Dan takes a look at why it’s so critical for CTOs and CIOs to be able to understand what is truly new and exciting technology and what’s not.
In my 2.5 years with WatersTechnology, there have been three notable iterations in financial services technology of “fintech bandwagon fans,” an extension of the traditional term that describes sports fans who only root for teams when they are successful. It started shortly after I joined up in August 2014 with talk of cybersecurity. It seemed that everyone I spoke to, every pitch that was sent to me, touched on cybersecurity and its importance in relation to the product/service/firm.
Then, as it tends to do, the bandwagon quickly shifted toward blockchain in the middle of 2015. There was a period where I could almost guarantee that I’d get at least three emails a day mentioning blockchain. It didn’t matter that the folks writing them didn’t even know what DLT stood for; they wanted to show they were in the game and staying ahead of the curve.
Most recently, the bandwagon has moved on to machine learning and—to a greater, broader extent—artificial intelligence. Again, the basic premise for all three is the same: It’s not about the actual technology; it’s about being a part of the next big thing.
Not New, Just Different
Granted, this concept isn’t new. Consulting firm Gartner created the “Gartner Hype Cycle,” which details the rise and fall of expectations of new technology over time. However, I like the term “fintech bandwagon fans” because I think it’s a better representation of the situation.
Take artificial intelligence (AI) as an example. One could argue that AI, in one form or another, has been around for decades. People interested in putting themselves in conversations about artificial intelligence are no different than those who decide to be a Chicago Cubs baseball fan after the team makes the World Series for the first time in 108 years. The technology, and the team, have always been around. You just decided to start rooting for it now because it’s popular.
It’s not as if this has only been happening over the past few years, though. Before cybersecurity it was the cloud or high-frequency trading or electronic trading or some other “new technology” that everyone wanted to associate themselves with.
David Saul, senior vice president and chief scientist at State Street, discussed this while speaking on the C-level panel at this year’s North American Trading and Architecture Summit (NATAS).
“I spend a good part of my time educating throughout our company trying to cut through the hype,” Saul said. “We’re very good in this industry coming along, whether it’s cognitive computing this year and blockchain last year. Big data before that, cloud. You can list all of them. If you put them in a context, a lot of them really aren’t that new. They are just a variation on something we’ve done before. … You need a balance between the hype and is this really different.”
So why now, after all these years of the same thing occurring over and over again, is it important for technology executives to hone their ability to sort through the hype and find true innovation?
The answer comes down to the consumerization of technology. Now, more than ever, new technology used in the capital markets is discussed in the mainstream. Big-time publications post stories about blockchain and artificial intelligence. People whose jobs have nothing to do with technology are interested and inundated with information about the latest innovative solutions.
The days of technology flying under the radar of business-side executives is long gone. Now everyone, to one extent or another, is educated, albeit on a basic level, on new technologies.
As front-office folks get more educated on tech developments, they’ll also be more likely to ask their IT team why certain things haven’t been integrated yet at their firm. And while there is some actual good, new innovation among these “fintech bandwagon fans,” there is also a lot of fluff and hyperbole simply created to try and draw attention to their firms.
That’s why it’s important for executives to understand how to sort through the bogus claims to get to what’s real. This has always been important to CTOs and CIOs, but it’s critical now due to the knowledge their business counterparts have.
So how can one do this successfully? It’s a question I’ve asked plenty of executives, and I’ve yet to get an all-encompassing answer. Strong relationships in Silicon Valley and London—both hubs of fintech firms—certainly help. Getting deeply educated on the newest technologies also doesn’t hurt. Understanding what are the key questions to ask folks dealing in each of these technologies is also a good way to show who really knows what they are talking about and who is just a fraud.
There might not be a fool-proof way to sort through the hype, but understanding that it exists, and that it needs to be dealt with, is half the battle.
Jesse Lund talks about real uses for DLT in the capital markets, lessons learned while rolling out IBM's blockchain platform, and what’s ahead for 2018, and into 2019.Subscribe to Weekly Wrap emails