Saul Van Beurden is the Head of Technology for Wells Fargo, a role he has had for nearly two years, after having spent time as the Chief Information Officer of Consumer and Community Banking at JPMorgan Chase. He commands a budget of roughly $9 billion and has a team of 40,000 technologists reporting to him. His purview includes all software developments, IT operations, infrastructure and cloud enablement and cybersecurity. His is a role of tremendous consequence in the bank to say the least.
The top technologists at major companies are most often referred to as chief information officers. They are sometimes referred to as chief technology officers or as chief digital officers. The “head of technology” title is an unusual one. When asked how the company and he arrived at it, he noted that the reason was that when he joined, there was already a chief information officer and a chief technology officer, both of whom would report to him. “For me, it’s not important the title of a role,” noted Van Beurden. “It’s how you act on that role and the responsibility that you have [that is more important].”
Upon joining the company, Van Beurden elected to develop a plan to play both “offense and defense,” as he put it, comparing it to coaching an American football team. “The first role is what you could call the defensive role and is the first operator role,” he said. “This is all about making sure that the plan runs, that the things go. The second role is an offensive role. This is what we call the business enabler role, where it’s more about how do you decrease risk for the bank? How do you maximize revenue? How do you get better return on investments?”
To bring this to life, early in his tenure, Van Beurden and his team defined what he refers to as a “6S Strategy.” They are:
Relative to skills, he highlights that it is critical to build a team that has the skills of today and grows the skills of tomorrow, suggesting a level of learning agility necessary to accomplish the company’s mission. This is the path to being a “trusted operator,” as he put it. “This is all about upscaling and reskilling your workforce,” he said.
Needless to say, security is an important skillset for any enterprise, but especially so for a major financial services company that has so much sensitive data flowing through it. “You could say the only thing that a bank sells is trust: the fact that it’s safe to have your [money and data] with the bank,” said Van Beurden. “Security comes down to cybersecurity, to controls that you need to have in place, and so forth.”
With 90% of all transactions taking place digitally across Wells Fargo, stability is sine qua non. “When the digital app or the online desktop version is down, the bank is down,” Van Beurden underscored. “You need to have a stable shop. That stability is created by more and better resiliency. It’s all about automating the processes on the IT operation side, and with rationalization of your applications.” He noted that these first three “S”s make up the defensive play.
The offensive play begins with scalability. Van Beurden highlighted that this requires on-demand service, so that as transaction volumes increase, the technology seamlessly scales up and then can scale back as necessary.
Next is the focus on speed. As a long-time financial services executive, Van Beurden noted that banks are slow, with the behemoths like Wells Fargo often taking more than a year to deliver programs. He has driven his team to halve or even to cut the time to a third of that. He painted the picture of the typical way of doing things, and then offered the improvement. He highlighted the typical process with many handoffs along the way. “First product requirements, and then the prioritization with finance teams, and then it goes to a PMO, and then it gets to a project leader, and then IT intake, and IT intake to design, to technical design, to developers, to test, to production,” Van Beurden said. “You already near 60 weeks’ worth of work right there.” The improvement comes through multifunctional teams that do not require inefficient handoffs. “The analyst with the product idea sits down with the engineer who is supposed to build a feature, who is also the one who can directly put it in production because he or she is using DevOps tools like we have today. You take away that whole notion of handoff, handoff, handoff.” Next, he noted that process automation is critical. He highlighted that speed is the key differentiator to maximize revenues and to gain advantage over the rest of the market through better return on investment.
The final “S” is satisfaction. “You can do all the other things, but if the end customer is still not happy with and app [for example], and the uptime of the app [are not appropriate], we have failed,” Van Beurden said. “Satisfaction is, for us, the cornerstone of the strategy.”
Van Beuren hoped to simplify things from a strategy perspective to validate progress relative to each of the six “S” categories. By maturing and driving value in each area, the goal is to deliver better capabilities for innovation. The technology team has re-infused the company with the art of the possible. That innovation is based is also structured, in this case into three pillars.
The first pillar is an innovation unit that reports to a peer of Van Beurden’s, Ather Williams III, who is the Senior Executive Vice President, Head of Corporate Strategy, Digital Platforms and Innovation at Wells Fargo. “[Williams’] team constantly looks for what is the next best experience for our customer,” said Van Beurden. “What is the next best feature that we need to develop? They also look a little bit further ahead, like three years, four years into the future, and start to see what is coming and looking around the corner and making sure it is getting adopted.” That team works in an integrated fashion with software engineers on Van Beurden’s team, ensuring there is alignment and a strong collaboration between the teams.
The second pillar is research and development on the technology side. This team is often tasked with the most deeply technical or complicated innovation topics. The team has assembled an ecosystem to stimulate the thinking necessary to tackle big topics, partnering with institutions such as MIT and Stanford. Van Beurden indicated that the R&D team focuses on what he calls “the magical cocktail of artificial intelligence and machine learning, data and compute.” He believes that the future of the bank will be defined at the intersection of these technology disciplines.
Van Beurden offered examples of how Wells Fargo is leveraging each. “We need to explain the outcomes of AI models. If we get a lending request of a customer, and we say yes or no, we need to be able to say why we said yes or why we said no. We cannot say, ‘There was the model and it ran it and we do not know [why the decision was made].’ We need to be able to explain it.” The team has been able to monitor and explain the outcomes of the models while fine tuning them where necessary. With MIT, they have developed a mechanism for AI to explain AI. “This is how we solve the problem of non-explainable AI by putting AI on top of it by which it becomes explainable,” said Van Beurden.
Though many companies think of big data as an operating principle, Van Beurden thinks about small data. “Small data is really finding that smallest significant set of data that will bring you to [the right] outcome, [which may leverage] synthetic data, instead of all the production data that we use for this,” explained Van Beurden. “Can we do synthetic data to come to the same outcome?” In concert with the research institutes, his team is hard at work on this.
The final pillar is related to compute; more specifically, the fast advancements Van Beurden’s team is making on compute power. “That speed that is coming with quantum compute cannot [be expressed] in factors like 10, or hundreds or millions,” he noted. “It’s [beyond] what we think is possible to be done. It doesn’t matter when it’s ready. We do not want to be the one that has regrets that we didn’t do it from the start, and that we weren’t there if it becomes successful and production ready.” There are two areas of focus as his team drives this journey: trading algorithms and cryptographic keys. The former will aid the bank in fostering faster trading. The latter will protect the bank from the time when all possible passwords can be determined at lightning speed by bad actors due to dramatic advances in compute speed.
Though Wells Fargo has taken its lumps in recent years, Van Beurden and his team have positioned the company to gain advantages once again as an innovator.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, will be released in March 2021. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.