage.
Out of the startup companies in Tech Hub, Barclays has already pinpointed asset management software to fix legacy problems, and another piece of technology that focuses on HR functionality, team building and team work. Earnshaw admits these solutions are not the common new technology problems like cloud and mobile that you would expect young companies to be involved in. Referring to the asset management system, he said this is an area which other companies have been ignoring, but Barclays sees it as a good thing.
While the bank provides advice and opinions on how the product could be developed further, a commercial partnership isn’t at the forefront of Earnshaw’s mind. “We’ve not gone into it with the mind to mould companies, and we’ve not given this direct advice and support with the mind to buy the solution off them,” he says.
Earnshaw describes another company Barclays worked closely with which develops skydiving software. Unless Earnshaw’s idea of teambuilding is to throw his co-workers out of a plane, there was nothing to gain from working with this particular developer. But staff found it worthwhile to spend time with the company, offering advice on how to take the product global.
“There was nothing really we were going to get out of that one, but by having our staff talking to them, it helps them with that level of engagement. It’s a tangent to our staff’s day job, and they come back to the office, hyped and buzzed on creativity. The enthusiasm rubs off on them. This is probably the thing that has really helped us as an organisation,” he said.
Doug Ward, CEO and co-founder of Tech Hub Manchester, said he wasn’t sure about letting a large corporate work within the hub when Barclays first approached them.
“Our first instinct was ‘hell, no’, but I admire their persistence. They have 20,000 technology staff in their organisation, and really I don’t look at them as a bank, but a technology business that happens to do banking. Their leaders are constantly trying to push innovation in a stale environment,” he said.
“They approached us and said ‘we want a long term relationship’. If they said ‘we want to get access to latest innovation and talent’, we would have told them to go away. The companies we’re seeing succeeding are those who are able to access SMEs, by approaching community leaders in areas and commitments of a long-term nature and see a return. There needs to be a change in perception from ‘what can I get out of startups?’ to ‘what can I do to help’.”
Earnshaw said Barclays is now looking at how it can run internal hack events to capitalise on that enthusiasm and creativity to find new ways of problem solving.
Barclays is also looking at expanding its startup partnerships globally. “We have another relationship with Central Working which operates out of Tech City in London, but equally we’re looking at the likes of Tech Hub to move more globally,” said Earnshaw.
Tech Hub is a franchise, with hubs in London, Bucharest and Riga, and the founders are also hoping to take the initiative to China and Pakistan.
“In the 1990s, it was everyone for themselves - you would fight against the competition,” said Earnshaw. “But the more we can collaborate with large corporations and the technology community, that’s the way to be successful.”