When most big banks seek out vendors to help them rejuvenate their tech infrastructure, they set up calls and get meetings on the calendar. But Morgan Stanley, in a sign of the growing importance of partnering with the right tech firms, jets off a fleet of its key decision-makers to Silicon Valley.
The New York-based bank has boots on the ground this week to meet with more than 150 technology providers as part of its annual CTO Innovation Summit in Palo Alto, California.
The event solves a common pain point that both tech entrepreneurs and large firms face: They can’t find each other.
“I have been in the shoes of the entrepreneur,” Shawn Melamed, Morgan Stanley’s head of technology business development and the firm’s innovation office, told Business Insider in an interview. “You can waste years trying to sell to the people who are not the right buyer.”
“Every important decision-maker is flown out there, division by division,” he added. “When you present to our company, you know the right people are in front of you.”
Big technology execs at Morgan Stanley attending the conference include the bank’s head of technology, Rob Rooney; head of wealth-management technology, Sal Cucchiara; head of institutional securities technology and international, Steve Mavin; head of enterprise technology and risk, Michael Poser; and head of corporate and funding technology, Bobby Gilja.
The event highlights the firm’s focus on collaborative innovation, Melamed said. It connects executives who span the bank’s business lines with startups working on projects that could improve life for Morgan Stanley employees or clients, translate into a new business, or reduce costs. The startups are nominated by venture-capital investors and include tech-focused areas like machine learning, artificial intelligence, data and analytics, and cybersecurity.
Companies at the summit include the machine-learning firms Optimizing Mind and Wave Computing, the big-data company SQream, and the messaging-technology company Smooch.
After Morgan Stanley meets with a startup, it decides whether it wants to spend more time with the company based on the maturity of its product offerings, team, and other factors.
To be sure, not all the firms are in financial services. Qualtrics, which provides technology services relating to surveys, is used by Morgan Stanley’s wealth division. The bank first met the firm through its summit.
“We went through a journey with them,” Melamed said. “At first, there was very small deployment and then it exploded to all of our wealth-management clients. And now all of our employees.”
Delphix, a data firm, and Illumio, a cloud-security company, are also being recognized at this year’s summit.
Wall Street banks have long realized they can’t go it alone and need to rely on outside firms to power them. In fact, banks have begun to rely even more heavily on third-party vendors, according to a recent report by Broadridge, the financial-technology provider.
“Given the imperative to cut costs and the opportunities offered by new technologies, many institutions are now actively seeking to embrace partners,” the report said. “They are leveraging partnerships to add innovation in areas where they lack expertise or scale, or to enable them to focus the expertise they do have on their most differentiating areas.”
Morgan Stanley’s CTO Summit, which the bank has run for 18 years, has planted the seeds for big projects.
Cloudera, which the bank honored in 2017, played a critical role in the development of a platform used within the bank’s wealth-management division. Today, data from the platform is used to send personalized emails to clients when the markets go berserk.
Morgan Stanley has been putting a greater focus on technology. Rob Rooney, who previously oversaw the bank’s operations in Europe, the Middle East, and Africa, as well as its efforts in tech, was transitioned to New York to oversee technology exclusively.
The bank is also investing heavily in digital within its wealth-management business. It launched a robo adviser in late 2017, primarily geared at children of its existing clients.