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solutions based on service-oriented architectures to have to take a job at one of the laggard banks using outdated legacy technology.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.