TUCON: Diane Schueneman

Next in the morning’s general session was Merrill Lynch‘s Head of Global Infrastructure, Diane Schueneman. She focussed on change and complexity, and how to manage that while maintaining a client focus. Like all the financial institutions that I work with, this comes down to four types of change: disintermediation, competition (especially when there is ambiguity over whether another firm is a competitor or customer), innovation and regulation. This all creates a huge amount of complexity; many companies try to address this by adding more complexity, which leads to client expectations that are rarely met. With more than 9 million transactions processed per day, Merrill Lynch needs to have a better way to handle client expectations, which they’ve done by moving from a product silo focus to a client focus, where the service is organized from the client’s point of view.

She described how they did this:

  • 70% of IT spending on innovation, 30% on maintenance (the industry average is more like the opposite)
  • Straight=through processing, with a goal of 99% of transactions processed without human intervention
  • Application availability 99.95%
  • Global sourcing to reduce costs
  • Focus on getting client satisfaction into the top 3 within the industry
  • Use of e-channels

Schueneman was very complimentary of the Spotfire acquisition announced earlier, since they use predictive analytics heavily within Merrill Lynch and see the value: they can actually predict most fraud before it ever happens based on patterns in the data.

An interesting piece of trivia from Schueneman: during the 3 days following 9/11 when all planes in the US were grounded, not a single cheque was cleared in the country because the paper cheques were all sitting on planes. This resulted in the development new legislation that allowed for electronic scanning and clearing of cheques at the point of origin. Now if only we could clear a US cheque in Canada in less than 30 days.

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