How tech and culture enable mid-tier consultancies to dream big

David Collins is the Managing Director for Consulting and Managed Services at professional services firm First Derivative. He talks about the challenges financial institutions can expect in 2022, key regulatory trends, and witnessing first-hand how smaller firms are challenging the established dominance of the Big Four when it comes to partnering transformation work.

2022 is seen by many as an important transitional year – what are the main challenges that lie ahead for financial institutions?

To save the world. No, I am serious, banks are taking the lead in changing the attitudes of global business to carbon and methane emissions, they are turning the global financial network to drive this initiative in a way that is far more effective than the empty governmental promises at COP26.

This is a powerful capability, and it is already being applied to saving the planet. Goldman Sachs and Citigroup are committing $750 billion and $1 trillion toward sustainable finance by 2030 respectively.

Like all superheroes, they also have a day job and we are in the middle of a radical change to technology; one of the key drivers of this is to make more effective use of their data to drive better decision making and services for their clients. In many cases, cloud is acting as a catalyst for change and these changes are touching every aspect of the bank from technology through data to people and processes.

Could you name the top financial regulatory trend that is on your radar and how should companies better position themselves to brace these changes?

The threat of the coming wave of environmental regulations - this is driving the superhero effect and will have an even more profound impact than anything that drove Company Voluntary Arrangements (CVAs). All the other regulatory changes on the horizon are business as usual by comparison.

Could you explain the current shift from reliance on traditional big-name consultancies to partnering with smaller, mid-tier firms?

Agility has changed everything, it has shown that the old generic waterfall ways do not work, they never have, they might be good for the consultants but they aren’t for the clients. You don’t need big teams to achieve great results. In fact, we now know that smaller, expert teams working hand in hand with our clients deliver the best outcomes. 

On top of that, finance is complex, generic consultants can only ever do so much when applying general methodologies. Knowledge is key to a successful outcome and highly focused ‘boutique’ firms are a concentrated source of expertise.

At First Derivative, our culture is all about solving problems, together, in teams, with our clients and partners. We have a reputation for applying pragmatic solutions and excellence in delivery.

How can other consultancies capitalise on this trend? Could you share First Derivative’s formula for growth and success?

It's all about people and culture. As the saying 'culture eats strategy for breakfast' goes, people with the right skills in companies with the wrong cultures will not get there. When I joined First Derivative, it became apparent very quickly that we had something special in our culture and we protect it fiercely.

We make a point of hiring for career and not role and making sure that people fit. While we protect our culture, we do encourage it to evolve, we don’t want it trapped in amber. It needs to stay relevant as we develop. 

One example of this is the concept of stretch. If our people working on a project are stretched down, meaning that they are working on a project that is not challenging, this will lead to poor delivery or even attrition. Our focus is to ensure all of our people are stretched up and challenged on a daily basis.