Marian Lucia Manages Change at The Federal Home Loan Bank of Atlanta
Bank Systems &Technology: How does FHLBank Atlanta differ from the Federal Reserve or commercial banks?
Lucia: Unlike the Federal Reserve Banks, FHLBank Atlanta is a private institution that provides our members with funding and liquidity. And unlike commercial banks, our customers are other deposit-gathering financial institutions rather than retail individuals. In essence we're a bank for banks.
We have about 1,200 members, including savings and loans, insurance companies, credit unions, and commercial banks. A large percentage of our customers are smaller institutions with less than $1 billion in assets, although we do serve large institutions as well.
Bank Systems &Technology: What products and services do you offer?
Lucia: Our main business is to provide advances for our members to offer mortgages to their retail customers. Another critical part of our mission is our affordable housing program. The Federal Home Loan Bank system is the largest contributor of private grant funds for affordable housing in the U.S.; we'll provide more than $40 million in 2007.
Many of our smaller members look to us as a major source of their funding. But larger institutions have other funding options, such as selling their own securities on Wall Street. Therefore we need to be very competitively priced.
Bank Systems &Technology: What's your technology infrastructure?
Lucia: Because our business model is so different from a normal bank, we have a combination of [vendor and in-house] systems. Our IT infrastructure is client/server, and much of what we have is Web-enabled. We are in the process of refreshing those systems and are undertaking a significant reengineering of our administrative and data-collection processes.
Bank Systems &Technology: Do you have a large IT development staff?
Lucia: Our entire IT staff makes up about one-quarter of the bank staff, and we have a relatively small development staff. Our business model is that we have less transaction volume than other financial institutions, but the individual dollar size is large and the transactions are complex. We target resources to areas where we can improve efficiency since our cost per transaction is higher than a normal bank. To keep a lean head count, I complement the staff with deep technology knowledge from the outside.
Bank Systems &Technology: What are some of the technology strategies and initiatives you are leading?
Lucia: We're halfway through an IT transformation. We've already ensured that we have redundancy, good performance and tools, and security and administration controls. We've also been refreshing our Internet platform.
We are currently working a loan platform upgrade. We have a team of folks across the bank defining what our business processes should look like in the future, and we'll then go out and find a solution or several pieces of a solution. Our current system was created back when loans were either fixed or variable rate but not both. Our loans now have a lot of complexity, and we want to deliver new products more quickly than we can with our current system.
Bank Systems &Technology: How is IT organized?
Lucia: I'm part of the executive management team. I report to the CEO [Richard Dorfman]. I manage a centralized IT division consisting of five functional departments. Within our applications area we are organized into teams that support our various business lines. We work closely with those businesses to be fully engaged and responsive to their needs.
Bank Systems &Technology: Can you describe the data governance process?
Lucia: We registered with the Securities and Exchange Commission (SEC) last year, which means that we need to meet tighter timelines and provide absolute precision in our financial reporting. With so many source systems to integrate into our reporting structure we needed an integrated and controlled approach, so we built a data warehouse called SPOT: Single Point of Truth.
We created a data governance working group to understand how various systems transform data and to create a set of automated internal controls to review the data. We then load the data into our two key stores — our operational repository and the financial data warehouse. These automated controls send alerts to the data owners if there are discrepancies or anomalies in the data during the loading process so that we can address source system issues before we produce our financial reports.
Having a well-governed source of information allows us to respond not only to SEC reporting requirements but to other reporting requirements within the bank. We've created management dashboards and have a metadata repository and a data dictionary, so our ability to respond to future reporting needs is strong.
Bank Systems &Technology: How did IT collaborate with the business to achieve this?
Lucia: We had an executive sponsor in our accounting area that was adamant that he needed something that would improve reporting. We also received a lot of input from the business areas. As we put together the data model, people in various parts of the bank discovered that, in some cases, they didn't even have a common language to discuss various pieces of data. We now have a common language and understand our business better.
Bank Systems &Technology: What's your IT budget outlook?
Lucia: Our IT budget has increased as our bank has grown, and I expect it to increase as we complete this IT transformation. We're constantly trying to build systems to support business innovation.
Bank Systems &Technology: What is your management philosophy?
Lucia: Technology keeps moving so quickly, and you want to continue to raise the bar at the same time you maintain a good work environment and avoid burning out your staff. I'm a change agent, but I try to establish controlled change that doesn't disrupt or damage our relationship with the business. Managed change gets the best results.
Ed. Note: Although FHLBank Atlanta has practically no exposure to sub-prime loans, it has seen an increase in demand for liquidity from its member institutions as a result of the current credit turmoil. Other lending institutions, however, are reassessing their strategies in light of the sub-prime crisis.