Events around Facebook and Cambridge Analytica have made us revisit what we wrote a year ago. We asked then why no one was talking about the culture of Tech. Now we ask again, why culture should matter to Tech.
Our article then, asked why we weren’t all talking about culture in FinTech, given what we’ve learned in banking. Now, one very busy year later, we’ve revisited this article in the large, dark shadow of recent revelations regarding Facebook and Cambridge Analystica’s harvesting and handling of personal data for commercial gain – and Facebook’s Vice President Andrew “Boz” Bosworth’s 2016 comments that appear to accept the physical and social risks the company has created for users in its quest for continued growth.
While it’s clear there are people working in these organisations who are deeply concerned about these views and practices (indeed both stories are the result of employees’ actions), the information they’ve shared presents a worrying glimpse into the mindsets of hugely influential TechExecs and the organisation cultures and norms they are creating; norms being echoed in the FinTech sector.
If you search for “FinTech culture” on your device, the results often talk about a “new” culture of innovation sweeping away the “old” banking culture. And bankers do appear to be learning, albeit the hard way.
But given the growing importance of Tech in financial and other services, surely we also need to be focusing on the developing cultures of the Tech and FinTech sector, and asking the same questions of them as we asked the banks. Are you balancing the wider public good with the nurturing of strong, dynamic businesses? What can “new” businesses learn from the actions of the “old”?
Let’s think for a minute. Let’s think about businesses controlled by a relative minority, often over-influenced by charismatic individuals, pursuing an opaque strategy that can focus disproportionately on growth, commercials and profitability, while showing a clear preparedness to cut corners and discard the rights and needs of customers, all-the-while failing, as an industry, to challenge its accepted norms. Before the 2008 financial crisis it’s fair to say many banks were in this place. Is this what Tech could be?
Reading the recent news reports it feels like all those charateristics are thriving successfully in the Tech sector and potentially in the FinTech sector, regardless of the goodwill with which they were founded.
There are functional reasons for this. The focus on growth and proftability is often due to the influence of investors and pure business realities. And getting a business off-the-ground and thriving is often due to dynamic, passionate individuals and tightly knit teams, working with a single-minded focus to achieve and a keenness to challenge accepted ways of doing things.
We think it’s important that Tech and FinTechs consider how their “new” norms develop for the long term. History shows us that as companies grow and more people join, the informality that make start-ups so nimble and successful become more difficult to maintain and can become a hindrance. Initial advantages of new, agile ways of working to develop and deliver tech solutions and services can mutate into cultural norms of over-working and a legacy of temporary fixes that often hinder scaling-up in the longer term and can hide flaws.
And firms who want to reach ever-larger numbers of customers will need to evidence easily their track record of having an organisational culture that demonstrates planning, monitoring and testing, to prove to investors and regulators that they have the ability to scale and satisfy customer demands safely and sustainably.
Creating a sector that is safe and sustainable is a key concern for consumers and governments around the world, as we continue to learn from the lessons of the “old” banking culture. The challenge is learning from the old while supporting the development of new industries. The first responders to this challenge are often the regulators, who authorise new financial businesses in part by reviewing culture-related indicators, such as governance and customer treatment.
However, at The Compliance Foundation, we believe regulators, governments and investors are not joining the cultural dots, nor are they engaging others in a debate on what culture they want to see developed in FinTechs and Tech more generally. In part this conversation is being stymied by a prevailing belief amongst tech leaders that compliance and any authorisation requirements is a bore and a barrier to competition – an adminstrative hurdle to be got over, rather than an opportunity to think about long term sustainability and relationships with the public and the wider economic ecosystem.
For all these reasons, we believe every Tech based business needs to take a hard look at its emerging “new” culture and consider, learn and engage with the wisdom gained so painfully from the “old” culture to ensure it is responsible and continuing to deliver with good socio-economic outcomes.
If events of recent weeks tell us only one thing it’s that the mistakes of the old are being repeated by the new. As the growth of the Tech and FinTech sectors accelerates, there has never been a more critical point to stop, reflect and consider what kind of a culture we want to see grow and thrive now and in the future. Please contact us if you would like to discuss developing and growing your organisational culture compliantly and sustainably.