HSBC has opened a special office near Tate Modern and in the same building as rock and roll magazine NME to entice trendy developers to work for the bank, according to the bank’s CEO.
Stuart Gulliver told a conference in London on Friday: “There’s a cultural issue from a large incumbent organisation. Therefore we’ve lifted out about 3,000 staff that form the nucleus of a digital group and actually they’re positioned in the Blue Fin building in Southwark.
“Actually we felt having them in our building in Canary Wharf would either not create the right environment to hire the right people, because they didn’t want to be in that community, and on the other hand create some sort of tension issues in the rest of the cultural environment of the bank.”
The Blue Fin building, built in 2007, boasts “stunning views of St Paul’s, Tate Modern and Docklands,” according to its website, and features a picturesque roof garden. The office block is so attractive that it advertises itself for wedding hire.
As well as HSBC’s sizable innovation team, the Blue Fin building is home to Time Inc. UK, the magazine group that publishes titles like rock and roll weekly NME, design magazine Wallpaper, and fashion publication InStyle, among many others. (I did an internship at NME years back and can attest that it is pretty swish in there.)
HSBC’s Canary Wharf headquarters, meanwhile, is a thoroughly corporate affair. The 45-story tower is next door to Bank of America and a stone’s throw from Citigroup. Banker central, in other words.
Speaking at the second HSBC Innovation Summit in London on Friday, Gulliver said that the HSBC digital team in the Blue Fin building was part of the bank’s efforts to keep on top of the threat from fintech — financial technology — companies that have emerged in recent years to challenge traditional banking models.
Gulliver said: “To survive for 150 years we’ve had to evolve. Most of the risk we’ve dealt with is political. Actually what’s happening in the digital space is there is a threat, particularly to retail banking. There is a significant threat in payments, in wealth management.”
All major banks are experimenting with fintech in one way or another, seeing new technologies variously as a way to cut out costs, win over a new generation of customers, and hang on to the ones they have currently got by offering them a better service.
But many face a problem with recruiting the hoodie-wearing developers that populate much of the fintech world to the suit-and-tie landscape of Canary Wharf.
At a conference in London earlier this month the cofounder and CEO of fintech information company Orchard said he thought Goldman Sachs would struggle to launch its online lending platform Marcus because of recruitment. Matt Burton said: “The issue that Goldman has is it can’t recruit the talent that it needs for an industry that is changing all the time.”
Opening up a satellite office somewhere a little more cultural — the Royal Festival Hall, Southbank Centre, and the National Theatre are all a short walk away from the Blue Fin building — looks like a smart way for HSBC to avoid this issue, creating an environment that trendy tech types would be more likely to want to work.
But internal innovation isn’t HSBC’s only strategy. Gulliver said: “We’re also doing the classic thing that a lot of banks are doing like making equity in startups. Some of the technology you’ve seen in terms of using voice recognition to get into HSBC bank account, the ability to open a business bank account and scan your documents on your iPad — all of that kind of thing comes from investing in various startup.”
HSBC set aside $200 million for investment in fintech in 2014 and has backed startups like Danish trade finance company Tradeshift.
Gulliver said: “You don’t want to own them because as soon as you have 51%, a big company like us, the likelihood is you’re going to choke the life out of them. You want to have 25% and a board seat.”
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