Working for Shinsei #1

Working for Shinsei #1

Once upon a time there was a very troubled bank called The Long Term Credit Bank of Japan (LTCB) founded in 1952, went bankrupt, was nationalized and in 2000 was sold to an overseas investors consortium led by the enterprising American buy-out firm, Ripplewood, managed by Tim Collins. Collins hired a man named Yashiro, previously Chairman of Citicorp Japan, and things suddenly started from there. Within four years, this bank, now known as Shinsei Bank had disposed of 2.8 trillion yen of bad loans and was profitable again. In February 2004, the bank went public, and Mr. Collins and his backers were justly rewarded for their vision and risk taking.

There is an excellent book about the entire process, called "Saving the Sun" by Gillian Tett, a journalist with the Financial Times. It is significant that the book spends an entire chapter on the IT team at Shinsei, and specifically on one key individual, Dhananjaya "Jay" Dvivedi, the Senior Executive Director of IT for Shinsei and someone that could be alternatively referred to as the "Great Enabler".

Yashiro knew Dvivedi from his Citibank days, where Jay was the CIO, and challenged him with the task of not only improving Shinsei's systems, but to make them a core capability upon which to roll out new services in record time - to the point at which competitors couldn't [compete]. This meant open systems not mainframes, keeping core competence inside the bank rather than in the hands of a single vendor, and creating a platform which could be modified or be built on at short notice.

Thus, Jay set out with a dozen or so loyal managers, and started reconstructing the bank's core operations. Amazingly, in just 18 months, they were able to throw out the mainframe, a black hole which prevented any innovation, and brought in Oracle, standard Intel servers, and Java as an application language. Shinsei was the first bank in Japan to go so far so fast, and a lot of people expected it to fall flat on its face.

But instead, the projects were completed on time, and Shinsei went on to roll out customer services that other banks are only just starting to do now. Services such as online FX trading and bilingual online banking, online mortgage applications, and online security measures. Then of course, there are all the back office applications and technology, which you never get to see, but which have made Shinsei one of the most profitable banks in Japan.

To get to this level of flexibility and functionality, Shinsei has a large dedicated team of IT professionals. Dvivedi realized early on that he had to get his people to think differently, and even before renovations were completed at head office, he had already hired interior designers to create a new atmosphere that would help employees realize the old ways were gone. As a result, when you walk on to a production floor in the main Meguro IT center, it is like walking into a university campus.

Color, curvy desks, and lots of meeting tables catch the eye, and the level of activity is remarkable. Meetings are going on everywhere, discussions are focused and intense, and contribute to the low-level hum of "human electricity". You can tell that people are enjoying both the professional and moral challenge of changing the way banking is done in Japan.

Next week, I will cover some jobs available at Shinsei.