How to Make a Move from Banking to Fintech Work
Making the jump from banking to fintech can be trickier than you'd think.
Of the bankers who have left the traditional financial services industry to join an established financial technology firm or a fintech startup, many have trouble making the adjustment, feel like it’s not the best fit for them or simply fail to achieve the success – and enable the lifestyle – that they’d envisioned.
On the other hand, plenty of bankers have made a successful move from banking to fintech, and those success stories are helping to make that career path almost as common as jumping from the sell side to the buy side.
An example of someone who did it right is Kerril Burke, the CEO of Meritsoft, a fintech firm that provides automation software to investment banks, custodians and broker-dealers. He actually didn’t start his career on Wall Street, though, instead becoming a CPA and working at PwC.
After three years at the Big Four professional services firm, Burke made a move to Goldman Sachs, where he worked for seven years in the management controls and fixed income operations departments, eventually climbing the ladder to become an executive director.
Burke then joined LGT, a private banking and asset management firm that is owned by the Princely House of Liechtenstein.
After three years there, Burke joined Credit Suisse, this time in equities, where he worked for three years before leaving the firm to become the CEO of a startup internet bank. Then the dot-com bubble popped and the company went bust.
Burke’s next move was to start Meritsoft, whose software eight out of the top ten investment banks use. The co-founder? His brother Paul, the company’s CTO.
Takeaways for bankers eyeing a switch to fintech
To make the transition from banking to fintech, Burke says you must have an idea for using technology to solve a pain point that financial services firms have – or join a firm built around such a business plan or competitive advantage.
“I worked at Goldman for seven years in operations, and I was tasked with figuring out the reasons for failing transactions and measuring the funding impact,” Burke says. “I wanted to automate the process.
“There are lots of systems pushing out little bits of data that need consolidation in some form, but it never quite reaches the top of the priority list [at a big bank],” he says. “When I was working as a controller at a fund management company, I saw similar inefficiencies costing the firm money.”
Burke noted that differences in tax regimes across the globe are a huge problem for banks’ derivatives desks.
“You have to identify specific elements within a derivative, such as a total-return swap, track them throughout their lifecycle and figure out what amount was from dividends and how much to attribute or assign to each individual,” Burke says.
“We also thought through problems banks and brokerages face with billing, analytics, management of any type of operational and receivable or payable, coupons and commission-sharing arrangements,” he says. “If banks choose to automate some of those functions, it would mean you’d need fewer people and improve the processes, and they make sure they comply with the rules.
“People will do things slightly differently, while computers will do things the same way every time – tax processes are made for that.”
Currently, Meritsoft’s headcount across London, Dublin and New York is 25 people, and Burke wants to hire 12 people in the firm’s next fiscal year, six in business development/sales and six in computer programming/technology.
Meritsoft’s core platform is C++, and it mainly hires developers with experience in C# and a database such as SQL, Oracle or other ODBC-compliant databases.
“We have a development model where our developers work on product development, implementations and support – all of them work on all three things,” Burke says. “We look for people who do programming as a hobby – those people are the best from a coding perspective, not necessarily those with the formal qualifications.
“We hired a brilliant programmer who was working at a coffee shop before he joined us,” he says. “If you lay out the problem in a generic way, it’s best to solve it that way so you’re not building any bespoke code into the platform, and you can use the same tech platform for all clients.
“It depends on if you’re meeting a customer, but developers can come into the office in jeans and a t-shirt – I’m the only one who comes in suited and booted.”
Dan Butcher // 19 February 2018