Singapore: The Place to Learn Bank IT

Ivan Schneider, Writer, specializing in financial technology | 11/12/2012 | 9 comments

Ivan Schneider
Typically, if you want to gain experience managing the IT aspects of a bank merger, you’ll need on-the-job experience. Now, students at Singapore Management University will have the opportunity to get their feet wet with bank mergers and other big bank projects through a new partnership with BIAN, the Banking Industry Architecture Network. BIAN is a not-for-profit, member-owned industry organization that aims to set common IT standards for the banking industry.

At Sibos in Osaka, BIAN announced that the organization has partnered with Singapore Management University to create “SMU Teaching Bank” using actual vendor products, allowing students to work on actual banking solutions rather than just reading about them. Scenarios will include a core banking system replacement and a bank merger. Graduate students will manage projects while undergraduates will perform the IT work, according to BIAN executive director Hans Tesselaar.

That seems to be a great way to develop a pipeline of future IT professionals who know the latest frameworks and business practices in banking.

Or is it?

It might end up being a real let-down for students trained on BIAN-compliant solutions based on service-oriented architectures to have to take a job at one of the laggard banks using outdated legacy technology. They’d know that better solutions are available, but as junior members of the IT team, they’d have little standing to effect change. Imagine someone who knows how to do a core banking replacement being told to maintain COBOL code for the indefinite future because the funds aren’t available for an upgrade due to IT budgets going to regulatory compliance.

Considering the morass of legacy systems out there in the banking industry, perhaps it would be more useful to train people on the worst technology in the industry rather than the best. That way, they’d be pleasantly surprised when things eventually take a turn for the better. The problem with that approach is that nobody really wants to learn COBOL as long as there’s an ample of IT professionals who already know COBOL and who are unable to retire because their retirement savings have been decimated. Students are naturally drawn to the latest technology, whether it’s iPhones, Facebook, or Gangnam style. If a student’s going to learn financial technology, he or she is going to gravitate to the most elegant and pristine approach, and right now, that’s BIAN.

Accordingly, if banks hire recent grads with BIAN experience, they’ll have to be given close proximity to IT leadership, with plum positions in highly-visible business transformation roles. This jumping the queue may not sit too well with the IT people currently responsible for managing legacy systems, who won’t be as conversant with the new technologies.

There’s no easy solution to this conundrum. Perhaps a university with a large endowment could provide startup capital to form a real bank, which could then start a massive acquisition binge in the industry. This would be a well-capitalized entrant with a low-cost labor force and the tax advantage of a not-for-profit educational institution. Then, instead of firing redundant IT workers, “Bank-Dot-Edu” could simply turn the former employees into graduate students and adjunct professors, who would then be paid a nominal sum to manage a burdensome teaching and research load in return for the distant promise of a tenure-track position. As an added benefit, the banks with the worst systems may be bought up, cleaned up, and sold off in order to build fancy student gymnasiums.

In the comments, let’s hear what you think about the prospect of integrating highly-educated financial technology workers into legacy organizations.

View Comments: Newest First | Oldest First | Threaded View
Syerita Turner   Singapore: The Place to Learn Bank IT   11/27/2012 7:42:22 AM
Re: It's about culture
It could better the process and also teach those who are on the legacy systems that there are other options out there for them to learn. It is like bridging the gap between new and old, current and legacy. I think that the younger we teach technology and how to bridge that gap there will be individuals who will come up with some of the best ideas to better more legacy processes and systems.
Ivan Schneider   Singapore: The Place to Learn Bank IT   11/19/2012 4:19:10 AM
It's about culture
Thanks for all of your comments. I do think that the BIAN initiative is a valuable way to propel change in the banking industry, and also applaud Singapore Management University for incorporating BIAN into the curriculum.

Using the BIAN architecture will give students an idea of how things should work in an ideal situation. My main point is that in many of the bank environments graduates will find themselves in, the actual working environment will be a long way away from that ideal of a logically consistent and modular architecture.

Furthermore, given the often hierarchical and conservative business cultures at financial institutions, particularly in parts of Asia, it's hard to imagine a junior employee having the pull to convince senior employees that the bank should adopt new technological approaches. It's hard enough for the new guy to speak up, let alone lead a core systems revolution. 

That's why I think these graduates will have the best success, at least at first, working for technology vendors that work with the banks to accomplish business goals. That way, it's not the recent graduates who are responsible for promoting BIAN, but rather the tech companies that hire them. 
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singlemud   Singapore: The Place to Learn Bank IT   11/14/2012 10:51:36 PM
Re: Initiative
Totally agree with this. Hand on experience during college life can accelerate their career success
Pedro Gonzales   Singapore: The Place to Learn Bank IT   11/14/2012 2:00:32 PM
a good idea for now.
I agree that altough, these might not be the best way to train future students on bank mergers, its seems to be the best so far out there.  I think the challenge of any student is they lack the industry experience when its time for graduation which I think this is a great idea.  I think there will always be a gap between academia and industry.  Both, have different goals, the best way to decrease this gap is by more partnerships with industry on internships and projects.
kstaron   Singapore: The Place to Learn Bank IT   11/14/2012 10:38:21 AM
Send them back to school
Maybe they should be sending their employees to SMU. If they want to upgrade, but don't want jr. emplyees to jump the promotion queue, they need to bite the bullet and send the people they want to take over back to school to learn the new BAIN technology. If you had the opportunity to learn it with your company backing you, would you even hesitate?
stotheco   Singapore: The Place to Learn Bank IT   11/14/2012 6:53:22 AM
Re: Initiative
I am in agreement. By lessening the gap between the academe and industry professionals, the resulting technology and its usage is far improved. There will be much that is added to the knowledge bank as well, which is beneficial to most parties involved.
Susan Nunziata   Singapore: The Place to Learn Bank IT   11/12/2012 8:05:44 PM
It's already happening
Outstanding observations, ivan. The work at BIAN should be applauded. What you touch upon here is really at the crux of a tlent crisis in IT, and applies to many entry-level iT jobs. It will only be that  much more painful for graduates of this new program:

Imagine someone who knows how to do a core banking replacement being told to maintain COBOL code for the indefinite future because the funds aren't available for an upgrade due to IT budgets going to regulatory compliance.

While they may not have the skills to do a core banking replacement, many recent entrants into banking IT are probably horrified at the legacy state of banking infrastructure. In fact, the ubquitiy and state of technology available on most university campuses can't be matched once those graduates get into the enterprise, even if they're on the business side. Most organizations probably don't realize that an investment in technology is also an investment in their talent pool of the future.
David Wagner   Singapore: The Place to Learn Bank IT   11/12/2012 5:15:03 PM
Re: Initiative
@Ivan- It is interesting that you worry about the program being ahead of the technology most banks are deploying, because usually what I worry about with educational programs is that they fall behind quickly. They never seem to stay upto-date. If this one does, i think the least of a bank's worries is that their employees are realy well prepared.
Hammad Masood   Singapore: The Place to Learn Bank IT   11/12/2012 2:54:34 PM
Initiative
Its a wonderful initiative. I always feel there is gap between academia and industry. Such efforts can help the gap narrow down. 

Is'nt it important that what are the students given theoretical knowledge about, legacy systems or upto date systems ?


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