Although the data management challenges faced by New York-based Citi ($1.88 trillion in total assets) are not unique in the industry, the global institution's sheer size magnifies issues such as siloed legacy systems, redundant data and outdated processes. To address the challenges head on, in 2006 Citi Capital Markets and Banking -- which encompasses global banking, global capital markets and transaction services -- named John Bottega (top photo) the industry's first chief data officer. Bottega and Citi COO Ed Watson discuss how they are turning the firm's data into a business asset.
BS&T: Citi's Capital Markets and Banking division was among the first financial institutions to name a chief data officer. Has it become a trend?
Bottega: While Citi was the first in the finance industry to name a CDO, that title is not uncommon in other industries. Focusing on data as an asset is something the financial industry has been talking about for some time. JPMorgan Chase (New York) has named a CDO, and several financial firms considering creating the role have asked me how we went about it. Other firms have created the role of global head of data.
BS&T: What were the business drivers for creating the CDO role?
Watson: We realized that data is an asset and also recognized that many of our downstream challenges were the result of bad data upstream. We felt we could improve risk and control, perform better, and provide better client service by having clean data. Cleaning the data up front helps us strengthen our relationships with our clients and reduce our risk. There is also an efficiency angle to this: We won't have to deploy resources to repair downstream data, and we can improve the way we create data as an organization. In the past we created data in many different pockets, and oftentimes data was redundant or even conflicting.
We see the CDO role as a way to help everyone think differently about data as an asset. We needed a champion who could tell us how we should govern and drive the creation of data. Through our governance structures that John has put in place we realize that we may already have data and don't need to recreate it.
Bottega: I sit on the data standards board across the entire institution. That provides an opportunity for me to dip my toes into the other areas of the business, such as global wealth management and alternative investments, and engage in conversations about data as an asset across the whole firm.
Watson: Something that we do really well at Citi is share information and best practices, whether that's around hiring and retention of talent, or deployment of third-party technology processes. I sit on several boards for Citi. Those boards look at how we can strategically do the most for the entire organization. For example, although I'm responsible for Capital Markets operations, there are pockets of my organization that support Citi Private Bank and Global Wealth Management. There is no reason to have redundant processes, so in some instances we've become a service provider to other parts of the firm.
BS&T: What technology challenges does Citi Markets and Banking face?
Watson: One of our biggest challenges is to decide where to invest technology dollars. You can gear up the technology side by hiring technologists or third-party vendors, but you have to have the internal line expertise to own processes and ensure that the line managers have the proper bandwidth in their operational areas to deploy the technology.
We don't deploy technology on top of existing processes but reengineer the process while overlaying technology. We'll look at the process from scratch, go through a detailed process mapping and then define what the process should look like.
Bottega: Data management as a discipline is not just about technology, but the process around it. Our strategy is to drive data management from a business perspective. In some cases that requires a technology tweak, and in some cases it requires technology reengineering. But it's first driven by process reengineering because it's really a matter of where the data is created, how it is maintained and how it is distributed.
Watson: Another challenge is that we need to tweak the culture that currently exists. Line employees pride themselves on their ability to fix any problem that hits their desk. But the question we need them to ask is, "Why is this problem hitting my desk?" and to look beyond their area of responsibility to permanently fix the problem upstream. As an example, line employees can fix the CUSIP number that is constantly wrong on a type of trade, but the real answer is working with John's organization to get the data right the first time so we never see that problem again.
BS&T: Are you engaging in any widespread replacement of your legacy systems?
Bottega: We're taking a data remediation approach -- where we have an immediate need to clean up data to satisfy regulatory issues, we do that first. Parallel to that effort we are doing a rationalization of the current environment and inventorying all of our data systems. If we identify a system as a prime candidate for decommission we'll start moving the functionality off to more-strategic platforms.
We're taking a pretty aggressive approach to decommissioning some of our older systems. We've got too many of everything, so we're trying to bring the environment down to a manageable number of systems.
BS&T: Do you discuss these data management issues with your peers in other organizations?
Bottega: There is a lot of collaboration across the industry in the data management space. I represent Citi on several industry organizations, such as the Enterprise Data Management Council (EDMC), and we share approaches and strategies because we all realize that at the end of the day we have to provide data to our infrastructure, and the better we do that the better we are all going to be.
BS&T: What will drive growth in your organization in the coming year?
Watson: We've achieved our current size through a combination of acquisition and organic growth. We're experts at acquiring and integrating. [But] Chuck [Prince] has publicly stated that he doesn't see any transforming acquisitions in our major markets; therefore, we are looking at growing organically, which is a bit of a change for us.
BS&T: Is there any hardware or software deployed at Citi that you consider outstanding?
Watson: There are some very good third-party packages available, but there is no magic bullet when you buy something off the shelf. The key to success is having line managers own the process and reengineer it to build in efficiency for better client service and controls. It's how you apply and integrate the technology and reengineer your processes to use that new technology that is critical.