This month Finance Monthly had the privilege of speaking to Steve Shyn –Chief Strategy Officer and Managing Partner of Linium – a globally recognized business management consultancy based in Manhattan, New York. Steve has a wide array of financial services industry experience, bringing senior level leadership, management and a pragmatic approach to find innovative solutions to help clients navigate through change. Steve’s career has been focused on Risk Management and Data Management – perfect for today’s most complex issues challenging banks such as CCAR and BCBS 239. He brings the experience, track record, execution capability and hands on leadership critical to all these complex projects. Here, Steve tells us all about his experience prior to joining Linium, his current role, the company’s recent expansion into London and his views on 2017.
Given your 20+ years in the financial services industry, how has the market evolved over time?
Over the past 20+ years, the financial services industry has travelled through some exciting times and has also made some bad decisions. We went through the dot-com bubble burst and through the move that created the 2008 financial crisis and today, it seems like the global financial markets are nervous again.
In my career, I’ve always followed where the industry was headed and I have always done the things that were in vogue. I was very fond of the risk of the industry when I started off my career. In the 2000s, I was lucky enough to be involved in the integration between Chicago-based Bank One and JP Morgan Chase, which became one of the most pivotal and influential experiences in my career. When JP Morgan acquired Bank One, they managed to get one of the best CEOs in the market and all of the decisions that they’ve made following the integration have played in their favour, given that they are currently the market leader. During that experience of assisting with the integration between the two banks, I saw how a cohesive culture and an operationally strong firm can absorb a much larger firm quickly and effectively. The speed in decision making during the integration was absolutely astonishing -I believe that this transaction should be a playbook by which all integrations should happen. At Linium, we have used it is an example to follow numerous times and has always worked out well.
Just as regulations started to get published in the Federal Register faster, the 2008 financial crisis happened – triggering a regulation explosion. The regulatory change that we were going through, had created an inflexion point in the global financial markets where the real struggle seemed to be between the good intentions of the regulators to create controls and transparency in the markets and the ambiguous ways that the global regulators wanted clients to be compliant. It looked like some of the regulators were pushing out 3-4 major pieces of regulation pre-2008, while post 2008 they were writing 50+ pieces of regulation a year, which was an amazing thing to witness. It all later on resulted in a lot of spending on controls – increasing the cost of the banks. It really reduced innovation in the markets because it really tightened margins and revenues. There were a lot of downstream effects on the industry that continue into the present.
Today, I think a major problem in the industry is related to the current brain drain. If you ask the Ivy League schools and all the other big schools across the US where all the recent graduates have been going by industry, you will find that they haven’t been interested in operating within the financial services industry. These people are aiming at operating within more exciting industries– they’re going to the Silicon Valley, they’re going into technology and outside of financial services. So what has this done for us? This has created more opportunities for specialized consultancies such as Linium to come in and provide intellectual continuity and execution expertise to help bridge this gap of knowledge and innovation since the brain drain resulted in innovation going down. Innovation is a hot topic and something that can’t happen in banks anymore but the banks and the innovative firms all need each other. One innovates, the other has distribution to scale ideas.
How did your career path lead you to your current position?
Projects. I love projects, I love working with clients and I love solving problems – it’s something that has been in my DNA since I was a young kid. I’ve always been fond of working on different projects and solving problems and what I’ve never liked is to do the same thing twice. Consulting in the financial services was right up my alley. I have a Master’s degree in Applied Economics from the University of Michigan. My degree revolved mostly around Mathematics and Statistics, but it also offered me the opportunity to have discourse with people who came from the finance and economic world. I would say that my time in university was very intellectually challenging.
My career to date has been going back and forth between the greatest firms in the world and has introduced to a wide array of practices, people and circumstances – something that I am very thankful for.
What are the core consulting services that Linium provides to financial institutions?
Linium has a core idea of innovation-led consulting services. We’re all seeing an active dialogue with senior leadership on the cool novel ideas surrounding robotics, artificial intelligence, and cloud technology, the Internet of Things and the value of data management and its role for intelligence (which is near and dear to my heart). Data management is a concept that is widely accepted in the fintech world and is now starting to get more and more accepted in the banking sector too. At Linium, we take the core foundational understanding of how banks and financial services firms work and we introduce new ideas to solve old problems. We consult on solutions that we are famous (or can be famous) and we connect this where the market has the most need.We are arguably the best firm in the world around Service Management and Loan Servicing Process, Operating Model and Technology. We also believe in having a strong network of regulatory change experts whose sole job is to understand the financial services industry inside out.
I believe that the combination of these ideas, practices and services allows Linium to deliver the solutions our clients need to solve their most-pressing operational challenges. At the end of the day, we are execution focused and results-driven.
Linium recently opened an office in London. Could you tell us a bit about the expansion?
Opening an office in London is a move that we are all very excited about! Our clients require us to be global and have the capabilities to execute cross-border change. More importantly, this expansion enables us to build a cohesive and experienced team to solve specific issues.
We felt that it was a next logical step for us to get into London. We engaged several clients in our quickly growing capabilities there and in the rest of Europe. These partnerships with people that we’ve linked to are world-class and fit perfectly with this innovation-focused practices that our clients demand. I personally have worked for three British firms and would definitely say that London has fantastic culture and opportunities. I am especially excited to be able to work with some old friends and partners in our London office. We are eager to be able to bring the best ideas from Europe to all of our clients around the world and creating a two-way street of ideas to connect the world dots to complete the picture.
What would you say differentiates Linium from its competitors?
This is a common question for consultancies and I believe that every firm would say that it has the best people, the best practices, and so on. One of the main things that we focus on is the fact that people really are crucially important to our company – this of part of our external facing methodology. People and culture are where we believe that real change must occur before you being changing processes and platforms. People need to be taken along the journey and culture for us involves the services that companies put in place to contribute to their people’s success.
I believe that what differentiates Linium from our competitors and another interesting question to ask is ‘Why we do things?’ We believe in taking ideas and making them better. We’ve done this with many ideas in technology platforms (like Misys Loan IQ and ServiceNow) and we’ll continue to push our teams to make everything that they do work better. We believe that consulting can be executed with integrity. We believe financial institutions need to get back to their core mission and away from the distractions of the last decade of the regulatory distractions. We also recognize that old-school consulting is dying and that the world is asking for on-demand teams and are being very specific about exactly what they need. We continue to make sure that we’re delivering true value to our clients.
What are the biggest challenges facing financial institutions?
One word: Relevance. The world is going through this fantastic revolution – ideas are being exchanges, financial flows are moving faster, information is available at a pace that has never been seen before and this all continues to accelerate. Enlightened firms will have already recognized this and will continue to invest in understanding the customers, the markets, and bringing the right prices or service to their customers, in the manner that’s required and at a price point that’s competitive. So without recognizing and promoting change as a core competency, financial institutions will be out hustled by the smaller firms entering the market or by more agile companies thus becoming irrelevant to the future and to their customers. A good example for this is peer-to-peer lending which challenges our traditional views on financial intermediation and bricks and mortar. To me, the biggest challenge for financial services is keeping up with the changes, the pace and remaining relevant.
What do you see as the biggest game changers for financial institutions in 2017?
Customer behavior is demanding more of what we like to call the ‘Amazon Prime’ experience. The world’s gotten used to on-demand everything so continuing to push banks and those that service them, into a better interaction that will undoubtedly improve their customer experience.
Nowadays there’s constant technology change – robotics will continue to automate jobs, data will continue to rise in importance, mainstream usage of mobile technology will change how people engage with banks. Cyber security has become a major issue recently since the sophistication of cybercriminals is increasing and the attacks are becoming bolder.
Another change that we are specifically involved with is the standardization of the large corporate lending market. Some key technology changes that are happening are expected to create a new revenue stream – money that has never been here before and banks are positioned very well to reap these rewards, which has been elusive for the market in the past 10 years.
With Linium’s expansion, what do you anticipate for Linium in the near future?
We anticipate that we’ll be able to speed up our adoption of new trends in technology and processes that will benefit our clients as our network grows. We hope that we’ll continue to be recognized in the market and to be approached for partnerships. One of our core beliefs is that we must be operationally strong, so our ability to manage, scale and maintain our high level of client service and excellence is our primary focus. We are prepared to make long term investments to achieve the stability that will make us remain relevant in the future.
As Chief Strategy Officer, what motivates you most about your role?
Seeing the services that Linium provides our clients and the positive impact that we have on their businesses and the communities we operate in motivates me to do more and make sure that our firm represents the highest ideals and values. Many years ago when we were a small firm, we built that foundation and we continue to believe in it as we grow. I have worked for some very large firms where the values and cultures were already set and it was difficult for employees to engage. Linium has beautiful values and culture that I believe is a very strong foundation for us.
Another motivation, as strange as it may sound, is change. I love change – status quo for me is not comfortable. We are lucky that we’re growing and constantly evolving. As a Chief Strategy Officer, I not only get to participate in the change, but I can also trigger the change by looking at opportunities to organically and inorganically grow our company. My job is figuring out the best execution and driving our growth, which gets me excited. I can’t emphasize enough that the people aspect of our business is one of my most favourite things to work with and experience. Meeting great people and learning from them is so exhilarating – mentoring, coaching people and seeing them succeed is one of the hardest and most rewarding things that I am involved with at the company.