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Friday, November 23, 2018

Interview: Barclaycard CIO on Open Banking APIs and blockchain non-adoption

A new Barclaycard survey of 100 UK chief information officers (CIOs) goes some way to clarifying how the role is changing in the face of fast technological progress.

Among the findings, 42% of companies are scaling up their R&D spending to leverage emerging technologies, and 77% are executing new approaches to implementing technologies.

In terms of payments, 73% believe payment technology has become an increasingly prominent part of boardroom discussions, while 70% would like better access to payments data in order to improve decision making.

Here, Barclaycard CIO Keith Little outlines the findings of the survey and whether the results resonated with the organisation’s own Open Banking and IT architecture strategy.

What pressing concerns does the survey highlight?

It should come as no surprise that the report highlighted the increased concern around fraud, cyber and payment system resilience.

But I was quite surprised by how highly the talent agenda ranked as CIOs experience the breadth of the skills they need to develop within their teams to keep up with the pace of technological change.

For me, it’s less about lack of talent and more about how to develop existing talent. I’m new to banking, my background is in media, telco, engineering, gambling and advertising; I guess you could call me a full stack CIO for the breadth of experience.

However, all of those industries have a common set of technological themes. It gives you an appreciation for how other industries approach the way developers and engineers are organised in teams.

That’s something I’m bringing to Barclaycard - trying to broaden the core craft skills of developers who’ve been working to silos or very specific jobs. It makes them more mobile and ultimately helps with retention and career paths; that goes right up to my management teams as well.

While reskilling benefits the developers it also makes Barclaycard naturally more fleet of foot. I’ve seen this change a lot in the 30 odd years I’ve been developing. I’m also a keen advocate for finding the right skills in people. The core craft skills required of mainframe engineering in the ‘70s and ‘80s are analogous to the skills needed for cloud computing today, for instance; so it’s not all about the latest and greatest startup engineers.

You’ve had several roles in startups. What aspects of a startup mentality can be brought to Barclaycard?

I’ve had the corporate experience at BT and the BBC as well as a number of startups so I understand the legacy issue quite starkly; it prepared me for the legacy IT of Barclaycard.

However, with the maturing of open source technology and access to almost unlimited computer power via the cloud and the deep learning of AI on huge volumes of data, we’re not so reliant on our legacy technology and it’s enabled us to be more agile.

I’m beginning to see a concerted effort at Barclaycard and across the wider bank to move away from legacy infrastructure and really begin to build some state-of-the-art and frankly some sexy applications that you’d expect to come from startups. Those applications are focused around providing cloud powered, event driven and real-time datasets on a scale and volume that bank deals with and something the fintechs haven’t quite achieved yet.

While it is absolutely possible for Barclaycard to build the same exciting propositions, legacy is legacy, and we can’t shy away from that.

We look to compensate by structuring our teams to modern architectural frameworks which allows us to operate more horizontally rather than get stuck in the vertical world of silos.

Likewise, my role in startups gives me a broad focus for the business side of things. You get involved in all aspects of running the business, including the choice of carpet colour. I’d say that coming from startups in different industries gives me a fresh perspective on what IT changes are required within banking.

Is it fair to say that tier one banks are less keen on publicising Open Banking?

When I was deliberating the next step of my career after working at startups, I spoke to a few banks but I was surprised by the underlying strategy of what Barclaycard and the wider bank were trying to do, in terms of their attitude towards fintechs and disruptions like Open Banking or PSD2.

I was probably going to naturally revert back to startups but I was impressed with Barclaycard’s strategy to embrace change, and that came across far more strongly than at other banks.

In terms of Open Banking, Barclays has just launched an Open Banking functionality within the mobile banking app which aggregates external bank accounts onto the same screen. The Rise programme is also another great example of the bank’s approach to innovation. We’re actively incubating the ideas and working with the people who would otherwise disrupt us. That sort of partnership gives the bank very refreshing feedback.

This is what the survey is about, feedback. When I speak to some of my retail CIO customers, their number one priority is payment system resilience and that’s where my background at BT and BBC of running critical national infrastructure is invaluable.

Talk us through your API strategy.

When you talk about an API strategy it’s not necessarily about internal architecture but also how you want to engage with customers through interfacing and integrating APIs. That means, as a company, we want to build the frictionless onboarding experience.

APIs have always been part of our tech strategy but more and more it’s part of our commercial strategy, everything from how to sell APIs to enabling platforms. That means looking at our future partnering strategy which increasingly involves large tech firms that will help integrate our merchant customers.

In terms of the partners we look for, there are classic big tech firms who act as integrators but also small, niche companies who create payment technologies for many merchants and SMEs. We can improve customer experience by better understanding the interconnectivity of our APIs.

The Rise programme pays close attention to blockchain. Are we actually any closer to using blockchain past the pilot stage?

The survey highlighted that 35% of CIOs had “piloted” a blockchain solution, and I use the word pilot in inverted commas because there’s 43% who have no plans to actually put it into production.

Where Barclaycard sits on blockchain, through the Rise programme and fintech partnerships we’re talking to people and trying to work out which ideas match problems that Barclaycard has; we’re still looking for that killer use case.

There are still some basic logistical issues that need to be overcome, such as the chargeback process, before blockchain can be spoken about in the payments space.



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