Ruth Porat’s highly publicised move from Morgan Stanley to tech giant Google highlights the increased freedom of movement between the financial services and tech sectors. Whereas previously, the two shared few similarities in terms of job roles, the increasing amount of money in Silicon Valley has led to tech companies setting up investment strategies. Bankers’ financial skills are therefore now in high demand amongst tech firms. Anthony Noto’s move from Goldman Sachs to Twitter last year is another recent example of this. It is likely that this trend will be replicated in the UK as the tech scene here grows. The rise of fintech will no doubt provide an attractive proposition to some of our bankers and CFOs.

Although the buzz around Ruth’s move has focused on how Wall Street should be concerned that it is losing chunks of its key talent to Silicon Valley, some of this is overblown. These moves have far more to do with individual needs and skill sets rather than a wider brain-drain. Broadly speaking, there are two types of CFO working in banks:

Google CFO Ruth Porat ©Associated Press
  1. bankers who have risen up through the ranks and moved across to a CFO seat, and
  2. highly trained accountants who may have previously worked at large professional services firms.

Many of this first group of current bank CFOs rose up as bankers in the dotcom boom – they witnessed the dawn and explosion of the internet and as such have a grounded background in technology. Porat is a great example of this – in her early career, she cut her teeth with companies such as eBay and Amazon from inception and fostered an exceptional track record of identifying high growth companies at early stages. Her strong personal connections to California notwithstanding, having grown up and attended school there, her desire to return to the global mecca of tech is unsurprising. The movement of these financial professionals to tech focused firms can be more of a natural career progression than anything else.

For many bankers that have been in the sector since before the crisis, the reduction in the amount of investment activity from banks has had the most dramatic impact on their role – they have gone from an investment powerhouse with (nearly) endless financial resources to a penny pinching business in the space of a decade. By comparison, wealthy technology firms have almost taken the banks’ traditional role through their investment and acquisition efforts. Many tech firms are struggling to cope with their massive financial resources so they are a much more attractive proposition for financial executives with a tech background to return to their roots and offer real value.

In comparison, the training and background of accountant-bankers leaves them far more regulatory and process-focused. Whereas the first group might look elsewhere, executives with accounting backgrounds are much more likely to stay put within financial services. This is especially true given how much regulatory attention has increased since the financial crisis.

When high-flying bankers make the move to tech, the question of what this means for the finance sector inevitably emerges. Ruth was, without doubt, the most powerful woman on Wall Street and so her move will inevitably create an example that may be followed by others in her network. Her appointment also highlights the importance the technology sector is now placing on female leadership. Ruth is joining a prominent club of female leaders including Sheryl Sandberg, COO of Facebook and Melissa Mayer, CEO at Yahoo. The technology sector efforts around diversity are starting to put the finance sector to shame. With just a handful of powerful women left on Wall Street, banks must address their diversity issue if they do not want other women to follow suit. Technology is arguably the hottest sector in terms of job prospects at the moment in both the US and the UK. In America, where the sector is more established, the pull is currently stronger but this cannot make UK firms complacent. As the UK grows as a successful tech hub, the financial services industry will run the risk of losing some of its banking talent to these rising companies. Technology is clearly a sector in which money can be made, dreams can be realised and – more so recently – where exceptional women can excel. It isn’t for everyone, however, and for many financial services employees the structure and regimented approach of a bank will remain the perfect fit for their skillset.

Martha Harvey-Jones, a director at executive search firm, Leathwaite, recruits CFOs and leaders of financial & product control, tax, treasury & audit. She works across London and New York supporting Leathwaite’s full spectrum of financial services clients.

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