The pitfalls of Technology trends
The recent Tech Trends report by McKinsey accurately represents the general trends in technology in the UK market, such as:
- Process automation
- Process virtualisation
- The future of connectivity
- Distributed infrastructure
- Next-generation computing
- Applied AI
- The future of programming
- Trust architecture
Upon reading these trends, executives are often tempted to infer that they should be a part of them, and so they set out their technology strategies accordingly. However, recent advances in technology have generated both pitfalls and advantages for companies that mere trends do not capture.
The Marks Sattin Technology Division can help our clients to navigate these pitfalls by offering a synthesis approach in our consultation for executive hires. Clients needing new executives come to us not only because of growth requirements – we run searches because some executives have made significant mistakes.
The increased requirement for programming and trust architecture
The first trend in the McKinsey report I’d like to highlight is the drive for programming and trust architecture. In the last year alone, a non-trivial percentage of searches I have been involved in required the replacement of executives in technology and operations due to damaging audits from financial regulators. I have personally driven four confidential searches in the last ten months alone where the organisation suffered such audits.
For example, technology in asset management has seen great advances, especially in derivatives and crypto currencies. CIOs set out strategies to build platforms that not only update their client data and trends (usually pricing), but also guide their own investment decisions, reducing the input of a portfolio manager. Very trendy indeed! Two such searches were the result of mergers, the others because of failed audits.
We now advise any new client in asset management looking to hire a CIO to "watch out" for regulation. The need from our clients is not only for candidates with financial regulation experience, but also with a heightened sensitivity to regulation, preferably having witnessed (not caused) one or two failed audits themselves.
A growing reason for failed audits can be plausibly induced - the rate of technological change has left the changes in both regulation and ethics behind. Albert Einstein once said ‘It has become appallingly obvious that our technology has exceeded our humanity’. It is not always clear how newly built technology meets the set standard, and this increases the risk of mistakes. It only takes one mistake for the benefit of new technology to be offset in an organisation
The Chief Information Security Officer is now an essential hire
It also goes without say that new technologies embedded in organisations both increase security of their organisations, as well as make them more vulnerable. The Chief Information Security Officer (CISO) role has only just come into its own in the last 20 years. This has typically been regarded as part of the IT function (reporting to the CIO). Breaches in information security have been costlier to firms in all industries we have worked with than any other IT drawback. According to Forbes 60% of companies on average experience cyber-attacks, but from our experience at Marks Sattin we think the number is much higher. Surprisingly, mistakes have been made, not so much in the architecture and coding of technology, but in failed delegation and oversight of security tasks.
What trends does the McKinsey Report get right?
There are, however, trends in the McKinsey report that can be taken at face value and are genuinely informative. In particular I would like to highlight what I may call ‘the safer’ technology strategies, namely digital and AI transformation. While all data is regulated, the advances in technology do not seem to have challenged regulation in the same way. We have seen the infrastructure piece of organisations speed up processes, and thus we challenge our clients to look for candidates who take this as a given. For example, calculating derivatives for an asset manager is one thing and may be risky in regulatory terms; but moving from spreadsheets to python pricing infrastructure, or adopting the general so-called ‘Infrastructure as Code’ strategy, is something much more straightforward and beneficial to the firm. The responsibility of asset servicing industry is one which hitherto usually sits under the COO. We challenge our clients to establish more direct lines of report into the CIO. Settlement processes, voting capabilities, OTC reconciliation - all these are now inbuilt, bespoke, and are almost guaranteed to increase savings. We take this as a lesson for other industries.
To summarise, technology can both make and break a business, and it takes more discernment and depth to understand how it can be safely applied and implemented. At the heart of this discernment are the experiences of executives themselves, their strategies, and more importantly, their recruitment.
About Marks Sattin Technology Executive Search
At Marks Sattin, we have been working with specialist IT talent for over 30 years. We know what effective and competent IT executive leadership looks like, and we can help you source the best technology leaders for your business. Our established IT recruitment team has a well-earned reputation of being proactive and meticulous in their approach to sourcing top talent. For more information on how we match candidates with the right client, contact us. Browse our latest technology jobs or view vacancies in our other specialisms, including financial services and commerce & industry.
Browse our latest technology jobs or view vacancies in our other specialisms, including financial services and commerce & industry.
