As a global bank, Citi takes an active approach to keeping on top of the latest technology advancements. Through internal innovation centres around the world, taking part in corporate programmes with startups, and longstanding partnerships with IT suppliers, the bank ensures access to the latest technologies.
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“Investigating technology and new startups is absolutely essential,” said Alistair Grant, CIO for Europe, Middle East and Africa at Citi. “It keeps our own people aware of what’s going on, on their toes and developing in a more agile way.”
The bank finds tech startups productive to work with as they can get products to market quickly without the constraints of regulatory controls and internal financial processes.
“We have the talent and capability internally to do it, but because we have to make sure our products from day one are very robust and combined with all regulatory controls in our various geographies, it can sometimes take us much longer. It’s a great shortcut for large corporates to get involved with startup companies which have raw talent, great ideas and solutions we can help them develop,” says Grant.
“They think of it from getting the solution right, they have an idea, and quickly develop – and they do quickly develop. As an organisation we can see those, and from across a number of startups almost cherry pick the solutions we’re interested in.”
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Treating startups differently
Grant says there are very few downsides to working with startups, but there are differences in the relationship with startups compared to established IT suppliers - mainly in the way startups approach the bank and the conversations that ensue.
He believes CIOs should treat startups differently from traditional IT vendors.
“If a major IT service company came to see me, I’d assume they understand financial services end-to-end, that they’ve done research on Citi and that particular area in the market. I’m quizzing them to see if they’ve done their homework and if not, there won’t be a second meeting,” he says.
But a startup does not need the same knowledge: “They’ve noticed a gap in the market, and they’re not sure if it’s applicable to Citi or not. I assume a far lesser degree of industry knowledge, so I treat them differently. It’s more important that they know their product and know the gap they’re targeting. It’s all about getting a second interview, and the bar for a startup is lower.”
Once the startup secures a second meeting, Grant says there is still an education process that needs to happen: “You have to accept that you will have to help them get on your preferred supplier lists.” If Grant is particularly interested in a solution, he will help the startup get the product into Citi: “It’s not a barrier just a necessary process.”
Citi was asked to be a mentor for startups involved in Accenture’s Innovation Lab for financial technology earlier this year, an experience Grant says he would happily repeat. The lab brought together early stage companies with executives from financial services, venture capital and angel investment firms.
“We met a number of startups through that initiative. From our perspective, it enables us to bring the outside in, and choose what to bring into Citi from a whole branch of different startups. Big data, cloud, agile computing - we’re really keen on all of those areas, and it was great to work with startups thinking in the same vein just a little bit quicker than we are,” he says.
Citi became involved with the 12-week innovation lab located on its doorstep at Canary Wharf. Grant says it was a good opportunity take part in local initiatives, and with companies appropriate to Citi’s technology portfolio. The bank is having conversations with a number of the startups about their offerings.
But Grant did not go into the mentorship with the specific aim of securing commercial contracts. “I put aside thoughts of commercial activity until the programme finished, as I felt the important thing was to do genuine end-to- end sponsoring - mentoring on how companies could be successful in a corporate environment, anywhere across the financial sector,” he says.
“I didn’t want them getting bogged down in how it worked specifically for Citi. Once the programme finished, if we wanted to talk to them further there was a different way to approach it.”
Grant mentored startups on technology as well as aspects of the financial services business, including how to get on a preferred supplier list, procurement strategies and marketing plans.
“We were able to help a startup change their approach – they thought they had a software solution, but really it was the technology they were interested in, and it reshaped their offering,” he says.
Out of the many technologies and threats emerging in financial services IT, Grant believes that Citi must keep working on intrusion detection. As a result, he mentored startup Digital Shadows , which develops technology for the “darker side” of the internet.
“There are a lot of very sophisticated groups who look to disrupt services for major banks and it’s not limited just to banks these days,” he says. “As these attacks get more sophisticated we have to be really on our game to make sure we have the best possible detection capability implemented in our systems. And at the very least be able to react very quickly if there is a new attack.”
Searching for innovation
For the last two years Citi has also been nurturing innovation at a number of locations across the globe investigating digital technologies. One such centre in Dublin is looking at developing business apps for tablet devices.
“The people are really enthusiastic about the products, and one or two are making their way into market. We have apps we’re giving to clients on their iPads, Androids and other tablet devices that gives them a view of their personal position,” says Grant.
He says that keeping a close relationship with established vendors is another way of staying on top of innovative technologies. It used to be a case of the supplier telling Citi about the next big product, but now the relationship means that products can be developed by the two companies together.