The merger of the wealth management groups of Morgan Stanley and Citigroup to create Morgan Stanley Smith Barney in 2009 created the usual systems conundrum for large bank mergers — how and whether to integrate the platforms and databases that existed at the two companies.
But in this case, the first phase of customer data migration has already taken place without a hitch, and phases two and three are scheduled for May and July.
Over Presidents' Day Weekend, Morgan Stanley brought the first 10 percent of Smith Barney customer accounts over from Citigroup information systems. The 725,000 accounts were fed into a fundamentally new system that will serve the combined Morgan Stanley Smith Barney brokerage operation.
In each of the two bigger switches in May and July, another 45% or 3.2 million accounts will come onto the Morgan Stanley Smith Barney platform.
All told, accounts worth nearly $1 trillion will be online, three years after the joint venture got its start in June 2009.
But this story of this transition is not that much about technology. If you were to ask Tom Gooley, the head of operations, or Moira Kilcoyne, the head of technology for the joint venture what the key to the IT blending was, they'd likely respond: Training. Training. Training.
That's because there was not just a transition of Smith Barney accounts onto a wholly new platform, but Morgan Stanley accounts as well. And, most critically, 16,000 financial advisors from the two firms that had to be ready to pull up accounts and serve customers effectively.
To get ready for the Smith Barney transitions, the technology team for the MSSB joint venture staged eight tests and dress rehearsals.
This allowed the team to see if they could in fact safely transfer the customer data, how that data would interact with the new system and how they should go about cleaning up any problems, like the effect on accounts of corporate actions such as stock splits.
The tests also allowed the company to see if it could handle the onslaught of 7.2 million accounts, once they were in place. "That's something you don't want to leave to chance," says Kilcoyne.
What they found let them redesign the so-called critical path that data would take in moving from one system to another. And told them they had to add a lot more processing capacity to handle the 10,000 processes that would be running simultaneously.
But figuring out that the venture would need to triple the amount of processing power on hand and add 50 percent more operations people to oversee what was going on might be considered the easy part.
Moving over 7,000 Morgan Stanley advisors and 9,000 Smith Barney advisors to the new system would be where the digits hit the wall. Or not.
Either they could work the system and keep their customers, or not.
Development of the new system, replacing separate Morgan Stanley and Smith Barney systems, took the first 18 months of the project. Then, in 2011, the Morgan Stanley advisors were brought onto the new system. This year, it's time for Smith Barney's advisors to get started.
"The whole exercise of training the financial advisors and the client support associates who sit in the branches on a new platform took a lot of effort and energy," says Gooley, the operations chief. "We spent quite a fair amount of time doing that and making sure that had all the appropriate information at their finger tips."
A linchpin to making sure the training was both effective and efficient was … an algorithm.
The operations and technology team had each advisor and each client support person fill out a survey on what they did on a regular basis.
The algorithm would react to the responses in each survey and create a training program based on that person's duties and the business model of that MSSB branch.
For this purpose, Morgan Stanley created, in advance, 163 recorded training sessions totaling 22.5 hours of instructions. Handouts included 322 quick reference cards and change pages that showed how procedures or retrieval of information changed in the new system.
The operations and technology team also sent trainers out into the field, at a ratio of one trainer for each 25 branch staff.
The education was a mix of online recorded sessions and in-branch training. The blended approach allowed advisors to take up to 80 percent of their instruction with an in-branch trainer.
A trainer would show up a month before a conversion, provide instruction and assistance through the changeover … and then stay for a month afterward.
On top of that, training was delivered through as many educational channels as could be conceived, including online, in classrooms, in one-on-one sessions, in group sessions, and in casual lunch-and-learns.
"I think there was a recognition that people learn in different ways, in addition to the fact that they have different needs," said Kilcoyne. "And so we spent a lot of time and energy trying to customize training for people so that people could absorb it in the way people absorb information."
The joint venture also braced itself for an onslaught of questions into their call centers in the wake of the customer data migration.
The joint venture added about 15 percent more support personnel to each of two call centers to handle an expected flood of calls about the seven years of records being switched over, which involved 2 billion documents, 750 million historical transactions and 12 trillion bytes of images of account statements and account opening documents.
"We were expecting just tons and tons and tons of questions into our call centers in these last two weeks," said Kilogoyne. "
"The rate of questions and the nature of questions has been incredibly mild. We just really haven't seen the flood that we had been expecting," said Kilcoyne. "And I think we attribute that to the fact that the trainers are on the ground with people helping them acclimate. So we haven't seen crazy blips in our support calls."