Many of us have heard the old Chinese curse, "May you live in interesting times." That has certainly been the case for bank CIOs this past year. The economic crisis forced all banks to make difficult decisions about priorities, direction and short-term cost containment. However, with most crises comes opportunity, and in the case of this meltdown the oft-used Chinese character for crisis (combining the symbols for both danger and opportunity) was clearly in play, especially for MetLife Bank.
With the overall market conditions impacting even quality organizations, some companies were able to capitalize on developing opportunities in the marketplace through acquisitions, mergers and competitive positioning. In 2008 two acquisitions in particular -- of EverBank Reverse Mortgage and of most of the operations of First Horizon Home Loans -- allowed MetLife Bank to seize upon opportunities even as the superheated mortgage business was cooling and to take advantage of the huge refinance boom starting in late 2008. Consequently, MetLife Bank was well positioned to face a difficult economic environment and experienced tremendous growth, becoming a top player in both the forward and reverse mortgage arenas. The bank now finds itself in a position to take full advantage of future opportunities as the market recovers.
The weakened mortgage market raised the need to rationalize future spending and, in most cases, cut IT spend even at quality banks and mortgage companies. Ironically, this happened at a time when the need for real-time data was more important than ever. As technologists in the banking industry, we need to be focused on streamlining, upgrading and automating more and more of our systems and data. This will allow the mortgage space to better mitigate risk and quickly respond to real-time detailed pricing and hedging.
Better Partnership With the Business
Realizing the importance of both cost containment and meeting the technology needs of the business, MetLife has made great strides in changing its ratio of IT spend to achieve these goals. Our focus has been on increasing spend on value-creating opportunities while minimizing dollars spent on value-sustaining activities. That said, cost containment may not be as draconian as it seems. The financial crisis created an opportunity for us to strengthen an already close partnership with the business. While IT has always had a seat at the table, this past year there was even more demand for IT to utilize its holistic view of the business and recommend areas to focus on in lean times for efficiency and maximum return on any investments.
Additionally, a dialogue has been opened about how technology can aid in streamlining processes that previously may have taken a backseat to larger, more strategic projects. Enhancing imaging/workflow, for instance, is now part of budget discussions. Previously hard-to-justify Web initiatives, particularly e-signatures, now get a closer look for the efficiencies and new demographics that they can deliver. Going forward, methods such as virtual desktops, particularly for the sales force, are rising in priority in order to reduce support costs.
Impact of New Regulations
The most lasting effects of the past year are the new regulations handed down in response to the economic crisis. Regulations came fast and furious in a manner that did not always allow for "end state"-type thinking. As the regulatory changes are bound to continue, the challenge will be to satisfy them in an efficient manner that does not upset any process reengineering enablement initiatives under way. As we plan for the future, we must calculate in these new regulations, as well as attempt to predict and plan for likely future regulations.
So there was no excitement of a new "killer app" or new "boom" in IT spending in the past year. But if crisis equals danger plus opportunity, it seems the danger has passed and new, different opportunities present themselves.