Andrew Parsons, CTO Digital Advisor - Financial Services, Version 1

Andrew Parsons, a seasoned banking professional from Version 1, excels in crafting cloud strategies that drive financial optimisation and operational efficiency. With extensive expertise in software development, IT operations, cybersecurity, data management, and risk management, he diagnoses and resolves intricate challenges within mission-critical systems. Andrew’s collaborative approach fosters continuous innovation, enabling growth across the banking spectrum, from tier-1 institutions to fintechs and startups. His profound industry knowledge and trusted partnership approach have consistently navigated clients through the digital transformation landscape, cementing his reputation as a valued advisor.

Recently, in an exclusive interview with Digital First Magazine, Andrew shared his professional trajectory, insights on the most impactful innovation in the financial services space in the last five years, personal sources of inspiration, future plans, words of wisdom, and much more. The following excerpts are taken from the interview.

What’s your background, Andrew? How did you get started in this industry?

I was a 70’s child, GenX, I see it as a great privilege to have grown up with 3 TV channels and no internet, books and playing outside was my world, there wasn’t anything else to distract me.

I started messing around with tech as a kid in the early 80s. We had a single BBC Micro Computer in our school, and you were allowed to book it for 15 minutes over lunchtime. Over time I got more interested and got a ZX spectrum that really set me on that trajectory of hardware and software. I wrote a small database in the school that catalogued sports kit, it seemed like an obvious use case but weirdly the library wasn’t interested in my idea for a searchable option for books!

My further education was in electrical and mechanical engineering which I really enjoyed for 14 years, but I decided to go back to college around the late 90’s and jump on the dotcom boom. I studied the Microsoft MCSE+I and Cisco CCNA curriculums which were the most relevant at the time. I studied part time, whilst doing ‘work experience’ as a 30-year-old. I worked most weekends and holidays for free to get the experience. The MCSE certifications were around 17 individual MCPs in all, it gave me a really wide foundation that has benefited me over the last +20 years and even today. The fundamentals of tech haven’t really changed that much, maybe being able to super-net using binary is a lost art, maybe akin to map reading with a compass versus using google maps in live.

My first tech job was in IT Support on a very busy trading floor at HSBC in London. It was very fast paced, very long hours and six days a week.  Every-day was a learning  day, the appetite from the business for new tech was enormous and that kept me going. Back then we had to cover everything –  coding, cabling even desk moves – yes manual desk moves because traders would be in a market against their colleagues, so we’d have to move desks out of hours, sometime hundreds overnight. Beyond that I had leadership skills and I started to take on more responsibilities with multiple teams, multiple technologies and programs of work, so that set me on a journey developing myself and others. Ultimately that is where my career has taken me, apart from living and working around the world.

How do you describe Version 1 to people who ask?

Version 1 is a digital transformation business; we partner with global organisations to transform, adopt new technology and drive innovation in a responsible way. We have an end-to-end service capability designed to address the most difficult challenges faced by clients, and we’re supported by the latest cutting-edge technologies. Version 1 is focused on delivering successful client outcomes through the power of world-class teams. Our model for success is called Strength in Balance and is a focus on balanced priorities comprising customer success, empowered people, and strong organisation.  This is what makes us unique, being able to pivot across these three key elements to deliver business value. This is underscored by our values, which are not just empty words but a set of guiding principles that every individual genuinely embraces in their everyday work.

What are some of the technology challenges facing the industry right now?

My background is predominantly financial services, so my perspectives are very much geared towards that sector. I think the key ones are:

Legacy systems and technical debt: Many financial institutions are still reliant on aging systems which are costly to run, difficult to maintain, slow to change, inflexible to current needs, and to a degree, vulnerable to security risks. The DORA act will drive further cloud adoption in FIs in order to deliver the resilience that the regulators expect.

Cloud adoption and migration:  Modernising legacy systems is a significant challenge in a bank. There’s an ongoing shift towards cloud computing in the financial services sector, driven by the need for scalability, cost efficiency, and change agility. Often these are highly complex, multi-year, multi-budget programmes migrating complex financial applications and data to the cloud while ensuring compliance with stringent regulations. Achieving this requires a huge amount of time, effort, resources and collaboration, and none of that means it is quick to deliver.

Cybersecurity and data protection:  We have seen the increasing frequency and sophistication of cyber threats over the last 20 years and because of that, financial institutions are continuously enhancing their cybersecurity controls to protect customer data and financial transactions from both insider and external threat. The threat surface area and threat vectors have grown significantly along with more data and more controls to mitigate risks.

Open banking: Connecting into open banking, third-party services and fintech providers has introduced new challenges in terms of security, data sharing, and seamless integration. This is an area that will support the growth of embedded finance, opening doors to new customers and integrated services. Tech teams need to work across security and risk teams to get this right with low friction and cost.

Artificial intelligence and machine learning: AI is not the future, AI is now. Every financial institution is exploring the use of Generative AI for tasks such as fraud detection, risk management, and personalised customer experiences, whereas machine learning is not new to FIs in terms of applying to large data sets to unearth the information that drives investment. Implementing these new technologies effectively while ensuring transparency, fairness, and compliance with regulations is a challenge, notwithstanding that regulations covering AI are not yet fully established to govern this.

Blockchain and distributed ledger technology: While blockchain and distributed ledger technology (DLT) hold some promise for streamlining financial transactions and improving transparency, it is adoption in the financial services industry has been slower than anticipated due to scalability, interoperability, and regulatory hurdles, I think there is more to exploit here over the next decade.

Digital transformation and customer experience: Meeting the increasing expectations of customers for seamless digital experiences across multiple channels, while also maintaining traditional banking services, is an ongoing challenge for financial institutions. Customers want hyper-customised services with insights that are instantly actionable.

As a leader, what approaches do you use to create a culture of experimentation and innovation within your team?

Aligning innovation with organisational goals is important to ensure that experimentation and innovation efforts are aligned with the organisation’s overall strategy and objectives. I would encourage collaboration across different teams, departments, or even external partners. Diverse perspectives and expertise can spark new ideas and lead to innovative solutions. Understanding the ballpark you’re playing in is also important, along with establishing some guardrails to keep some focus on outcomes that are meaningful. Proof of concept and Proof of value are important options to consider when you create experimentation and innovation. It’s important here to impress that innovation is about business process and business solutions and not new gadgets.

Do you think that CTOs and CIOs officers are developing a new level of authority within the C-suite, and if so, how can they maintain this authority?

Within FS, I’ve seen CIO and CTO representation change over the years. In the traditional banks, I’ve seen a move away from the COO leading the tech conversation, to having CTO/CIO at the top table. FS is a very tech reliant sector and that is increasing year on year. The regulators want to know who the system owners and material risk takers are and may seek to apply SMCR or SMF status on tech leaders, in which case the authority is through that mechanism.

The authority of the CIO/CTO is a critical enabler and driver of innovation, growth, and competitive advantage. They play a pivotal role in leading and executing digital strategies, they are responsible for providing the technological infrastructure and tools that enable data-driven decision-making across the organisation and they manage the risks and response to cyber threat.

Strong communication and collaboration skills with peers and other C-suite executives, business unit leaders, and stakeholders are essential for gaining buy-in, securing resources, and ensuring that technology initiatives are aligned with business needs and demonstrating business acumen.

Speaking specifically of the financial services space, what in your opinion is the most impactful innovation in the last five years?

We work in such a fast-moving sector; five years is huge in technology. Five years ago, we were talking about blockchain and whether cloud computing was safe, today we’re talking about Generative AI and putting powerful tools in the hands of everyone which is going to significantly improve personal productivity.

In terms of innovation in FS, I’d call out open banking and API management because I think innovation is about business process and not gadgets. Open banking will create better outcomes for customers and better choices for consumers.

Open banking, which emerged from regulations like the revised Payment Services Directive (PSD2) in Europe and similar initiatives in other regions, enables third-party providers to access customer data and initiate payments directly from bank accounts with the customer’s consent.

APIs are a key enabler for open banking. By exposing their data and functionality through secure APIs, banks and financial institutions have allowed fintech companies, developers, and other third parties to build applications and services that integrate seamlessly with their systems.

APIs have enabled the development of powerful PFM apps that aggregate a customer’s financial data from multiple sources, providing a comprehensive view of their finances and enabling better budgeting, saving, and investment decisions, whereas open banking APIs have made it possible for customers to securely share their financial data with trusted third parties, enabling services such as account aggregation, credit scoring, and personalised financial advice.

Third-party payment providers can now initiate payments directly from a customer’s bank account, streamlining e-commerce transactions and enabling new payment solutions.

Embedded finance is more pervasive now with APIs that can facilitate the integration of financial services into non-financial platforms and apps, enabling embedded banking, lending, and insurance experiences.

I like that open banking and APIs have disrupted traditional banking models, they have also enabled banks to collaborate with fintechs and leverage their innovative solutions, creating a more diverse and customer-centric financial services ecosystem. We now have Fintech, BankTech, RegTech, PayTech all adding value to the wider eco-system.

What technology are you most excited about right now?

I really want to say quantum because we’ve had decades of binary, working on the premise it can be with a one or zero. Imagine if we could present the ‘one’ and ‘zero’ as an option, but we’re really not there yet in FS, so I’d say AI from the perspective of it’s going to change the way we operate. I don’t see creating PowerPoints and text to speech video as a great breakthrough, I want more from AI than short cuts – it has to have a meaningful impact and make a difference.

I’d like to see more done to support disability as the use cases are a perfect fit for AI to be able to make a difference. I sit on the board of a disability charity called DEMAND, (  we’re focused more on the design side, but I think there’s more to do in this space to assist with making and adapting products and features.

For example, AI can optimise workplace accommodations and assistive technologies, enabling greater participation and productivity for employees with disabilities. It can assist in the early detection and diagnosis of disabilities by analysing medical data and identifying patterns and can design AI-powered prosthetics and exoskeletons that can adapt to individual movements and provide enhanced mobility and control. AI can support rehabilitation by tracking progress, providing feedback, and customising exercise routines for individuals with physical or cognitive disabilities.

What, personally, has allowed you the success you have had in the role of a leader in technology?

Success is earned, it’s not free or handed out. I’ve had great support around me and many of my managers and leaders over the years have seen potential in me that I may not have seen myself. I’m no different to many people that have had some success, I have anxieties, I am sometimes a reluctant leader. I’ve had imposter syndrome but I’m confident in my abilities and willing to try.

I love learning, I call it intellectual philanthropy, the constant quest to understand something. I suspect that comes from an engineering background, taking things apart and having an opinion on what’s  in front of me and how I can make it better. FS is a similar arena in that you’re always looking at what’s in-front of you and trying to manage the current or emerging risk as opposed to looking backwards to inform what you do.

Where or whom do you seek motivation and inspiration from? How?

Motivation is an interesting noun used in leadership conversations, I see motivation as something that can go up or down depending on circumstances. I prefer discipline, being disciplined helps me focus and not lose sight of what is important.

I draw inspiration from a sense of success, moving forward, creating memories, dealing with adversity. I’ve been on the front row of some the world’s most important events; I’ve seen what the worst of mankind can do and what the best of mankind can do and that has shaped my perspective.

I’m inspired by my children’s ability to confidently progress through their college life in the knowledge that I’ve given them both more than I had and they’re doing a far better job at learning than I did. I’ve seen the world and travelled to the remotest parts, content that I’ve seen it at its best.

Where do you see yourself in the next 5 years?

I want to be doing exactly what I’m doing now, using my experience and perspectives to support Version 1 and its clients, albeit, I have one eye on more travel and creating memories with my family. In the meantime, I’ve joined a great business that is really moving in the right direction and it’s great to be part of the success story of our company and clients too.

What piece of advice would you give to aspiring CTOs?

Get into a mindset of thinking strategically beyond just technology. Don’t be afraid to ask for help and remember the people around you are more important to your success than you think. There’s a great African proverb which resonates with me – go fast go alone, go far go together.

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