Leading the charge: Nitin Tandon spearheads Vanguard’s tech ambitions

Nitin Tandon is sitting in his office in Malvern, Pennsylvania. Recalling his interview from September with consulting firm Metis Strategy, the chief information officer of Vanguard cringes. In the YouTube video, he describes Vanguard as “fast followers” when it comes to experimenting with emerging technologies.

“What we do with the emerging technologies is plot them along a time to maturity versus impact,” Tandon explained in the interview. “We take a deliberate and informed position on each technology; you won’t see us blazing the trail on something new where value has not been proven because we don’t want to risk our investors’ money. But as soon as it has, you will see us leading the pack of fast followers.”

Over a call on Microsoft Teams, it becomes clear that the term has been retired—at least internally—and there is an ongoing discussion as to how to coin a new descriptor.

“It’s funny,” he says one afternoon in late March, “I was at an all-leader meeting [recently] and I was talking to them about our vision for 2024. One of them pulls me aside—and he’s a senior architect who joined us from Fidelity—and he says, ‘I don’t know about fast follower, at least from a marketing perspective. It doesn’t sound great.’”

Tandon’s intent behind the now-abandoned term was to show that the firm only pursues technologies once it can identify provable use cases, as it’s done recently with hot-button industry topics such as AI, tokenization, and cloud. But the architect explained that the term “follower” belies Vanguard’s tech-forward approach.

After all, it can’t be ignored that Vanguard was a relatively early adopter of cloud in an industry that was looking at the likes of Amazon, Microsoft, and Google warily. And Tandon is intimately aware of the firm’s cloud evolution.

Tandon’s journey to Vanguard was unexpected. He started his career in financial services at Citi in his native India after graduating from university, before moving to the consulting space in 2002, when he joined Deloitte’s New York office. Spending the next 16 years there, he consulted with several companies on business strategy, focusing on cloud-related initiatives.

Vanguard became a client of his in 2016. At that time, the investment manager was already evaluating a shift to public cloud, which he saw as particularly forward-thinking. In stark contrast to today, financial services firms a decade ago were hesitant to work with cloud systems due to regulatory risk considerations. But Tandon, as the cloud practice lead at Deloitte, looked upon the ambition with admiration rather than doubt.

This admiration was mutual, as it turned out. John Marcante, Vanguard’s previous CIO who became CIO-in-residence at Tandon’s former employer Deloitte, valued Tandon’s skills in both strategy work and executing ideas. While working with Deloitte on Vanguard’s decision to go cloud-native, a choice that had been made internally in 2014, Marcante wanted to secure as much of Tandon’s attention as possible.

“I had a conversation with Janet Foutty, who was the chairperson of Deloitte at the time,” Marcante recalls. “We’d made an early call to go cloud-native, but we really needed some help and support from Deloitte, and we wanted Deloitte to be a partner here. I had met Nitin, and I made a plea to Janet to free him up as much as she possibly could so he could be dedicated to Vanguard.”

Tandon understands the importance of not falling behind once a technology has merit. During that discussion with the senior architect who objected to the “fast follower” description, Tandon saw the light.

“He said, ‘We are leading in cloud; we are leading in GenAI experimentation. When you say ‘follow’ it sounds like you’re following someone, and I don’t know who you’re following,’” Tandon says. And he agrees.

Iron Man’s Jarvis and Vanguard’s future

Located about an hour west of Philadelphia, Vanguard’s Malvern office complex does not have a brick-and-mortar branch where customers can walk in and check on their investments. The company is digital-first, and more than 95% of transactions are digital, so the campus itself is dedicated to the staff, with gym facilities, coffee shops, and co-working spaces dotted across the grounds.

Tandon’s office looks both professional and personal in good measure. Behind his desk is a row of colorful, work-related books, which are buttressed by two cabinets. On a higher shelf, photographs of his family gaze upon the neat space. Near the back of the room, there is a table with two swivel chairs next to two large, rectangular, Rothko-style paintings, providing another burst of color in the otherwise gray room.

Vanguard’s founder, John Bogle, originally named his company after HMS Vanguard, the ship on which Horatio Nelson beat Napoleon’s French fleet in 1798’s Battle of the Nile. In the early ’90s, the office buildings on the Malvern campus were also given names from the same battle, including Goliath and Majestic. The most traditional meaning of the firm’s namesake, “vanguard”—the foremost part of an advancing military formation—followed this theme, tying together Bogle’s vision of his company as a powerful ship at the front of the action.

And with Vanguard having been at the forefront of cloud adoption in the world of finance, it also wants to lead the charge when it comes to AI development.

In truth, Vanguard has made significant strides in integrating emerging technologies such as generative artificial intelligence (GenAI) into day-to-day business operations, while also testing use cases for innovations further removed from the current AI hype cycle. Earlier this year, WatersTechnology interviewed John Ameriks, head of Vanguard’s quantitative equity group, and he revealed that his team, which sits between the portfolio managers and analysts at the firm, has been experimenting with neural networks.

Tandon’s eyes flash when he starts to talk about use cases for new technologies within Vanguard, and he explains that he could happily talk about the applications of AI alone for hours. He says that since the GenAI “moment” hit in late 2022, when the first public iteration of ChatGPT was unleashed, Vanguard has been experimenting with the technology “rapidly but safely” by employing a human-in-the-loop model in all its experiments.

He outlines that Vanguard’s main goal internally with GenAI is to increase the efficiency and productivity of the company’s advisers. Last year, Vanguard rolled out GitHub CoPilot to its developers, allowing them to write code more effectively, and GenAI platform Writer is being used for content creation in marketing and blog posts on the company website.

“There’s so much potential in making our advisers more productive,” Tandon explains. “A financial adviser spends a lot of time preparing for calls, and then afterward has to write down key takeaways. We just saw the results from a model we developed that summarizes these calls, and that’s fantastic to see. This so-called summarization is something we’ve been working on for our advisers.”

Tandon says his team’s holy grail is to see at some point an AI assistant on the level of Jarvis from Marvel’s Iron Man films, an artificial intelligence that is capable of independent thought, accessing information from the internet instantly, and assisting with technical tasks. He envisages a scenario where, once AI assistant models have become much more intelligent, companies like Vanguard will need to reimagine their website interfaces to be more AI-forward, and request processing will become more conversational, instead of a navigation effort through sets of screens.

On the shoulders of giants

It was in 2019 that Tandon made the jump from the consulting world to the world of investment management. He initially signed on as Vanguard’s chief technology officer, excited by the company’s appeal and the chance to put his consulting ideas into practice, even if he hadn’t envisioned leaving Deloitte, where he had worked since 2002.

“I never thought I would quit consulting,” he says, in his characteristically soft-spoken but deliberate tone. “I was doing well; I was very happy, and I could see the clear path to retirement. A lot of companies have mission statements, and they truly believe in them. But something [at Vanguard] felt different. So when the opportunity came, and John and Tim [Buckley, Vanguard’s CEO] asked me to join in, I happily took the opportunity.”

After 18 months, Tandon experienced Vanguard’s rotational work culture firsthand when he was redeployed to lead the company’s corporate and retail systems. While there, he laid out an expansive and aggressive plan to modernize all Vanguard websites and mobile apps, as well as accelerate the firm’s cloud migration. He explains that Vanguard’s digital chops had “decayed” due to a lesser focus on it.

“We had focused on bolstering security in our datacenters, but the web experience had decayed, so we wanted to include that as well, and all that would be enabled through modernization,” Tandon says.

As a leader, you have to stand on the shoulders of those who went before you, as I did. Someone will stand on the shoulders of Nitin, and those will be massive shoulders

John Marcante, former Vanguard CIO

Plans of this depth and breadth would become synonymous with Tandon’s leadership. Jennifer Manry, head of corporate systems at Vanguard, was handpicked by Tandon to join his team once his stint in retail and corporate had ended and he had replaced Marcante as CIO. She says that Tandon’s background as a consultant, explaining difficult technology concepts to business-minded executives, has allowed the tech and business teams at Vanguard to become enmeshed.

“He’s a technologist but was also a strategist and consultant,” she says. “In other places, when people start talking about APIs or being cloud-first, the collective eyes of the non-technology people glaze over because they’re like, ‘What is that?’ But he can actually translate the tech strategy into meaningful business impacts.”

Tandon’s profile as an outsider and former consultant draws parallels with Vanguard’s incoming CEO Salim Ramji, who worked at McKinsey for 16 years before moving to BlackRock. Ramji is set to become the investment firm’s first CEO hired from outside its own ranks.

When he’s asked whether leading technology at a large corporation allows him to live out his consultant fantasies of putting his ideas into practice without having to negotiate with hard-headed business executives, Tandon laughs.

“It’s very fulfilling, but what is even more fulfilling is the opportunity to do it yourself, to define the strategy, and then to execute and see the results,” he says.

Brought up to speed on Vanguard’s cloud journey while at Deloitte, Tandon foresaw that an in-depth data governance update would be required for Vanguard to compete in the cloud. He believed that a simple lift-and-shift of applications to the public cloud from on-premises would not cut it, and that refactoring applications down to the data layer instead would drive better client experiences.

“I’ve seen a lot of tech transformations where data and analytics have typically been an afterthought. But with the power of data analytics and AI—and this was pre-ChatGPT, of course—we said, ‘Hey this has to be a pillar of the transformation as well,’” Tandon says.

Vanguard’s tech and data modernization process wasn’t limited to the cloud. Tandon says that in 2019, the firm wanted to be more resilient than its competitors but had similar numbers of outages to other companies of its size and scale. Vanguard, which manages more than $8 trillion of assets, had a target on its back and a mandate to outperform.

Driven by the idea that the company should be agile in responding to incidents, Vanguard’s website—both the public-facing side and the secure internal side—and its mobile app were modernized. Tandon notes that there has been a 76% reduction in major incidents, and what used to take several months to fix can now be done in days and weeks.

Tandon acknowledges that having a modern website is not some groundbreaking technological feat. He notes that Vanguard’s competitors also have modern, intuitive websites and that a high-functioning website in financial services might even be table stakes. For him, the achievement is less about the result itself; it’s more that it was born out of Vanguard’s philosophy.

“I want our client experience to be just as intuitive, just as contemporary as anybody else,” he says. “But where I want us to differentiate ourselves is in driving better client outcomes. We’re not going to differentiate client experience by making it more sexy—for lack of a better word—than anyone else’s, but we will make sure we drive better investment outcomes.”

One of Tandon’s examples for driving better outcomes was covered by WatersTechnology last year, in the practice of using behavioral analytics to persuade investors to take advantage of Vanguard’s suite of investment funds instead of being satisfied with a money market fund. Along with examples like these, Tandon believes that the way the business is constructed, where technology-focused and business-focused people are indistinguishable from each other, sets Vanguard apart in how it deploys technology to further its business goals.

Or, as his predecessor Marcante puts it, Tandon’s progress in managing Vanguard’s technology-first approach is heartening and represents a continuation of Marcante’s legacy, and the legacies of those before him.

“Nitin and I worked on Vanguard’s technology strategy together, so when he took over, my most proud moment was that he continued to further add to the woodpile, instead of destroying it and trying to build something new,” he says. “As a leader, you have to stand on the shoulders of those who went before you, as I did. Someone will stand on the shoulders of Nitin, and those will be massive shoulders.”