Bankers Trust New York Corp.'s MARY CIRILLO, evp/senior managing director and head of client processing services, leaves Citibank--and a global banking franchise she helped build--for a shot at a banker's bank. FutureBanker: After 20 years with Citibank--most recently as svp and head of operations and technology for global relationship banking--you accepted the position at Bankers Trust New York Corp. What triggered the switch? Cirillo: The opportunity to go there, work with Frank Newman, be on the management committee, and drive these businesses in a meaningful way in the market was just irresistibleojust a great opportunity. So I decided to take it. FB: How will your technology background at Citibank play a role in your new position? Cirillo: These are businesses that have both opportunities because of technology, but also are very threatened because of technology. And everybody wants to be in the payments business these days, including Microsoft. People see an opportunity to disintermediate lots of financial institution activity. Securities is certainly becoming much more automated and much more driven by automated depositories, and the value of information and the time value of information becomes increasingly important. And all that is enhanced by the fact that there's a lot of market data and information that's (being disseminated) out there.
Therefore, how to integrate that information and make it a meaningful package of services for your clients is going to be tricky for those of us who are in the market. But it will be where lots of the value is added. The advent of new technologies and having management that understands the impact of it, both positively and adversely, is going to be very critical to these businesses going forward. So, I think my background (at Citi) plays a very strong role.
The other issue is the global nature of the business. So much of what's happening in the capital marketsowhich is driving the securities side of our business and, as a result, the payment side of our business--is very much the opening up of capital markets around the world. And especially for Bankers Trustoit's got such a strong position as a banker's bank--there's an opportunity to really enhance our offerings in those markets by dealing in a set of services like these, like the client processing services, which make it easier for those markets to be opened and easy for us to help build some of the infrastructure to support them. FB: What other new opportunities will technology create for Bankers Trust's client processing services? Cirillo: I see technologies like the Internet certainly playing a major role in the information delivery, assimilation, and dissemination. Now, things that used to take hours or days to either roll out or become available can become available much more instantaneously. And in an environment where you can just publish, today, most of that is just discretionary information. The opportunity to use distribution vehicles and make the information that comes across them more non-discretionary provides you with a (way) to have a real link to your client without having what we've typically had in electronic banking environmentsoa lot of physical delivery that we've had to support.
The other opportunity is on the servicing side. Increasingly, we're using technology to improve process, process management and the quality of transactional processing. And quality is all about what this business is. You have to deliver not only timely service, but also you have to deliver high quality service to your clients.
And I think that service quality is going to become a differentiator. There are lots of players in the market, but we don't all do what we do with the same level of quality and delivery. That is clearly going to be one of the things that the bank can use technology to help us enhance. FB: What do you hope to achieve in your new role in the next six to 12 months? Cirillo: It'll take us a good six to 12 months to figure out what portfolio of businesses we should be focusing on, how that portfolio of businesses aligns to the clients that we serve and making sure that we then align our resources so that we focus on those lines of business. So the next six to 12 months are going to be a learning experience for me about the way Bankers plays in this market and then to define those things that we think will drive our profitability and our market position in those businesses and make sure that the organization is aligned and focused on getting there. FB: What are your long-term business goals at Bankers Trust? Cirillo: In the long term, I hope to have this (client processing services organization) viewed by the clients of Bankers Trust as a significant portion of the portfolio of product offering that they take from the institution. That this is not an off-to-the-side set of transactional services that we provide, but a very much center of the plate, relationship- building set of activities that we offer to the clients in order to continue to have the opportunity to do some of the more sophisticated things that Bankers provides. FB: How does the acquisition of NationsBank's $133 billion institutional trust business play a role in this? Cirillo: Very positively. I know that there have been some concerns given the changes that had occurred and some of the issues the institution had a few years ago as to whether or not we were seriously in the market. What the NationsBank acquisition says to everyone in the marketplace, including our clients, is that we are very seriously in the market, and we are very aggressive about looking at ways other than just de novo of expanding our business. FB: Has Bankers Trust put the worst of what happened a couple of years ago behind it? Cirillo: I think so. I'm looking at it from an outsider's perspective, but I certainly have been in the industry, having worked in a competing institution. And I would say that they've waded through the worst of that, that there's been a considerable amount of turnaround, that there's certainly different management and attitude that's driving the institution. And with the (bank's) recent acquisition of Alex.Brown in terms of a longer range strategy for the institution as a whole, along with the NationsBank portfolio acquisition for this business, you're seeing a (financial services) company that's much more aggressive in the market, very clearly executing a strategy to make that institution even stronger. FB: What challenges do you see in terms of getting the business where you want it to be? Cirillo: It's hard for me to answer that question at this point. Right now, I'm just coming up a learning curve. But the challenges are the same challengesogeneric challengesothat (face) all the players in the market. One, when you acquire portfolios, getting them gracefully integrated into your own environment. Secondly, making sure that you've got a risk/reward profile in the business that warrants your taking the kinds of increasing risks you're being asked to take, certainly in the securities business across the board and the kind of pricing we get to see in the market. And then finallyoobviouslyojust a cost equation.
Everyone is really concerned about the strategic cost issues in a lot of these businesses in terms of viability and delivery. So my guess would be, although I haven't confirmed it completely, that those will be areas that we'll have to continue to wade through and focus on. FB: In light of the Alex.Brown acquisition, do you think further such deals are in the offing? Cirillo: I can't comment on that, but given just the consolidations that you're seeing across the board in the marketplace, you'd be hard pressed to think about this business without at least considering further acquisitions--or alliances of some kind. FB: Is the bank's client processing services area ripe for growth? Cirillo: It's certainly our intention to continue to make it a more significant part of the P&L of Bankers Trust. And frankly, these are businesses that provide the kinds of earnings that have certainly a different risk profile than trading and sales, for example. And less episodic than, let's say, some of the things that happen in corporate finance.
And so, over time, I'm really hopeful that they're going to provide a solid and more stable earnings stream at lower risk for the company. And that should help the profile of Bankers Trust entirely. FB: Do you anticipate encountering a significant cultural difference between working at Citi and BT, which doesn't even think of itself as a bank? Cirillo: Cultural differences. Obviously, every corporation has a different culture. From what I've seenoat least so far, and again, I haven't spent that much time at Bankers Trustois that there are a lot of similarities (between this institution and Citi). The first is that there are a lot of smart people. It's one of the things I liked about Citicorp. And the culture seems to be one that is similar in that people tend to be pretty up front, very open and pretty comfortable with expressing their opinions.
So to that extent, I don't think the cultural change will be that difficult. Obviously, assimilating into a new corporation, especially coming in at the senior level, you know that's always tricky. --bers tfn.com