A Publication of HCL Technologies

Creating a Future-Ready Financial Services Organization

Five prominent CXOs offer their prescriptions for change

Content

Stephanie von Friedeburg

Vice President, Corporate Strategy and ResourcesInternational Finance Corporation of the World Bank Group

Michael Baresich

Chief Information O�cer

Ally Financial

Nuria Simo


Inter-American Development Bank

David Thompson

Executive Vice President, Global Operations and Technology, and Chief Technology O�cerWestern Union

Robert Alexander

Chief Information O�cerCapital One Financial

A Decade of Technology-Driven Transformation

Transformation on a Global Scale

Advice from a Pathfinder

Innovation at the IDB

Preemptive Transformation

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18

30

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Editor-in-Chief Paul Hemp

Managing Editor Neha Anand

Associate Editor Tanvi Gupta

Contributing Editors Jayabrata Nag, Peter High,

Srikrishna Chintalapati

Contributing Writers Stephanie Overby, Pragati Verma

Art Director Rajesh Kumar Yadav

Project Management Ankur Banerjee, Ishha Bawa

Digital and Social Sanjeev Ahuja

Editorial Advisory Board C Vijayakumar, Matt Preschern,

Rahul Singh, Parag Samarth, Paresh Vankar, Apurva

Chamaria

Printing Qualprint, Pittsfield, Massachusetts

Lustra Print Process Pvt. Ltd., New Delhi

Acknowledgements Sarabjeet S. Bakshi, Raj Chinnappillai, Apoorv Iyer, Seshasai Parisaboina, Satishkumar S, Arif Sheri�, Derek Stephenson, Abhishek Upadhyaya, Balaji Yellavalli,

Contact UsFor information on reprinting articles and all other correspondence, please contact:

Tanvi Gupta

HCL Technologies Tower 5, Sector – 126 Noida – 201301, Uttar Pradesh, India Mobile: +91 9582-224-294 [email protected]

CIO Straight Talk is a periodical published by HCL Technologies (HCLT) meant for its existing and prospective clients for information purposes. The information contained in the publication contains general views based on the experiences of technology practitioners and subject matter experts within and outside of HCLT, expressed by them in their individual capacity and in no event shall HCLT (including its a�liates and group companies) be liable for any claim, damages or any other liability arising out of or resulting from this publication. You are advised to seek professional advice before making any decision that may aect your business.

All contents are copyright ©2017 by HCL Technologies Ltd. All rights reserved. Excerpts may be reprinted with attribution to HCL Technologies.

Facing the Future Blockchain, digital wallets, peer-to-peer lending, and other manifestations of “fintech.” Formidable rivals who didn’t exist a few years ago. The constant specter of cyber-attacks. Growing customer expectations of a seamless customer experience. Even such pressing higher-level issues as the alleviation of global poverty.

To say that the financial services industry faces major digital disruption and daunting challenges is an understatement.

In this special issue of Straight Talk, the CIOs or CIO-equivalents at five very di�erent financial services organizations describe how they are responding to the turmoil—how they are working to make their businesses “future ready.”

For example, Capital One, a major consumer bank and issuer of credit cards, is shifting IT resources from building infrastructure to building great apps for customers. Ally Financial, the former lending arm of General Motors and now one of the largest online banks, is partnering with venture capital firms to get an early look at promising new technologies. Western Union, the 165-year-old global money transfer company, is adopting a “defense in depth” approach to cyber security. The World Bank and the Inter-American Development Bank, which provide crucial financial assistance to developing countries, are furthering their digital transformations by creating a mission-centric culture in the IT function.

These changes are mirrored by changes in the traditional role and professional profile of the CIO. Robert Alexander, CIO of Capital One, began his career as a corporate strategy consultant and has spent much of his 18 years at the bank working in the lines of business. David Thompson, CTO at Western Union, a job that includes traditional CIO responsibilities, is also head of global operations, responsible for customer experience. Stephanie von Friedeburg, until recently CIO at the World Bank, is now Vice President, Corporate Strategy & Resources, at the International Finance Corporation, part of the World Bank.

Financial services organizations face a disruptive digital future. But, as the evolving role of the CIO indicates, it’s not just about technology.

Paul Hemp Editor-in-Chief CIO Straight Talk

Wendy Semerau

HCL America, Inc. 3333 Warrenville Road, Suite 750 Lisle, IL 60532 USA Mobile: +1 630-234-4659 [email protected]

Robert Alexander


Capital One Financial

Works From:

Richmond, Virginia

Professional Background:

Since joining Capital One in 1998, Alexander has had responsibility for a number of Capital One’s lending businesses, including the U.S. Consumer Credit Card and Installment Loan businesses. In that capacity, he provided oversight for all marketing, portfolio management, and credit policy activities associated with these businesses. He also led the formation and startup of the company’s credit card e-commerce business. Before joining Capital One in 1998, Alexander was with Boston-based strategy consulting firm Bain & Company, where he led consulting engagements with Fortune 500 clients in a variety of industries.

Education:

AB (Physics), Harvard University; MBA, Harvard Business School

5

In any organization—especially one that has grown large and successful—it’s easy to make the next year’s strategy simply an incremental improvement on the previous year’s. Too few

companies make the e�ort required to position themselves for the future. But it’s critically important, particularly in this era of digital disruption.

I’m celebrating 10 years as CIO of Capital One this year, after nearly two decades at the bank. During my tenure, I’ve had the opportunity to be involved in an organization that is making that kind of continuous business transformation, driven by technology.

That journey began a decade ago with the primary task of integrating numerous acquisitions. Since then, we’ve changed just about everything we we could: hiring and sourcing strategy, the way we work, and the environment in which we do that. Today, we’re working on an array of new digital capabilities—next-generation mobile capabilities, real-time analytics, intelligent assistants, and wearable technology.

Our story is one of disruptive—and continuous—transformation.

A Decade of Technology-Driven TransformationThis long-time CIO offers his experience-based prescription for continuous disruption.

6

THE SEEDS OF CHANGE

When I took this job in 2007, we were on the cusp of real change in the banking industry, our company

strategy, and our technology approach. We were integrating banks that we had purchased and rationalizing infrastructure across these entities. We developed a competency around great delivery of big, complex projects.

With our purchase of ING Direct in 2011, we became a major player in the digital banking realm. We knew that digital leadership would be a competitive di�erentiator. But it required a di�erent kind of IT organization, a novel delivery approach, and a new way of doing business.

Like many IT organizations, we had taken the waterfall approach to project delivery; everything took 18 months. We delivered projects with precision and quality. But we needed to develop a more progressive way of working.

We decided to adopt the agile approach to development in 2011. We began by using agile development for just our new digital capabilities, but quickly realized that the approach could deliver value more broadly. By 2013 we rolled it out across the organization. The constant iteration, checking progress against market demands, and continual improvement was incredibly powerful.

A HOME TEAM ADVANTAGE

We needed to build out our internal software development team with great engineering talent, creating

a critical mass of talent that would serve to attract others. In order to do that, we needed to shift our operational approach to mimic not our traditional financial services competitors but the top technology companies where those professionals liked to work. We were convinced that the winners in financial services would be those that operated the way the tech giants do.

Today’s best developers don’t want to work on legacy platforms or deal with slow, bureaucratic ways of processes—an unfortunate hallmark of the banking industry. They want to hit the ground running and work with the latest technologies. Our agile transformation helped. We also began to embrace the world of open source development. We not only drew on open-source technologies, we also launched our own open source projects and now give back to the community. It’s become part of the fabric of the way we work internally, as well, sharing and collaborating on software development. That’s helped us build a strong community of software engineers and has advanced the state of the art of our own technology systems.

An ecosystem of open source projects has emerged, changing the way companies can do data and analytics. We want to ride that wave of

We knew that digital leadership would be a competitive di�erentiator. But it required a di�erent kind of IT organization, a novel delivery approach, and a new way of doing business.

7

technology innovation in order to handle vastly larger quantities of data in ways that we never could before. That will enable us to become a more integral part of our customers’ lives, showing up at the moment when customers need our services.

We also made changes to our physical work environment. I believe people naturally like to collaborate and move quickly and get things done. As we started to scale our agile approach, we recognized that this way of working required more physical interaction. We created new open workspaces that enable interaction. We’ve adopted new technology solutions to foster collaboration across geographic locations. We also introduced a scaled agile framework to enable multiple teams to work together on larger programs.

A MOVE TO THE CLOUD

In addition to growing our software engineering capabilities, we have reimagined how we deliver IT infrastructure. We chose to take a

cloud-first approach to software development, with AWS as our predominant cloud infrastructure provider.

We don’t want to be in the business of building infrastructure. There are companies that have invested an awful lot in that and have

An Unusual Career Path I’m not your typical CIO. I served in the Air Force, was a strategy consultant at Bain & Co., and earned an MBA at Harvard Business School. I’ve been at Capital One for 18 years and have spent a good portion of that time working in the lines of business. But while I don’t have a tech background, my experiences have served me well.

In the Air Force, I developed missile systems, which gave me insight into how to manage huge projects. Business school broadened my mind, and the case study approach trained me how to think and speak like a business manager. My time as a consultant provided a continuing education in business strategy, because you are typically tackling some of the most di�cult problems a company is struggling with.

At Capital One, I’ve spent a lot of time in our credit card and lending businesses. At one point, I “volunteered” to lead an infrastructure overhaul of the credit card business, which was the largest IT system replacement program in the company’s history. It was a big, risky program that would take several years. But we pulled together folks from throughout the business—operations, marketing, and technology—to get it done. By the time I was named CIO, I had acquired a good skill set for the job. But I couldn’t have guessed how much more I had to learn. And that continues today. One of my favorite parts of my job is continually learning from the talented people I work with.

I believe people naturally like to collaborate and move quickly and get things done. As we started to scale our agile approach, we recognized that this way of working required more physical interaction.

8

tremendous scale. We can instead focus on building great applications for our customers. That’s where we can make a di�erence—not building data centers or running our own private cloud. That has enabled us to move quickly and nimbly while some other big banks remain mired in their own kind of internal infrastructure challenges.

A CULTURE OF OWNERSHIP

Our move to DevOps has been another aspect of our continuous transformation. It’s partly about automating how we

build software from development to deployment. But it’s also enabled a very important shift to a culture of ownership within IT.

By bringing development and operations together, our software engineers now own their code all the way through production, which creates powerful benefits. They’re able to quickly resolve issues that arise because they’re no longer throwing their work over a wall to operations. We’re also moving our operation teams upstream

and integrating them into the development teams. DevOps has opened everyone’s eyes to the importance of code quality and delivery and what it takes to develop systems that can run at scale reliably in a very demanding environment.

There are employee satisfaction benefits to DevOps, as well. People like working in an environment that operates with a high degree of e�ciency and turns out great capabilities and software products for our customers. As a leadership team, we’re telling our entire organization that this is what IT success looks like. And every part of our organization—every team—is working toward that goal.

AN EVOLVING INDUSTRY

There’s an incredible amount of activity and innovation going on in the world of new technology for financial services,

particularly with fintech startups. There’s a recognition that the world of financial services and technology are converging in very powerful ways.

throwing their work over a wall to operations. We’re also moving our operation teams upstream

9

• It’s all too easy for a successful organization to make next year’s strategy simply an incremental improvement on the previous year’s. But in this age of digital disruption, companies need to be regularly repositioning themselves for a radically di�erent environment.

• Software talent is attracted to an organization that already has a critical mass of great software engineers. And you won’t succeed in building that core group of top talent if they have to work on legacy platforms in an environment marked by slow and bureaucratic processes.

• DevOps fosters a culture of ownership in IT, with software engineers owning their code all the way through production and thus able to quickly resolve issues that arise.

THE TAKEAWAYSTHE THE

Our field of competition is very broad. We need to be attentive to what the large digital superpowers are doing, what our traditional legacy competitors are up to, and what’s going on in the venture capital space. Everyone’s working to solve many of the same problems, but coming at them from di�erent angles.

We stay engaged by having a San Francisco-based team that’s dedicated to keeping up with the latest technology companies and developments. We have relationships with VCs that are involved in fintech as well as with other enterprise applications that are relevant for us. We bring in start-up companies to run pilots—some of which we have deployed widely. We’ve acquired a number of emerging technology and design firms. We’ve learned a lot from these startups, both in terms of how they operate and how they build technology. And we measure ourselves against their nimbleness and flexibility. Sure, they have the benefit of a clean slate. But we’re only 22 years old; there are a lot of areas where we can start fresh.

This approach has helped us introduce some great, new digital products to help our customers with their financial lives. Our Wallet app provides a ton of capabilities for customers to track and manage spending, earn and redeem rewards, and benefit from notifications and insights generated by their use of our products. We launched a new capability using Amazon’s Alexa that enables customers to use a voice interface and natural language queries to manage their money.

It’s amazing how much our company has changed in 10 years—how much our IT organization has evolved, how much our business model has shifted, and how much the world of technology outside has advanced. I may have a longer CIO tenure than most, but the job has continually changed along with everything else. It’s so dynamic—and that’s the only thing that’s not likely to change.

Stephanie von Friedeburg

Vice President, Corporate Strategy & Resources

International Finance Corporation of the World Bank Group

Works From:

Washington, DC


In late 2016, after serving as CIO of the World Bank Group since 2012, Stephanie von Friedeburg was named Vice President, Corporate Strategy & Resources, of the International Finance Corporation. At the IFC, where she earlier served as CIO, she is responsible for corporate strategy, budget, IT, and human resources. During her four years as CIO of the World Bank Group, von Friedeburg worked to transform the role of IT into that of a strategic business partner. This article describes her experience as CIO of the World Bank Group.

Education:

MBA in International Finance, University of Pennsylvania (Wharton School); MA in Russian, Central European, East European and Eurasian Studies, University of Pennsylvania (Lauder Institute); BS in Economics and Russian Area Studies, Georgetown University (School of Foreign Service)

11

Necessity may be the mother of invention, but it’s people that make it happen. For an IT organization to help transform an institution, the individuals in the

technology group need to make a concerted e�ort to look beyond their jobs in order to understand the needs, struggles, and goals of the business. Only by doing so will they be able to create and bring to the table new technology-enabled solutions.

When I became CIO of the World Bank Group, my job was to figure out how we could strategically apply technology to either grow the business or make it run better. At that time, though, very few of our IT sta� members understood the business. And only a handful could tell you the mission of the Bank, what we call our twin goals: to alleviate poverty and create shared prosperity.

I was intimately familiar with those goals, having come to the CIO role from the operations group. That was a beneficial perspective for me to have, putting me in a unique position to be a bridge between the business and the technology function. But I could not do that alone. I needed a team that could connect the needs of the business with new technology solutions and processes.

Transformation on a Global ScaleAn overhaul of the World Bank’s IT function gave the group a central role in helping the Bank realize its dual mission of alleviating poverty and creating shared prosperity globally.

12

In the four and a half years I served as the World Bank Group CIO, our IT organization created a solid relationship with the business. Because everyone in IT began to live and breathe the mission of the bank, we were able to quietly lead from behind and bring solutions to problems the business didn’t even know it had. We created a standardized technology foundation in what was a largely decentralized business. We brought new people and new ways of thinking into what had been

an insular IT group. We forged relationships with technology vendors and startups and got more creative in our solutions. And that’s just the beginning of what IT can accomplish at the Bank.

BUILDING A FOUNDATION FOR CHANGE

For years, the World Bank Group IT department had been decentralized. We needed to consolidate the operations

into one central IT function, in order to create a foundation for what we wanted to accomplish with new technology solutions.

But we didn’t start with standardization. In fact, we decided not to change anything right away. The first step was simply to bring everyone from the five di�erent subsidiaries together. We started to manage the various systems in a more holistic way. Even that was a challenge because two groups may have been using the same technology but managing it very di�erently.

Once we got everybody together, a process

that took more than two years, it was easier to see what we might want to accomplish. It was then that we created our IT strategy for standardizing around common processes and technology.

A great example of what we did is our CRM system. Di�erent operations around the world were using the same CRM system, but employing di�erent business processes. So we looked at what everyone was trying to accomplish and created more standardized processes for everyone. Over the next couple of years, there will be more of this, which should result in cost savings.

THE ROI OF DIVERSITY

As part of the new technology strategy, we developed a new sta�ng plan that created positions for the new

technologies we were going to support and eliminated the positions that were redundant and/or supported technologies that were being decommissioned.

We had 80 new positions to fill. We took a step back to look at how we were sta�ed at the time and what new types of people we might want to hire. The bank is a unique organization. We serve 189 member countries! And at an enterprise level, we attempt as much as

We didn’t start with standardization. In fact, we decided not to change anything right away. The first step was simply to bring everyone from the five di�erent subsidiaries together.

13

possible to reflect that tremendous diversity in our sta�ng. But that wasn’t true in the IT organization. We realized that we needed to focus on diversifying the team. As a result, my management team agreed that half our new hires should be women and 12.5% ought to be from Sub-Saharan Africa or the Caribbean.

We have had great success with this approach. It may have taken us a little while longer to fill some positions, but our sta� is becoming more diverse. We have 1,200 people working in IT, and change takes time—but we really started to see a di�erence.

The younger sta� members we hired, for example, are able to bring new ideas to the table. They’re more curious and open to new solutions than some of our more tenured employees. For example, a year and a half ago, our team told me that our storage contract was up and they wanted to sign a new, very expensive five-year contract with the existing vendor. They didn’t see the value of putting that contract out for bid. They were comfortable with their high-end storage solution.

Ultimately, we did an RFP and signed a deal with a new vendor. That new technology and those new relationships are changing the way we think about storage, not just from a cost perspective, but from an access and a speed perspective. And the team is so excited. Both the older and newer members are talking about what they might tackle next that we hadn’t been able to accomplish in the past. A combination of new technology and a few new faces has changed how we think and operate.

Meeting Millennials Where They AreThe World Bank Group has been built by people like me: lifetime employees who were drawn to the mission early on in their careers and never left. And we’re an important part of the organization. But to continue to innovate, we need to attract younger workers who take an entirely di�erent approach to their career. I have a fabulous data scientist who helped us figure out how to use drone technology to get a better idea of the situation on the ground in the Balkans. He did some great work with us for 18 months, and then he wanted to leave to see what he could accomplish elsewhere. Many of his peers are the same way.

We as an organization have to be able to bring young talent in, learn from them, and be able to

let them go. That’s not something we do very well. Our culture is built around doing your time as a junior member of the group and working your way up to do bigger things. We’ve got to change our approach, because that’s not the way millennials operate. They want to contribute right away and may only stay for a short time.

We’re trying to change our approach within IT. One way we’re starting to do that is by forging partnerships with local universities. We bring students in to work with us for a summer or for another internship period. They help us evaluate and incorporate new technology to support our mission, and then we send them back out into the world.

14

TO INNOVATE, FIRST YOU MUST UNDERSTAND

Today, the IT organization actually understands what it takes for the bank to operate. They see what it takes for a task

team leader in Ulan Bator to do his or her job, and they’re beginning to ask themselves how they might do things di�erently.

There is an operations portal, for example, that a task team leader must use to produce a country project review every six months. The report used to have 800 fields, and task leaders had to toggle back and forth between our ERP system and the portal to enter the information.

Because our teams had gotten to know the business process and what the task team leaders were trying to accomplish, they knew that many of those 800 fields weren’t needed. They suggested removing 500 of them and created a much more e�cient workflow for the task team leaders. It’s been a massive success. We made similar changes to many standardized reports. Those kinds of things couldn’t have happened had the technology teams remained the technology teams, and the business teams remained the business teams.

DIGITAL STARTS WITH DATA

When I arrived, the World Bank did not have much in the way of data governance. I suggested that we

create a data council and agree on the terms we were using to define things so that we might make better use of the data we were collecting. And as we started to think about how we might use digital technology to drive our mission, we realized that the same problem we

Emerging Technology for Emerging EconomiesFrom what I’ve seen, I believe that the digital divide is getting bigger, not smaller. I hear people say that the Internet of Things is going to fix everything. And I say, “Well, what about Africa? You can’t support the Internet of Things on a 2G network.”

The World Bank has a huge responsibility, and historically we haven’t been good about including technology in our solutions. One of the things I try to do is make sure technology is always a part of the conversation.

I’m fascinated by blockchain, for example. The way that technology is able to prove a chain of custody and eliminate the middleman in transactions could be a game changer for our financial advisory groups. That’s one technology the Bank is beginning to examine, although we haven’t made any investments yet.

15

were encountering in the central IT group was happening at the operational level as well. Each of our 189 member countries gathered economic information di�erently and defined data in its own way.

The data council that was created has a pillar that defines data for operations and a pillar that defines data for development. This has created a foundation for digital transformation. We have a sta� of incredibly well-educated economists, but they weren’t terribly tech savvy. Once we were able to have these conversations about data, however, it opened their eyes to the technological possibilities. And we brought in some younger IT professionals who began to show them the really interesting things they could begin to do with data.

For example, in order to achieve our twin goals of alleviating poverty by 2030 and creating sustained shared prosperity, we need to be able to measure these metrics. But not every country can a�ord to conduct a household survey at least every other year in order to assess its economic progress. In fact, there were about 75 that couldn’t, and it would take hundreds of millions of dollars in World Bank loans to those countries to fund the surveys.

So we had to get creative. Pakistan, for example, had a very robust annual survey process. We know more about its income distribution than any other country in the region. So we took high-resolution satellite imagery in Pakistan, compared that geospatial view with what we knew about income distribution, and found that the information was tightly coupled. We could then take high-resolution satellite images from Sri Lanka, which could not a�ord the survey, and make some accurate assumptions about income distribution. We worked on that project with Orbital Insights, a Silicon Valley startup.distribution. We worked on that project with

which could not a�ord the survey, and make

We took high-resolution satellite imagery in Pakistan, compared that geospatial view with what we knew about income distribution, and found that the information was tightly coupled.

16

VENTURING TO SILICON VALLEY

Orbital Insights is just one of our startup partners. Before becoming CIO, I had worked closely with venture capital

firms and invested in new technology for emerging markets. For me, it’s a natural instinct to want to keep on top of what’s going on in Silicon Valley.

The first startup we worked with was Box.org, which provides nonprofits with world-class technology tools that can help them innovate and fulfill their mission. Following that, we brought in lots of interesting pieces of new technology.

Our cloud-first strategy made a connection with Silicon Valley, the epicenter of new technology, even more important. We needed to know what the latest and greatest advancement was for Amazon Web Services or Azure. I don’t know how you stay on top of the quickly evolving technology landscape otherwise. I would take interested members of my sta� with me every time I traveled out West, and they shared what they learned when they returned.

Having established that foothold in the Valley, startups and VCs began coming to us with technology they thought might have value for the bank. They would ask us what problems we were trying to solve. The CEO of a partner startup would share his or her development path with us and we would share our strategic plans with the CEO, so we could innovate together. There’s a willingness on the part of many small or startup companies to codevelop products. They share our excitement—and I mean the World Bank IT function, as well as the organization as a whole—about our mission to make the world a better place.

• For an IT function to really help the business, it has to understand the business, living and breathing the organization’s mission. When that happens, IT can o�er solutions to problems that the business doesn’t even know it has.

• One way that IT can help a sprawling multinational organization is to bring consistency to the way data is gathered and defined. This creates opportunities for all kinds of creative new uses for that data.

• Really understanding the di�erent job expectations of millennials means changing your expectations of them. Sometimes you have to be willing to benefit from what young employees have to o�er over the course of a year or two, then wish them well in their next endeavor.


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Michael Baresich


Ally Financial Inc.

Works From:

New York City


As Chief Information O�cer of Ally Financial, Michael Baresich is responsible for all information technology and related services, including application development, operations, infrastructure, and information security. Prior to joining Ally, Michael was Executive Vice President and Chief Information O�cer of financial holding company CIT Group. He previously held various senior-level IT positions, including Managing Director and Global Chief Information O�cer at Citigroup Asset Management; CEO of CoKinetic Systems, a software development and services company; and global head of Information Technology and Operations for Deutsche Bank Asset Management. He serves on the board of directors for CoKinetic Systems and on the IT Advisory Board of New York Life.

Education:

BA, Binghamton University; MA, University of Florida; MBA, University of Pennsylvania (The Wharton School)

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Financial services companies today are shape-shifting into technology companies. Their success increasingly depends as much on enterprise software and mobile app development as on finance.

But the monumental journey of this digital transformation typically begins with small steps, even for an online-only bank like ours, whose steps can be traced back to the financial crisis.

Advice from a PathfinderThe CIO of a digital financial services provider offers experience-based insights that are relevant to legacy financial institutions as they embark upon their digital transformation journey.

20

COST CUTTING: A BALANCING ACTWhen I joined Ally Financial four years ago, we were still digging our way out of the after-e�ects of the economic downturn. Ally has its roots in the former GMAC, the General Motors subsidiary that for more than 80 years provided car buyers with financing through GM dealers. GMAC started a banking business in 2000, and in 2010 both the banking and financing businesses were rebranded as Ally Financial. In 2014, Ally became a publicly traded company. Along the way, the business was battered by the 2008 economic downturn, which forced us to cut costs and become more e�cient in order to survive.

But this test also provided us a tremendous opportunity to review our business model and find new sources of competitive advantage. While we continued our historical business of auto financing, we also reinvented ourselves as a digital, branchless bank. Even with bare-boned budgets focused on cost cutting and reducing corporate overhead, we continued to reimagine our business technologies to make the company nimbler and lighter.

As we increased e�ciency, we made sure that a sizeable portion of the cost savings were invested in digital technologies to create innovative o�erings and user experiences. We hired mobile and web developers to ensure our client-facing apps were world-class and invested in a flexible architecture to position ourselves for future growth.

As an online-only bank, we needed to be in the forefront of digital interfaces and were early adopters of biometric fingerprint recognition technologies like Touch ID and mobile payment solutions like Apple Pay and Samsung Pay.

SEEK INNOVATION WHERE IT ISOur unrelenting focus on digital innovation continues as we experiment with emerging technologies, including voice assist, blockchain, cloud, and data analytics. We have set up an in-house lab to build new digital products, and we also scout for partners across a range of strategic areas.

Our recent acquisition of TradeKing is a good example. We had been evaluating the rapidly evolving digital wealth management space for a while via an informal cross-functional study group. People from Ally’s core banking, corporate strategy, and technology functions went to the whiteboard to identify what kind of digital o�erings would work best for our customers. In our evaluation of promising solutions, we were also considering whether we wanted to build in-house, partner with someone, or acquire.

The learning of our cross-functional team came in handy when the TradeKing opportunity appeared on our radar. We were already prepared with our research, moved quickly into due diligence and closed the deal swiftly. And this is typical of how we partner with our businesses. Our IT team is involved in every

We seek digital innovation wherever we can find it and then act as an evaluator and catalyst for the rest of the organization.

21

deal, right from research to due diligence to implementation and integration.

And it’s not just acquisitions. We are also working on building strong and long-term relationships with several venture capital companies, to get a sense of new and emerging technologies as well as innovative financial models in lending, investment management, and the client services space. We are partners with one of the largest accelerators in Silicon Valley and also participate actively in fintech accelerator labs in New York and Charlotte, where we have sizable operations. We seek digital innovation wherever we can find it and then act as an evaluator and catalyst for the rest of the organization.

LOOK BEFORE YOU INVESTAs we seek opportunities for innovative digital solutions, though, we try to avoid getting lost in a maze of the latest shiny technologies. It’s just as dangerous to invest lots of time, energy, money, and other resources chasing something that’s not really relevant to your firm as it is to miss out on an opportunity altogether.

I think the best way to avoid this is to examine each technology on two parameters. The first is how it will create value for our customers. The second is where it is in the hype cycle, in terms of maturity, business value, security, and readiness for adoption.

Consider blockchain, for example. We believe that it holds great promise for control and distribution of digital assets.

But we also realize that it is di�cult for a single organization to reap benefit from it. Blockchain will take o� only when a consortium of

Start with the BasicsAs CIOs and their organizations scout for innovations to survive and thrive in the digital revolution, it’s easy to lose sight of the fundamentals.

The first step in any digital transformation is to ensure that automation and digital capabilities are delivering e�ciency and controlling costs. It sounds very basic, but we always looked at that as the foundation—if it’s not in place, there is nothing to build on.

You need to demonstrate to your board that you are driving e�ciency hard enough to meet industry best practices and standards. It’s equally important to show them that the company’s information and infrastructure is secure.

Once the Board is convinced that the IT house is in order and that the windows and doors are locked, it’s time to start measuring and describing IT costs in terms of investments, not expense items. Once IT gets measured, it’s easier to show how it is managed and how all IT investments are driven by business needs. It’s essential that these investments have business sponsors, who can advocate for the programs.

Finally, having distinguished between costs and investments, you have to show what the returns are on the investments, while honestly sharing what went right, what didn’t, and what you’ve learned.

Only when these basics are in place is it time to pursue innovation.

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companies, regulators, and other organizations adopt it. Otherwise, it’s like buying a fax machine and not having anyone to fax to. So, we are seriously studying and investing time and e�ort in blockchain, but we’re likely to wait until some practical use cases come into focus and we see early signs of an ecosystem developing around it.

Another area of interest is the human-machine interface. We are keenly watching new ways our customers might interact with smart devices. We’ve already seen people move from desktop browsers to downloadable apps on mobile phones and tablets. And now we are wondering if our customer will continue to interact with us via websites and apps or whether customers will want to access our products and services using chatbots and/or voice interfaces. Will devices like Amazon Echo and digital assistants like Alexa, Siri, and Cortana become the dominant interfaces? We are exploring several such questions to redefine how our customers interact with us.

In assessing new technologies, we try to follow the money. Our relationships with venture firms are important because the capital flows show us where Silicon Valley is investing. In turn, their dialogue with us shows them what we’re willing to invest in and adopt. The bi-directional information flow helps create a market discipline that dampens the hype cycle a bit.

Having been born in the digital space, we believe we have an advantage over legacy banks. But that’s not enough. To stay ahead in the game, we need to work on the right technologies that o�er the right customer experience at the right time and place.

• The success of financial services companies increasingly depends as much on enterprise software and mobile app development as on finance.

• Establishing strong and long-term relationships with venture capital companies helps you assess emerging technologies, by providing a window onto what VC firms are investing in. The firms benefit from getting a window onto what sorts of technologies you are willing to adopt.

• A new technology can be assessed on two parameters. One is the value it is likely to create for your customers. The second is where the technology is on the hype cycle, in terms of maturity, business value, security, and readiness for adoption.


2323

www.hcltech.com

David Thompson

Executive Vice President, Global Operations and Technology, and CTO

Western Union

Works From:

Denver


David Thompson is responsible for building and developing the IT infrastructure to support Western Union’s next generation of payment products and services. He has accountability for all information systems and technology functions across the company, including the point-of-sale interface for its global agent network of more than 500,000 locations in 200 countries and territories. Prior to joining Western Union, David was Group President, Services and Support, and Global CIO of Symantec Corporation, after serving as Symantec’s Executive Vice President and Chief Information O�cer. Earlier, he was Senior Vice President and Chief Information O�cer for Oracle Corporation and Vice President of Services and Chief Information O�cer at PeopleSoft. He is a director of CoreSite Realty Corporation.

Education:

Business Administration, Management and Operations, Marymount University; Computer Science, American University; Air Force ROTC, Air Science and Operations, American University.

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Western Union has always been on the forefront of technological innovation. The company launched in 1851 with the invention of the telegraph. Now, 165 years later, we are digitally transforming ourselves and devising new and easier ways for our customers to move money around the world.

I have two jobs. First and foremost, I am head of global operations, which delivers our entire customer experience. The other portion of my job is leading our technology organization, combining both the traditional CIO and CTO roles. And I joined the company four years ago at a time when those two aspects of the company began to converge, enabling the company to bring new capabilities to the market. This dual role allows me to see the end-to-end process and come up with ways to make it better and drive a lot of e�ciency.

We have a long and strong history of retail brick-and-mortar infrastructure and an agent network that provides services to customers in half a million locations in 200 countries around the globe. In the last few years, we’ve been investing heavily in the omni-channel experience as our consumer and business customers interact with us in new ways, from our mobile app to remote kiosks to online bill payment. We’re looking at artificial intelligence and machine learning to automate more of what we do. We’re investing in analytical tools that can identify risk

Preemptive TransformationIn an industry racked by wrenching change, Western Union faces new and nontraditional competition from all sides. The 165-year-old company’s strategy: Disrupt yourself before you get disrupted.

26

and fraud. As the regulatory environment has gotten more complex, we’ve also introduced new technology-enabled capabilities around compliance. The financial technology sector is a white-hot area of interest and investment today, so we’re also making sure that we continue to lead with our innovative o�erings—disrupting ourselves in an industry full of potential disrupters.

THE IMPORTANCE OF BEING VIGILANTWestern Union is the largest global money transmittal company. Our advantage is our major footprint around the world and our experience in technology innovation. But we know that no company can rest easy in the digital age.

There are a lot of folks who are very interested in the business we do. For example, Western Union operates in 17,000 money transfer corridors around the world, where migrant workers send money home to their families, such as the U.S.-Philippines corridor or Saudi Arabia to India. Our closest digital competitor operates in just 35 of those. But we do have rivals for our most profitable corridors. There are upstarts coming at us with a di�erent experience or attempting to undercut us on price. We still have a competitive edge because of the value we o�er and a brand that customers trust. But we have to be very vigilant and make sure that we remain focused on delivering a di�erentiating customer experience, staying competitive on price and value, and remaining ahead of the curve with the technology we use to interface with our customers

One area we’ve been investing in is “staging” technology that enables a customer to stage a transaction and get it ready to go digitally. They then have the choice to complete the transaction physically in a retail location or complete it online. We’re also enabling many di�erent payment types in our platform. If a customer in Germany wants to use the local payment platform Sofort, we’re enabling it. And we’re o�ering that kind of choice on the receiving side as well; you can choose to receive the transfer through your mobile wallet or direct to your bank account or in cash. Continuing to introduce those features and functionality is what’s allowed us to remain the number one player in our game.

IF YOU BUILD THE PLATFORM, THEY WILL COMEIf you want to send $100 to someone within the U.S., that’s a relatively easy transfer to make. There’s very little regulation. It’s a low barrier to entry. And that’s where we see a lot of noise and activity in the marketplace.

But that’s not where the biggest challenges are—and the biggest challenges lead to the biggest business opportunities. Cross-border transactions are where we can provide the most value, and as head of operations and

We have to be very vigilant and make sure that we remain focused on delivering a di�erentiating customer experience, staying competitive on price and value, and remaining ahead of the curve with the technology we use to interface with our customers

27

technology, that’s where I’m focusing many of our new solutions.

In April, we introduced WU EDGE, a digital platform that enables small and medium-sized enterprises to trade internationally with confidence and ease. Business customers who want to enable cross-border payments can plug WU EDGE right into their existing financial platforms to initiate and manage cross-border payments. Banks that are de-risking and getting out of the cross-border transaction space are coming to us to white label our cross-border payment service.

Last October, we launched WU Connect, a platform that integrates with leading consumer messaging and social media platforms. The API-based platform enables third-party digital applications to integrate with us to provide global money transfer experience to their users. We’ve signed contracts with Viber and WeChat and have a healthy pipeline of social media and messaging platforms who’d like to use WU Connect to o�er financial services to their customers but don’t want to take on the risk.

These kinds of platform-based innovations are increasingly important to our business. We’ve been able to take these capabilities that we’ve built for ourselves and provide them to other organizations.

These are capabilities that we’ve developed internally and we’re at a stage where external companies are willing to pay us for them. It’s bringing new clients and revenues into the company. It’s particularly exciting to see these innovations take on a life of their own outside Western Union.

The Business Value of the CIO Having spent a good portion of my career in technology companies, I’ve worked with some of the brightest engineers in the world. They truly know their craft.

But the benefit that a CIO can bring to those companies—and any company—is figuring out how to apply technology and innovation to a business problem. I’ve always seen that as my role. And that’s enabled me to not only be a great technology consultant to the business, but a great business consultant to the engineering teams.

In order to provide that value as a CIO, you have to go very broad. You must spend a lot of time to understand the many di�erent areas of the business. If I’m going to evaluate a marketing tool, I have to understand marketing in order to accurately convey the value of that tool to the CMO. If I’m looking at financial tools, I have to have a conversation with the CFO about financial reporting. Even in IT operations, I must understand the tools that can make my own engine run better. And so you have to spend a lot of time across the entire portfolio of technology.

Sure, the engineers will tell you no one understands technology better than they do. And that’s fine. That’s not an insult to the CIO. But the CIO can take that technology and figure out how to make that technology work to solve a business problem. If you’re not focused on that, you’ll very quickly be put in a box and you’ll never have a seat at the table. It’s critical for the CIO to be a business executive and also be able to run the technology function. The job keeps getting bigger and bigger. But it’s also getting more exciting as a result. I’ve been in this role for 20 years, and I can see another 20 years ahead of me.

28

JOB NUMBER ONE: SECURITYInnovation is a high-level priority for the business, but security is always top of mind. Having joined the company from Symantec and a number of high-tech companies before that, I brought with me a respect for the layered defense-in-depth approach.

From the moment a consumer starts interacting with Western Union, we’re capturing information like mobile device fingerprints, user information, and location data in order to build a profile that will help us to take note of any variations in that profile. That enables us to take a real-time approach to risk assessment on a transaction level.

Internally, we have been focused on operationalizing cyber security, training not only our employees but also all of our contractors on appropriate behaviors, data handling, and technology use. And we have tools that monitor the behavior of the employees and contractors servicing our infrastructure.

We also have a “single pane of glass” in our security operations center that enables us

to monitor all infrastructure and customer interactions so that we can respond e�ectively when something happens. We live in an age where the question is not if, but when, a breach will occur. So when it does, we want to ensure that we can respond quickly and forcefully. We’ve built a great response team and process.

In our rapidly changing regulatory environment, we’ve also invested significantly in our compliance practices. We have more than 2,000 compliance professionals around the globe, but we’ve also created a compliance engine. That platform allows us to do real-time risk assessment on each transaction to make sure, for example, it’s not being initiated or received by a sanctioned individual. The engine can also scour the transaction for evidence of fraud or money laundering. We spent two years building that system, and it will be a long-term competitive advantage for us, keeping the barrier to entry in our cross-border business high.

And, just as importantly, even as we are building all of these protections into our business we’ve also kept the focus on the customer. While we are committed to safe and secure transactions, we’re equally committed to delivering an excellent customer experience.

29

KEEPING UP WITH SILICON VALLEYIn my previous CIO roles at Symantec, Oracle, and PeopleSoft, I typically had a team charged with staying abreast of innovation. I interacted directly with our engineers, whose job was innovation. And working in Silicon Valley, we were surrounded by innovation.

When I joined the financial services sector, I had to make adjustments in order to keep my finger on the pulse of technology change. What I’ve done here is to leverage the strength of our strategic technology partnerships. We have some key partners with innovation engines that we can plug into. They provide us input into what they’re seeing in the marketplace. In addition, Western Union has made an investment in the Bitcoin-focused investment firm Digital Currency Group, which gives us another eye on innovation.

I also have two team members who are focused specifically on true innovation in our customer experience. However, because innovation is so critical for success, I personally spend a lot of time on that aspect. I spend a lot of time working with our CEO and our chief marketing o�cer (who is also our chief strategy and product o�cer) sharing insights into what I’m hearing in the marketplace, what I’m hearing from our partners, and what they’re seeing in this venture capital firm in which we’ve placed some investments.

Here in the Denver area, we’ve also been the beneficiary of some great tech talent as many companies have moved here to escape the expense of the Bay area. The Denver and Boulder areas have become hotbeds for innovation. The governor has stated that 4,000 people move to Colorado every month, and a good portion of those transplants are

technologists. That’s allowed us to tap into a marketplace of relevant skills and new capabilities to drive innovation now and in the future.

• A maxim for incumbent companies in industries facing radical change: Disrupt yourself before you get disrupted.

• Combining operational and technology responsibilities in one position gives the person in such a dual role the ability both to see an entire business process and to apply technology needed to improve it.

• To stay abreast of innovation requires plugging into the innovation engines of technology partners, investing in innovative startups, and keeping tabs on the activity of players both inside and outside your industry.


Nuria Simo


Inter-American Development Bank

Works From:

Washington


As CIO of the largest source of development financing for Latin America and the Caribbean, Nuria Simo is responsible for IT strategy, architecture, application development, infrastructure, risk management, and information security. She has more than 30 years of experience in multiple industries and geographies, particularly with complex organizations undergoing transformational IT processes. She is the former CIO at Campofrío Food Group in Madrid, and she has held CIO positions at such global operations as FrieslandCampina in the Netherlands and EADS in Germany. She has also been an IT executive at Cargill in Spain, the United States, and the United Kingdom.

Education:

Licenciado Superior, Economics and Business Administration, Universitat de Barcelona.

31

Change is never easy, and it’s viewed by many as an even bigger challenge in public sector and intergovernmental organizations. This common perception was highlighted for me when I decided to join the Inter-American Development Bank. I was very excited about the IDB’s vision to improve lives across Latin America and the Caribbean, but most of my friends warned me that I should prepare for a bureaucratic structure and a strong resistance to change.

So I was pleasantly surprised when the plans to push digital capabilities as a vehicle for development received support from my supervisors as well as my team. This is not to imply that there were no challenges, but the pace of change was definitely no slower than in the private sector.

On the contrary, I found some serious advantages in the development sector. For one thing, we are not driven by quarterly results or profit and loss, and that helps us plan for the long term and drive digital transformation smoothly on many levels.

If I’ve learned one lesson at the IDB, it’s this: Whenever you feel that an institution is slow and bureaucratic, always stop to check who is moving slowly—you or the institution?

Innovation at the IDBA new CIO found an intergovernmental organization receptive to the digital transformation needed to further its development mission

32

PROMISE OF CONNECTIONSIn the two years since I joined the IDB, my agenda has been pretty simple: To drive the strategic digitalization of IDB’s processes and operations in order to become a leading source of development finance in Latin America and the Caribbean.

We have faced frequent challenges, like the lack of information, inadequate infrastructure, and complex regulatory systems in the region. Digital platforms have helped us increase collaboration inside and outside the Bank.

Two years back, we noticed that several small and mid-sized companies in our partner countries didn’t have the information and networks required to explore opportunities outside their home markets. Inspired by the great success of social networking platforms in the private sector, as well as our own trade integration and business matchmaking initiatives, we launched ConnectAmericas to help these companies connect to potential

clients and partners throughout the region and around the world. The online ecosystem helps to promote international commerce by providing contacts, industry-specific information, and financing options for Latin American and Caribbean companies looking to expand their markets. The platform also o�ers tari�- and trade-related tips and courses on how to begin exporting products.

BUILDING A SERVICE CULTUREAnother step we’ve taken is to reorganize the IT department around business needs, rather than around technology.

First we created a service-oriented culture in our IT team. We began by digging deeper into understanding the Bank’s business and partners’ needs and then looked for the best ways to implement technology solutions to meet their needs and solve their problems. We also hired people who understand how to use new technology to solve development problems. Then we conducted a series of workshops and training sessions to explicitly tell our partners about our service-oriented and customer-centric culture.

Today we have built a model for providing technology infrastructure and solutions based entirely on the needs of our business departments. Because business sta� members interact directly with our customers, providing them with digital solutions is the best way to ensure that our work stays aligned with our main mission of improving lives in Latin America and the Caribbean.

I often visit the development projects supported by IDB in member countries. That provides a reality check on whether our IT solutions are having an impact and whether we need to adjust and adapt.

33

It’s crucial to track the changing realities of the places we operate, so that we can tweak the model whenever and wherever required. That’s why I often visit the development projects supported by IDB in member countries. When there, I try to spend most of my time in the field. That gives me first-hand insights into these countries’ needs and provides a reality check on whether our IT solutions are having an impact and whether we need to adjust and adapt.

OUR THREE PILLARSTo ensure that our digital innovation is focused on identifying and shaping development opportunities, our digital agenda is focused on three core areas.

1. Improving Efficiency. It’s easy to see that digitalizing all our operations and improving e ciency is IT’s most logical and traditional role. So, we scout for digital technologies that can help us streamline our process and create a tighter customer connection. For instance, we rolled out Convergence, a one-

stop platform to manage all our operations. It integrates more than 10 systems across departments and regions to enable us to track operations in real time, while reducing redundancies and improving operational e ciency.

2. Open Data and Knowledge. A big chunk of our digital transformation e�ort is focused on helping us further our commitment to the open sharing of data and knowledge. We have people with amazing experience in several areas, and we want to make this knowledge available to everyone in the Bank across geographies, as well as to entrepreneurs in partner countries. We believe that the use of data and knowledge we produce can help our clients and partners go through a more intelligent decision-making process.

3. Fostering Digital Capabilities in the

Region. As we proceed with our own digital transformation, we are becoming increasingly knowledgeable about

34

digitalization and new technologies that could benefit our clients in various countries. We might not know everything about every technology, but we try to help them learn from our experiments. That means creating alliances and ecosystems with people outside the bank and even outside the regions where we operate.

And our digital journey has only just begun. We have plans for projects like our Technology Innovation Lab, which is a one-stop shop where people within IDB and from our customers can exchange challenges, ideas, and solutions. It’s too early to point to dramatic results of this project. But I am excited about the pace of change in areas such as machine learning and the Internet of Things and the potential for enhancing the speed and e�ectiveness of sustainable development in Latin America and the Caribbean.

• A key factor in successful digital transformation is the creation of a service-oriented and customer-centric culture in the IT function.

• Developing strong ties with your internal business customers is crucial to understanding the needs of your organization’s external customers.

• In the development arena, the open sharing of data and knowledge helps replicate throughout an entire region successful initiatives that can benefit others.


If I’ve learned one lesson at the IDB, it’s this: Whenever you feel that an institution is slow and bureaucratic, always stop to check who is moving slowly—you or the institution?

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