Andrea Klein: Top-ranking International Expert in Financial Services and Vice President,
Financial Services, Oracle Corporation
This week, Stephen Ibaraki, ISP, DFNPA, CNP, has an exclusive
interview with international financial services authority, Andrea Klein.
Andrea Klein is the vice president of financial services
industry strategy and marketing for Oracle Corporation. With recent
announcements of Oracle investments and acquisitions that strongly impact the
financial services industry, she has also become the focal point for those
activities. Prior to joining Oracle, Ms. Klein was the vice president for
financial industry services and solutions at Compaq. She has more than 20 years
of financial industry experience both from her years at Bank of America and her
experience building and running a global industry marketing and professional
Ms. Klein has extensive leadership and strategic experience
in the design, development and implementation of payments and intra-day
liquidity management systems. She has successfully led a team in developing and
delivering a global integrated payment solution, and in the design of an
enterprise wide risk management system.
Due to Ms. Kleinï¿½s internationally acknowledged expertise,
she speaks at numerous financial institution and technology conferences around
the globe. Additionally, she has written articles on intra-day liquidity management and
enterprise wide risk management for international publications.
Introduction: Andrea, thank you taking the time to share your experiences
with our audience.
Q: Can you summarize the challenges stemming from the Basel
II accord that will take effect in 2007?
A: A survey sponsored by Oracle and performed by the
Economist Intelligence Unit indicates that, aside from the cost of adopting
Basel II, which can range from $10 million to $500 million, (depending in part
on the size of the bank and the choices selected), a major obstacle to
implementing Basel II is lack of consistent, standardized data within the
organization. Some institutions have delayed compliance efforts because their
risk and performance data is disorganized, inconsistent or in multiple formats
that cannot easily be aggregated. The significant investment in analytical and
data management capabilities that is required can also be a challenge for many
Q: What would be your recommendations for establishing a
plan and communicating it across the enterprise when using technology assets as
a driver behind a merger and acquisition?
A: Integrating systems post-merger often presents the
biggest challenge to realizing the value of a deal. To navigate M&As
successfully, banks must establish a plan and communicate it across the
enterprise. When evaluating a potential merger, IT plays an essential role. The
acquiring bank must try to assess the cost and profitability of various systems
in the context of features and functions. Performance management and business
intelligence tools enable the acquiring bank to make decisions that are based
on data rather than emotion about which systems survive post-merger. Armed with
cost and profitability data, institutions can then model budgeting, staffing,
payroll and capital costs more accurately. This information also enables a
fact-based assessment of operational approaches, including the ability to
compare in-house and outsourcing or off shoring options.
Q: Provide your studied analysis on Payments becoming part
of enterprise software and how this links to the recent study by the Economist
Intelligence Unit of the Economist Magazine, supporting the global move to
enterprise wide payments processing.
A: Payments represents between 40 percent and 60 percent of
a bankï¿½s revenues. Today, information about the different products and services
that drive revenue around that business remain isolated silos. This makes it
impossible to run payments as a line of business in the bank; impossible to
understand its true cost and profitability. Analyzing end-to-end costs for payments
flows, and then accurately assessing their profitability facilitates running
payments as a business. It also provides information about payments that
reduces risk and cost, and enhances both customer service and products. As
delivery of payments becomes increasingly more of a commoditized service, itï¿½s
the information about them that takes on great value.
Q: This question provides an opportunity to share your
accumulated wisdom. What three significant career events had the greatest
impact on you regarding lessons learned?
A: Working in the international market and successfully
closing the first technology deal there. This gave me an appreciation for the
similarities and differences in regulation and cultural approaches. It also
allowed me to bring my knowledge of those international differences to the
development and strategies I drove in the North American marketplace.
The second significant event relates to creating a payment
start up company that was incubated inside of Tandem and Compaq. While
ultimately this business remained inside of Compaq and became part of the
professional services offerings instead of being spun out into its own stand
alone company, I gained the experience of writing a business plan and
successfully acquiring $8 million of venture capital funding.
Most recently, I have had the opportunity to develop and
begin delivery of a global financial services strategy for Oracle that includes
investments and acquisitions of companies in the financial services vertical
market. This has given me the chance to re-orient Oracleï¿½s approach for our
traditional products and to enhance them with additional industry focused
offerings that will deliver a comprehensive financial services solution
Q: Based on your experience, can you make some predictions?
and success in the financial services market place will increasingly be
driven by understanding how to supply improved and rapid information.
Markets are driven by information. The Internet has connected the world 24
hours a day, 365 days a year. Doing business in this global, always on
world, requires rapid, detailed information delivered to the point where
it is needed to make business critical decisions.
focused products and services will be eliminated in favor of companies
that deliver vertical-specific offerings with staffs that specialize in
the nuances of each vertical market and segment.
services institutions will continue to evolve their businesses along a
line of business rather than product-specific focus, in order to have more
control and visibility into the business and to be able to respond to
market changes more rapidly and dynamically.
Q: What kinds of disruptive innovations are on the horizon?
What are their implications: to business, IT professionals, others?
A: Service Oriented Architectures (SOA) will enable
financial institutions to finally transition their legacy environments to
flexible, customer-centric, inclusive infrastructures. Instead of having to
exclude technology solutions because they donï¿½t fit a component-based services
approach will enable expanded choices. Building a single solution based on
components supplied by multiple vendors facilitates best of breed at the
function rather than product level. These functional components can then be
combined to create a very customized solution without individualized custom
programming. The software business will evolve from product delivery to
component delivery and IT professional expertise on particular functions will
become the norm rather than a small cadre of individuals within companies.
Q: What do you foresee for China
and India; for
A: The business model in China
and India will
continue to evolve from a system of state-owned enterprises to a
private-business model. This will result in a plethora of new businesses with
new products and services. Both countries will utilize delivery models that
rely on the Internet and supply support and ongoing enhancements with low-cost,
Q: Choose any topic of your choosing and provide commentary.
A: Connecting the financial services supply chain to the
logistical supply chain seamlessly will become increasingly important as the
global markets continue to connect and drive business around the clock.
Standards need to be accepted without modification by individual suppliers and
market segments to facilitate true interoperability. Financial institutions
must be prepared to deliver more than just the financial side of the supply chain,
instead delivering complete visibility into the end-to-end process. Applying
the information around the supply chain integration will help to facilitate
improved identification of working capital and reduce the amount of disputes.
The industry has begun the process and the technology is now available to
facilitate the completion.
thank you for taking the time out of your demanding schedule to share your
widely acknowledged wisdom, experiences, and expertise with our audience.