If I were to share the quotes from Mark Kimber and Simon Cooper with you without telling you the organisation they lead IT for, you would think this was an interview with two techies in a Silicon Valley startup.
Their enthusiasm for technology and, importantly in the current economy, tech people is infectious.
But Kimber and Cooper are equally enthusiastic about their organisation, JP Morgan, and its sector, banking.
As they point out, JP Morgan is more than a bank: it’s one of the world’s technology leaders and the UK represents a considerable part of the bank’s technology account.
“JPMorgan is a 25,000-person organisation,” says Mark Kimber, iCTO and EMEA CTO for the firm’s Investment Bank division. “And seven thousand of them are technologists.”
The US-based organisation, JPMorgan Chase, provides wholesale banking services to clients such as corporations and financial institutions as well as sovereign and hedge funds.
In the US its Chase operation is a consumer-facing retail bank which provides traditional checking accounts, credit cards and mortgage services.
It is the largest investment bank in terms of revenues, the largest credit card issuer in the US and one of the largest processors of transactions.
The bank grew considerably when Bear Stearns, a rival US investment bank, saw its market capitalisation shrink so much that at one point it had lost 47 per cent of its equity market value.
In March 2008 the US Federal reserve helped create a deal with JP Morgan and on March 16 of that year Bear Stearns, one of the most famous banks in US history, was subsumed into JP Morgan.
JP Morgan is a truly international bank with operations the world over.
“The markets never sleep; we operate from Tokyo through to Chile and in every market in between,” says Simon Cooper, CTO Core Processing.
Investment Bank CEO Jes Staley calls JP Morgan a technology company, and the importance of technology is felt right across the organisation.
“If we can’t clear transactions then it [technology] becomes very visible,” Cooper says of the pressure he faces.
The two UK-based technology leaders provide JP Morgan in Europe and globally with its infrastructure and back end technology. Kimber is CTO for EMEA and CTO of infrastructure globally, which includes the processing platforms for financial transactions, in short the infrastructure and production environment.
Cooper, meanwhile, provides the back end systems for the global investment bank, which includes the processing platforms for transactions, which Kimber describes as the “engine” of the bank.
“One of the things I like about the organisation is that it is very team-oriented, so we are two members of a wider technology team and it’s a very supportive set of relationships,” Kimber explains.
“We are joined at the hip and it is definitely a case of two heads are better than one,” Kimber says of his relationship with Cooper, who sees his interactions with the iCTO as a significant part of his role.
“My role is two-fold: to invest in the technology to make technology a better fit with the business, and to give support to Mark. As and when something happens we support Mark’s team and I think it’s a very good split as the investment team doesn’t get bogged down keeping infrastructure running.
“It also means I don’t get woken up at night,” he says with a definite smile. “It relies on a very good relationship and a high level of trust,” says Cooper.
In terms of reporting lines, Cooper works for the Chief Administration Officer (CAO) of the investment bank, who reports to the investment bank CEO. Kimber also reports to the CAO and to the Head of Markets Strategy.
Between them their operations cover both ends of the UK, with Kimber based in London but spending a lot of time at the bank’s Glasgow centre, and Cooper based in Bournemouth but spending a lot of time in London.
“The big challenge is data management, as volumes are going through the roof and the market is moving to higher volumes and smaller tickets and that means more and more data,” says Cooper.
“I think back to when I started and we worried about databases of 100 megabytes, now we don’t worry about terabytes. It brings a whole new set of challenges on tier management, backup policy and disaster recovery. When you are looking at large scales of data, the decisions we make are very different to five years ago.
“The bank has a mix of third-party software and in-house-developed applications. The challenge is how you plug it all together, because always buying and always building is not the way,” Cooper adds.
JP Morgan has an IT budget represents just 10 per cent of the bank’s turnover. Outsourcing is a very small part of the organisation’s strategy.
“We have some great technology clients and we are very close to some of the emerging trends, so we benefit from the influence with the technology markets,” says Kimber.
“The challenge is in joining the technology and getting the benefit for JP Morgan. For example we are doing some really interesting stuff around low latency, cloud, big data and mobility.
“I like marrying big suppliers with small providers of niche solutions. It is one of the elements I love about the job, as it really encourages innovation and for companies to work outside of their established working practices. Once you get the technologists together it’s pretty exciting and you couldn’t ask for more as a CIO.
“We are seeing an increasing use of tablets and there seems to be this sense that it’s OK to use a variety of devices to work. It’s terrific at a senior level, but the biggest concern is that we have the right security in place. In Glasgow we have a centre of excellence that has developed a wide range of mobile apps that promote productivity or supply access to our underlying platforms.”
There is a bigger business imperative to this innovation, of course.
“As a technology organisation we are mid-way through a transformational strategic re-engineering programme (SRP) and this year is vital for delivery. Delivering on the SRP and continuing to look at every operation to manage our cost base effectively will be a big priority in the financial year,” adds Kimber.
“We are also looking at how we foster innovation and respond swiftly and effectively to market changes. I have seen a lot of change and that will continue, so we need to respond swiftly. It all puts a lot of pressure on the technology department.”
Kimber says the ‘electronification’ of banking means that JP Morgan customers come face-to-face with many aspects of the bank, one of which is the strength of their technology.
“Over the course of seven years JP Morgan has built or acquired a vast portfolio of applications and tech platforms and the SRP programme is about getting to a target end state of fewer and better applications and technology. We are two years into it and there has been 100 per cent delivery on milestones so far.
“We want one system per asset class and function. Supporting fewer applications and providing a better service to the market is the goal,” he says.
For Cooper the transformation is a move to service-oriented architecture (SOA) so that JP Morgan can get maximum re-use out of the information it has.
“Constantly driving the cost lower because of the small-ticket world order means the technology price becomes very clear to the bank,” he says.
“The UK is well placed in global investment banking, literally so because of its central geographical location in the world. So, we have a high level of investment in this country. Asia and America are on either side. If you think of the world as a Venn diagram, we are the bit in the middle,” Cooper says of why such a significant amount of the JP Morgan IT estate is in the UK.
“So I think it’s a great place, but then I would,” Cooper jokes.
In each of the three zones of Asia, Europe and the Americas, JP Morgan has two technology centres and Cooper says this strategy ensures that the organisation can attract the best technology talent in each market.
The organisation has IT operations in Singapore, Mumbai, New York, Delaware and London, but a significant component of Cooper’s team is based in Bournemouth, Dorset.
JP Morgan is the largest employer in the south coast resort, and it’s not just the sunshine that has drawn it there.
“Bournemouth is a good stable workforce, while London is a very liquid recruitment market and higher cost. We make logic-based decisions on how to split the workload across our sites,” Cooper explains.
“I tell my Bournemouth team the only difference between them and the London team is the commute home. They are a very committed bunch. There is an emerging financial sector in Bournemouth with Barclays, London Victoria and IBM down here. JP Morgan has been here for 25 years and employs 4500 people.”
As with any significant global enterprise, JP Morgan has a sizeable investment in India, which helps the bank attract the wealth of technology talent India has to offer.
Cooper says that the JP Morgan operation on the subcontinent is not a way for the bank to benefit from wage arbitrage.
“It’s an emerging economy, and the price difference from the major financial centres will get squeezed, but you must find the right people and the right operating model for the right reasons. A lot of organisations have found themselves cheap headcount in India, but cheap is no more efficient.
“Our Mumbai team are treated no differently to our other technology hubs,” Cooper says of the people leadership ideology he follows. “So we have a very low staff attrition rate and very high output.”
With hubs in the three economically important global regions and a track record that has accumulated interest during the credit crisis while other banks have faltered, it’s interesting to hear from both Cooper and Kimber that one of their most difficult challenges is to secure the right calibre of recruits, especially graduate recruits, for their technology teams.
“We have struggled to articulate that we are a significant technology firm,” Kimber admits. “Seven thousand technology staff globally is bigger than a lot of major technology suppliers.
“In the UK we have the ‘Be the Spark’ graduate recruitment scheme, which puts out the message that we are doing some really interesting stuff with high-performance computing, for example.
“The competition for graduate talent continues to get hotter and hotter every year, and the calibre of graduate that we are seeing is very high,” Kimber says.
Challenged on recent reports that the UK faces losing a generation of unemployed graduates, especially those with computing education, Kimber sees a different picture.
“People like bad news, but the reality is probably somewhere in the middle as we see a lot of high-quality candidates in our recruitment process.
“There is growing recognition that being in technology in our sector is one of the most exciting ways to be involved in banking because they want to be building exciting things. It is a tough environment, but it’s extremely rewarding for what you get access to,” Kimber says.
Asked if the bad reputation the banking sector has garnered from recent failures of banks such as RBS, Kimber admits it added to the challenge.
“It’s probably fair to say that in the past, the banking sector hasn’t told a good story of its use of leading-edge technology and the opportunities for graduates,” says the iCTO.
Cooper agrees. “The big traditional tech firms are often seen as the best option, but in my mind we have a very attractive story,” he explains.
“We have a technology website and a marketing campaign to tell that story rather than the banking story, so we are now getting that message out.
“This is increasingly a technology-centric company, so we have an imperative to find the best technologists we can, and a good percentage of your technology workforce comes in at the entry level. What I see from graduates is a set of super-smart, highly motivated people,” says Cooper.
Like the multi-faceted graduates it is keen to attract, when you take a closer look at JP Morgan the organisation is more than just an investment bank.