Longtime former Goldman Sachs executive Elisha Wiesel is no stranger to technological problems. Over the course of a 25-year career at the firm, he went from being part of a 20-person team managing the bank's risk analytics software, known as SecDB or Securities Database, to chief information officer of Goldman.
What he saw there mirrored a broader trend in the industry: While it might be true that tech giants are more and more looking like banks, it's also true that banks are increasingly tech companies.
"In the span of 25 years, I saw something really interesting occur, which is technology ultimately became a part, every single part, of the firm's operations," Wiesel told Business Insider.
Wiesel, who departed Goldman in 2019, is now bringing that experience to banking software startup The Floor, founded in 2016 and headquartered in Tel Aviv, which he joined in November as chairman.
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The Floor's software-as-a-service offering aims to identify tech redundancies and manage banks' internal and third-party applications, reducing bank's costs in the process. It's a mission driven by the vast quantity of technology banks now use every day — from the software run by brokers on a trading floor to the code driving collateral and settlement.
Wiesel joins The Floor after 25 years at Goldman Sachs
Just as the earlier technological transformation of banks was driven by crisis, Wiesel said, the Covid-19 pandemic has forced investment and retail banks alike to refocus their approach on digital products.
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"I remember when I first started, the only thing that really mattered was the trade you were doing that day, the market risk you were managing, how did you hedge it?" Wiesel said. But banking system shocks — from the blow-up of Long Term Capital Management in the late 1990s to the 2008 financial crisis — have since shone a spotlight on the inner workings of financial firms and the tools they use to manage credit and liquidity risk.
"With COVID going on as a catalyst, the requests are coming in faster than ever, and banks are approaching us from multiple geographies," Wiesel continued.
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Read more: Here's a breakdown of how much US banks are spending on technology
What might have once seemed like technological problems tangential to a bank's core operations have since become a key to their business, especially as bank spending on tech has only grown in recent years. In 2019, for example, Business Insider reported that JPMorgan Chase spent more than $11 billion on tech, while Bank of America spent more than $10 billion.
"All of these things that were thought as somebody else's problem become part of the business proper, as opposed to some back-office concept that you don't have to deal with every day," Wiesel said.
"Now, every part of the bank has to be digitized. When you get to that, and you look at the growth of the code base, and you look also the growth of technology as a percent of spend for banks, you start realizing that this is one of the most important leverage points if you're a CFO looking to control your bank's financials," he continued.
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'There's no app store' for banks looking to shop for new technology
Using The Floor's product, banks can compare and analyze tech products — "There's no app store at the moment if you're a CIO," said Wiesel — from internal API offerings to outside vendor tools.
Ultimately, the hope is that greater visibility around the usage of tech applications at banks, for example by offering a place where firms can submit reviews and anonymously share data, will drive greater efficiency in how they spend.
"I think it's one of those cases where the best in breed prosper when there's great transparency," said Wiesel.
See more: A startup backed by JPMorgan and Bain Capital that helps Wall Street deploy apps has set its sights on moving beyond the trading floor
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Relatedly, Wiesel said he sees opportunities for The Floor to upend the onerous due diligence and onboarding process banks use to vet and bring on new tech offerings.
As for future plans, The Floor has begun to roll out its offering with Italian bank Intesa Sanpaolo and Japanese banking giant Sumitomo Mitsui. Wiesel said he's busy thinking through the firm's strategy in 2021 as The Floor looks to grow its operations in the US and globally.
"You're certainly going to see new funds coming in" this year, Wiesel said. He said the company is also planning on "making a few key hires in the coming months" and will be announcing new bank partnerships.
"I feel like I'm starting in a very similar environment to where I started and what first pulled me into the industry, which is this opportunity to work with incredibly high performers, with big ambitions, really big dreams, all around a core idea that I think can fly," he said.
