How Banking & the Film Industry Face Similar Resilience Challenges

On November 6th, Cutover resilience expert Mark Heywood spoke at the BCI World conference in London. Formerly the Head of Operational Resilience for UBS, Mark has over 20 years of experience in senior risk and resilience roles and has worked across Financial Services, government departments, city and county councils and the charity sector. He left the banking industry to become a screenwriter in 2016.

 

Mark Heywood:

I left the banking industry three and a half years ago to pursue a career in screenwriting, but I’ve been pleasantly surprised by how much my resilience background has been of benefit in the entertainment industry. In fact, there are more parallels between banking and entertainment than you might think

For decades the entertainment industry has faced regulation and new entrants. In other words, challengers. But the first form of regulation in the industry was self-regulation.

In the 1920s Hollywood had been rocked by a series of scandals which threatened to turn audiences off the industry. So, the major studios appointed a Presbyterian leader, William Hays, to develop a code of conduct for films. He produced the Hays Code which was a list of “Dont’s” and “Be Carefuls” that all films had to adhere to. For example, you couldn’t show two people kissing for more than three seconds - which is why so many old films have scenes where the characters break off from kissing to say something, only to return to the kiss and repeat the sequence.

This worked for a while, but when a new challenger entered the industry the code was a problem. The code didn’t apply to TV.

The code, launched in 1930, was largely defunct by the late sixties after a series of breakthrough films - including Psycho, and Some Like it Hot - made the code unworkable.

Ever since the industry has faced challengers and regulation - for example, the BFI has new funding rules which stipulate 50% of film funding in the UK is for female-led projects. A further 20-30% for BAME projects.

There is a reason why cinemas are full of superhero films. It’s to give audiences a big-screen experience they can’t get at home. Cinema has constantly had to adapt to new challengers such as Betamax, VHS, DVD, Blu-Ray, cable, streaming, flat-screen, wide-screen, HD etc.

We’re now in the penultimate month of the decade. In two months, we’ll be into the twenties.  Now, in my new industry, the last time this happened the amount of creativity was extraordinary - Hitchcock made his first feature film, literature was awash with Hemingway, T. S. Elliot, F. Scott Fitzgerald, James Joyce, Daphne Du Maurier...the list goes on. I think it is interesting to note that all these people still feel relevant today.

But what about the next time the twenties come around?

Might people find it odd to think that once upon a time people left their homes to go and sit in a large room and eat noisy food from paper bags amongst complete strangers? To be honest, that feels weird today, but the next time around it might seem incredible. If it still does exist, it will most likely by very niche and high end. I wonder if Secret Cinema has the right idea.

All of this got me thinking about banking. My first job was with RBS in the late ‘90s - last century, last millennium.  

Banking existed in the 1920s. It was almost ruined by the Great Depression, but it existed. However, it existed in a manner that we don’t recognise today. What will it look like the next time the twenties come around? Right now, in the UK, there are more people over the age of 65 than under 18. Pretty much half of the domestic wealth in the UK is currently in the hands of the former. At some point, that wealth will be in the hands of people who were born this millennium. Their birth year begins with a two.

This is an entire generation born into an always-on world. Will banking as we know it today remain relevant to this new generation?

How is banking dealing with this problem? And what questions are regulators asking?

Well, let’s go back a few years. Until the credit crunch I never once participated in a run-on-the-bank scenario. Now stress-testing is here to stay.

If I think about the journey regulation has been on I think about the “Dear Chairman” exercises, Recovery and Resolution Planning, and now, just last month I think about the Treasury Committee report into IT Failures in the Financial Services Sector.

And I think about the challenge that industries like banking and entertainment have in common. Traditional incumbents facing challengers who are buying market share and not having to deal with legacy infrastructure that cannot deliver to an always-on consumer.

It really is “adapt or die.”

Marcus Wildsmith is the Chief Product Officer of Cutover. Now, Marcus, I wanted to ask you about what your clients are saying about this challenge. The Treasury Committee report is realistic about the fact that “zero outage” is not realistic. But it does want disruption to be reduced. However, is it fair to say that moving to an “always-on” world is a lengthy process? Surely there are major parts of banking infrastructure that simply weren’t built for an always-on world?

 

Marcus Wildsmith:

Many banks are in some form of transition whether it be moving to a new infrastructure, managing a data center migration or integrating systems due to a merger. They are constantly managing change across a complex and evolving ecosystem. The risks are huge if failure occurs, so banks need to have strong processes in place to manage these changes. Focusing on the process of the change itself is what will ultimately help organizations through these transition periods.  

Companies like Instagram can move fast because they have a new environment and infrastructure, but it becomes much more difficult for traditional banks who have been operating for decades and have legacy infrastructure in place. 

As part of the transition to a cloud-native environment, it’s critical to maintain strong operational resilience.  

You need visibility into all the tech you have now as well as an eye into the future. You should expect failure and be prepared to cope with it. You should expect it to go wrong and practice what that might look like.

 

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