How to Hire an Innovator


7-7-14-emily.pngIf you want to hire a tech expert, you might want to look outside the banking industry.

One-quarter of banks with more than $1 billion in assets report technology and information security hires at the executive level in 2013, according to Bank Director’s 2014 Compensation Survey. Technology hires range from experts in areas such as cyber security, data analytics, or mobile applications.

JPMorgan Chase & Co. has lately hired from Silicon Valley, poaching from tech giants such as Yahoo and Google. With startup cultures growing in places like the Midwest’s Silicon Prairie, which encompasses parts of several states including Illinois, Texas and Missouri, community banks might find opportunities to lure talent away from tech companies, says Stessa Cohen, a research director with technology research and advisory firm Gartner Inc. Culture is fundamental. Of those reporting a technology hire in 2013, 60 percent cited corporate culture as a factor that makes the bank attractive to candidates, according to the survey.

Acquiring a startup firm is another way to bolster a bank’s talent roster. Spanish banker Banco Bilbao Vizcaya Argentaria S.A. (BBVA) acquired banking startup Simple in February. For BBVA, Simple will not only be a means to innovate, but will also “bring new talent into the bank,” says Cohen. Simple promised to revolutionize the banking industry with an elegant mobile app, no branches, free access to ATMs everywhere, and financial management tools. One Boston-area mutual bank with a board focused on innovation recently brought on several new hires from a failed start-up.

In April, Eastern Bank, with $8.7 billion in assets, hired Dan O’Malley, the former CEO of PerkStreet Financial, as the bank’s chief digital officer, spearheading Eastern’s new digital technology and data analytics unit. The circumstances were serendipitous: PerkStreet, an online-only financial services startup that offered lucrative cash debit account rewards tied to online checking accounts, closed in August 2013, citing an inability to attract new investors. Its FDIC-insured partners had been Bancorp Bank in Delaware and New York-based Provident Bank.

Three other PerkStreet executives joined O’Malley at Eastern, all with extensive technology experience within and outside the banking industry. John Magee, now Eastern’s chief data scientist, headed analytics at Mullen, a Boston-based advertising agency, prior to joining PerkStreet. Laurence Stock, senior vice president, emerging technologies, and Sean Boice, vice president, technology and analytics, both worked for several e-commerce and financial technology companies. O’Malley has a background in payments as an executive at Capital One Financial Corp.

The team could see that joining an existing bank has advantages, says Bob Rivers, Eastern Bank’s president. Eastern is rich in capital, leaving O’Malley free to focus on innovation and not on chasing funding to keep the business afloat. “They understood that, unlike other larger banks…they would be not only a very high priority for us but they would have very top-of-the-house attention,” Rivers says. Eastern’s board is also committed to innovation. Several board members have backgrounds in innovation and technology, and O’Malley and his team meet with the board’s innovation committee quarterly.

The new team will focus on building enhancements to the business, including an updated mobile banking platform that will launch in the spring. Under Magee’s leadership, the bank also has plans to mine the data found in the bank’s 93 million annual transactions, which will help the bank identify opportunities to better serve clients. Eastern Bank is also looking for new ideas outside the bank. Part of Stock’s job is to find technology companies to invest in or acquire that fit within the bank’s business model.

While Rivers describes Eastern Bank as supportive of the technology team, he also says that, like most banks, its culture is conservative. “It causes us to not be as open [to] exploring as many things as we should and not move as quickly as we should,” he says. The PerkStreet team, he hopes, will make Eastern quicker to innovate and more attractive to those with technology backgrounds. “If we don’t further adapt our culture, we won’t get more talent,” says Rivers.