Operational Resilience for Financial Services with Rich Cooper

Jeff Kavanaugh: Welcome to the knowledge Institute podcast, where we talk with experts on business trends, deconstruct main ideas and share their insights. I'm Jeff Kavanaugh, Head of the Infosys Knowledge Institute. Today we're here with Richard Cooper, Global Head of Financial Service and the Go-To-Market at Fusion. Rich, thanks for joining us.

Rich Cooper: Thanks, Jeff. It's great to be here.

Jeff Kavanaugh: Rich, before joining Fusion, you founded two different companies. Could you tell us a bit about that?

Rich Cooper: Yeah. They actually took me on this resilience journey that I'm on today. My first company was a company that ultimately was sold to Iron Mountain and it was a vital records store. And what that means is people taking boxes of paper or tapes from their machines in the late 1990s and early 2000s and putting them somewhere on a barcoded shelf. And one of the realizations that through that business was actually the fact that companies were not looking at the bigger picture. They had people, they had locations, they had practical aspects of this. So I really got involved into the business continuity planning world and looking at companies with logistics of where their people would go when something happened.

Jeff Kavanaugh: Well, it's a fascinating backstory, or origin story, because... We're dating ourselves knowing what Iron Mountain was. That those salt caves, where you go down deep in the earth and store these vital records. It made it very tangible, and it went from the physical to the digital or technical and then weaving in the human element. So it seems that you've pulled all these factors together. Could you give us a working definition of operational resilience?

Rich Cooper: Yeah. I'm going to give you a really simple one. And that's the ability to continue delivering on your customer promise no matter what. Financial service firms where I work, they have the services to provide to people. There's an expectation from the general public to deliver those tools and services they need. So, it's really about that culture of competencies coming together.

Jeff Kavanaugh: There are these things you have to do as a company. You've got to put people and money and time against it. And it's almost like, "Well, if you're going to do that, why not get some business benefit from it?" What is it that you do that takes something that people have to do and moves it to where they want to do it, or they're excited about the result from it?

Rich Cooper: There's regulation, but as you said, these firms are doing these things anyway. They're assessing, they're backing up their data, they're having plans, they're complying with audits, they've got security guards on buildings, they've got all of these other things. What Fusion's doing is actually taking all those elements and providing you with those business outcomes. Providing you with all the stuff that you're doing anyway and looking at ways that you can anticipate things that may happen to you and put controls in place to continue delivering that promise that you have to your customers.

Jeff Kavanaugh: You say you're delivering outcomes. And again, forgive me for being direct, let's get real here. You talk about digital technology.

Rich Cooper: This is a platform that uses data that's out there already. We work on products like Work.com for Salesforce, where we're returning people to work in the US at the same time and being able to use data for practical reasons. The data can do so much, but the people have to make those decisions at the end of the day. Are people going to be coming back into New York city? Are people going to do work from home transfers and other parts of the world? And we really use that. That Fusion as a true word of what we try and do again, and the ability of the company to use these data sets.

Jeff Kavanaugh: So they've got the what; the data. You provide the so-what and what-to-do about it, in other words.

Rich Cooper: Yeah.

Jeff Kavanaugh: All right. You mentioned the pandemic. We can't go too deep into the discussion without discussing it. In your mind, how were financial services prepared, or not prepared, for the global pandemic and what's been the fallout? Maybe the response.

Rich Cooper: I think that the pandemic itself was obviously a massive, massive event that people have been dealing with. And on top of that, we think about the last year or so, there's actually been multiple other events, like wildfires in Australia and the West Coast. There's been hurricanes, there's has been civil unrest in areas like Hong Kong and the United States. And we've had these situations where everybody's had to change from a resilience and contingency place to work elsewhere. But it's also brought innovation. You think about financial service firms, the way they interact with their customers now in a digital transformation way. It's just accelerated. Everyone wants to do it. Everyone knew where things were going. Now it's real. Every credit card you get is now contactless. Everything that you do is through your iPhone. People are not going into bricks and mortar locations. So, it's not just the business that I'm working in

Jeff Kavanaugh: Excellent point, the acceleration. Given that, and given that you are working with these household names, these financial institutions, what are the operational challenges that they're facing? Can you share those with us?

Rich Cooper: The operational challenge is, if you talk about the very large multinational global institutions, they are global complex organizations. And so now what they're dealing with is a financial market infrastructure, which is extremely complex, a diverse workforce, where, as I mentioned, that the situations in India at the moment is impacting, is certain parts of their workforce in one way, when they're actually having to deal with the ability to bring people back in the Western world, into metropolitans like New York and London, and trying to ascertain; what did the people want now? There's definitely been a lot more sensitivity, I think, into the work-life balance. And will people come back five days a week? Will it be, everyone in on the 6:00 AM rush hour trains into the metropolitans. That could change so firms are wrestling with that now. Will people fly into one country for a meeting and all cram into a conference room for three days and fly back to their countries?

Rich Cooper: I don't think that's... We're going to have a work a way so... I think there's practical elements. This is part of resilience, is actually the opportunities as well, for firms to understand we are resilient. We have secure ways of people working remotely. We've got secure ways of interacting with our third parties. As well as some of the negatives that obviously things happen with... We're blazing new trails every day in financial service firms.

Jeff Kavanaugh: Can you give an example, a recent example, especially now, as people are coming out of the pandemic in certain countries, exactly how your service helps them address these challenges?

Rich Cooper: Yeah, so If we look at an operating business and we look at, take a part of a business, so... Access to cash, really easy one, that somebody is looking at, and to provide access to cash simply is, might seem, “okay, we’re a bank, you need access to your money.” Well, it's actually not that simple. There's many different ways in which they can do that. There's the physical way of going into a branch and writing a check and someone receiving cash. That needs a physical person in a physical location to do something. There's an ATM network, which many times is out of your control, that needs checks and balances and third party interactions. Our platform helps you understand those business processes, those important business services. And what goes into that? What would happen if we have to close a branch in a region that's experiencing a wildfire or a hurricane, how does that impact society?

Rich Cooper: How can we help them with mobile ATM networks and mobile branching examples, or what would happen if there was a very significant cyber breach that took down an ATM network or a transatlantic pipe that meant people on vacation and the Americans from Europe can't access their cash because there's no way of verifying their things. These are the types of things that our platform tries to anticipate, tries to let people understand and let them work through, through plausible scenario testing. How you would deal with those events. So it's a lot about the people using the facts and trying to build things out.

Jeff Kavanaugh: You're running through war games here in all kinds of scenarios.

Rich Cooper: Absolutely.

Rich Cooper: Every second of every day some of the data's changing because there's things like access controls, who's in a building at some time, who's using a platform, how is the network standing up? But some of the site locations, the actual definition of what your important business services are, there's a lot of static type data as well on top of that. But being able to look at things, and I think the future is going to be much more dynamic. Hence, our partnership with people like Infosys that are really moving data around in firms. We want to see how systems are performing who's in what buildings, how our vendors’ networks are standing up, how different parts of the world are anticipating or experience different situations. So the more data, the better, as long as you can consume it in a logical way. It's a new challenge.

Jeff Kavanaugh: You’ve got a platform, you're plugging into a broader orchestration platform. So as you look backward, you've got the data, you're running these simulations. We'll look forward then. What do you do with it? How do you connect to the execution? The “doing something about that” simulation and operationalizing it.

Rich Cooper: The other part is accountability. And it's about; this is now from the Board of Directors education on this, to let them empower people to make decisions and to do things, because at time of interruption, we need people that are empowered to make decisions. That there's training in place so those war games, if you use that analogy of the military, it's about executing to a plan. Now the plan, as they say, once the first shot is fired, the plan goes out the window, but the ability to make those decisions and be able to go out and understand that this is a pandemic or a cyber attack; that's an event. It's the impact that it's having on you and where it's having that impact on you or the other critical things to focus on. And how are we going to deal with that impact.

Rich Cooper: Having people that are all authorized and signed up. There's concepts and the UK regulations, again, I'm using those as… called the FN 24, which is the role and responsibility for someone that essentially owns the operations of the organization and is responsible for that. Often a COO and the CIO type people, but they have to delegate. They have to understand that there's some preparedness that goes into this. Hence, the fact that we have risk registers that are reviewed by boards. We have business continuity plans that look at major scenarios of denial of access to our people, our third parties, our physical locations. And these are all key components pre-event, but you can never anticipate everything, so being able to get real time data is the other piece that we provide, because sitting and trying to read a plan at a time of disaster has proven, didn't work.

Rich Cooper: And that was one of the flaws of the pandemic. This was a global situation that took different people at different times while China was first experiencing the pandemic. That was a supply chain issue, is a resource issue to the Western world. And then when the Western world started taking people and having to send their own people home from the domestic markets that became much more of a HR logistical issue. How do we keep bank branches open? How do we staff some of our functions that have to be done in a very secure environment?

Jeff Kavanaugh: It's interesting you mentioned these different dimensions of risk. I remember, a long time ago, the very first risk management assignment or project that I executed, my team did. Thought, well, there's just one or two areas. Ended up being 49 different areas of risk that we came up with that we were actually assessing and auditing. And of course that was back in the day. How do you keep track and identify all these different parts of a business? And then how do you communicate to these people on the risk register or the governance? How do you keep track of all these and how do youj communicate the results?

Rich Cooper: We actually talk about that as our North Star, as an organization, we have a belief that everything we're doing today is part of about risk management posture. The security guard, when you go into a building, the guy patching a server at night, the legal contracts that we write with our vendors. So being able to take everything and the alignment to these important business services does start with all of that. What goes into your important business service to get that person access to cash, as the example I'd used earlier. And understanding what goes into that and where the ownership is, and the vulnerabilities of a physical site location for someone walking in has different risk attributes than going out to a third party ATM network. So being able to understand and break those things down is complex but the data is there. The understanding of the specialists within our ATM network, they understand what we've got into that partnership with the people that own branch facilities, security, vulnerabilities, the insurance companies that know if that's going to flood, if it's what the neighborhood’s like. These things are all doable.

Rich Cooper: And that's where we've been very disruptive in the market, because we brought an enterprise platform to bring this data together. So the facilities expert can look at the facilities data. The technologists can look at the network information and the business executive can look and say, "Okay, I've got these moving pieces and we've got one way, we've got the other." And we can see what the impact is to the customer base through some logic that's applied on top of that.

Jeff Kavanaugh: Well, as we talk here today, the favorite three letter acronym, I think that's emerging is ESG. The environmental, social and governance. How does operational resilience and Fusion’s work play into the ESG imperative that many financial institutions are now taking lead roles in?

Rich Cooper: It's a very important part of it. Think back to like the BP oil spill, the Volkswagen emissions scandals. That hits your business. That's business resilience. That's hitting you. If you're making poor decisions, if you're making poor partner decisions with your organizations, these things tend to come back and bite organizations. So understanding that your ecosystem, understanding areas that you're working in that might not be as correct with the ESG at the moment, it's a big part of it. Being able to understand that we are passive. We don't want a flooded planet. It's not good for business. If you're a bank that's in the eastern seaboard of America and different things, that these are real risk exposures that are very important. It's common sense that these things become important for me.

Jeff Kavanaugh: Looking forward, what's your vision for operation and resilience in financial services?

Rich Cooper: I think it's going to be the breaking down of these silos. As you said, within risk there was 49 different areas that you came across and within an organization there are thousands and thousands of people dealing with trying to safely deliver to a customer. So breaking down these traditional reporting lines, where you've got chief risk officers on one side, chief technology officers on the other side, operating executives. Getting them to all work together to look at this and say, "These are the obligations of what we want to provide to society." And being able to then transfer that into the positive risk and the negative risk, and being able to then mitigate things through anticipation and trying to stop the bad things happening before they impact you. And because there are lots of things you can... You can look at Data sets, you can look at weather coming at you, for example, is a very common example that we're using all the time.

Rich Cooper: You see a hurricane coming, you can start preparing for that. You start seeing you’re on an earthquake fault line, you can prepare for that. There are things that you can anticipate and prepare for, but it takes the organization. It's not something that's just the risk manager's job or the IT department's job. It's about the firm. And now some of these new regulations and the wake-up that I think we've had over 2020 through the multiple events with the pandemic being the biggest one, is this takes a village. This is about HR departments, facilities departments, security departments, as well as traditional practices to make firms more resilient.

Rich Cooper: There's a lot on the Fusion website. We do a lot of thought leadership. Information about just educating people, because quite frankly, we are being disrupted. Going to Fusion R M dot com is probably the best place. I'm also very accessible. If people want to speak to me, my email address is RCooper@FusionRM.com. And you find me on LinkedIn as well. I'm not going to be too hard to find under Richard Cooper.

Jeff Kavanaugh: And everyone, you can find details for everything that Rich talked about on our show notes and transcripts at Infosys.com/IKI in our podcast section. Rich, thank you so much for your time. Very thought provoking discussion.

Rich Cooper: Thanks a lot, Jeff.

Jeff Kavanaugh: Everyone, you've been listening to the Knowledge Institute where we talk with experts on business trends, deconstruct main ideas, and share their insights. Thanks to our producers, Catherine Burdette, Christine Calhoun, and Dylan Cosper. And until next time, keep learning and keep sharing.