John Saffrett of brokers Newedge on agility in the financial services sector

Some IT leaders are only concerned­ with keeping their organisations’ IT machines ticking over. It’s a critical role, but John Saffrett, European CIO and global head of corporate services IT of Newedge isn’t one of those.

Some IT leaders have brought business awareness with them from non-IT backgrounds. Saffrett isn’t one of those either.

He is an example of a CIO who has gone through the ranks in the server room and then re-invented himself into a business leader, much in the same way the organisation he works for has undergone a transformation within the financial services sector.

Newedgewas formed from the brokerage arms of Société Générale (SocGen) and Crédit Agricole in 2008 and echoes a global trend in the need for banks to clean house and streamline themselves back to core banking activities.

Newedge acts as a conduit for its clients’­ investments and holds no capital of its own. It has 3000 employees based in its London, Chicago, Paris and Hong Kong hubs, as well as points of presence in around 40 countries. It is a member of over 70 different exchanges. The global IT team numbers around 450 people.

Saffrett notes that the business the company operates in is a rapidly changing envir­onment and it is under intense regulatory pressure.
“We’ve got to have agility built into the platforms. We don’t take on huge lumpy projects,” he explains.

From the IT department’s point of view, the biggest task has been integrating the two companys’ IT infrastructures and streamlining the core platforms, so that there is a consistent view for the business across its globally distributed network of offices and hubs.

London, New York and Chicago are the two biggest hubs in the network, with London being the minor partner while still supporting activities across Europe. It has the largest IT presence in Europe with 80 London staff, supported by a further 40 in Paris.

Saffrett is the IT lead for the businesses in Europe, but he also has responsibilities for finance, risk, legal compliance and HR. He is also a virtual CIO for one of the business lines that runs right across the company – prime brokerage. So far, a number of IT systems have been integrated, including a risk monitoring programme, HR systems, core initiatives around trade processing, especially automated or Straight-Through Processing (STP). These point solutions have all been supported by a new transport backbone.

Even if the company wasn’t undergoing a merger integration process, Saffrett points out that it would still be forced to invest in a good deal of IT upgrade by the changes in the regulatory regime.

First there is an increasing regulatory ­focus in off-exchange activities and over-the-counter trades. Then there is the increased regulatory scrutiny in balance sheet reporting and ­liquidity. Finally, there are new regulations around the activities of senior managers (Senior Management Arrangements, Systems and Controls, or SYSC) from the FSA which also have to be complied with.

“These are all causing most companies to revisit their operational models to meet compliance obligations,” says Saffrett.

Alongside the IT programmes that have arisen from the merger and increased regul­atory activity, Saffrett is involved in encouraging some culture change among his employees that runs alongside cultural changes being fostered on the financial services industry as a whole as a result of the credit crunch. They focus on quality control and a sense of responsibility.

As part of a company-wide programme, Saffrett has been rolling out a set of core values and core behaviours that he wants his team to adopt. These are intended to embed an understanding of what a compliance culture means and encourage ­employees to adopt them in their day-to-day activities.

This focus on a specific corporate culture tests Saffrett as a change manager and goes some way towards defining the quality bar that employees within his team have to reach.

“It’s been a demanding period for the team. It’s always been a demanding environment. We quickly know whether people are going to thrive here,” he says.

“Overall, the IT department is respected magnificently, but we continue to have a real focus on talent development. We are a very flat organisation. People can come in and will expand their roles quickly if they have the right talent. Our role as leaders is to support that.”

According to Saffrett, Newedge is a fast-moving, vibrant environment that asks much of its people to keep pace with the changes in its market, yet maintains a fluid management culture and an eye for internal advancement.

It’s this environment that has undoubtedly set the tone for Saffrett’s own career and shaped his attitudes to what he needs to do to progress as a business leader.

After studying computer science at university, he got his first job with a company that sold vehicle finance solutions to car dealerships.

This progressed to going out into the field in an after-sales service capacity to teach car salesmen how to sell car ­finance to customers and increase their profit­ability on each sale. This involved teaching people on how to use technology to sell.

By 2000, he had moved into development and was involved in creating an internet-based vehicle finance quote tool.

Saffrett continued to work in a number of companies within the niche of supplying IT systems for vehicle financing operations when in 2002 the company he was working for, ALD Automotive, was acquired by SocGen.

He continued to develop web-based ­applications for clients to support fleet management over the internet, until SocGen acquired Hertz’s European leasing business and he was involved in integrating its systems with the bank’s backbone.

From there he became FIMAT’s (SocGen’s brokerage subsidiary) deputy CIO in charge of business continuity, moving up to the role of the new joint venture ­Newedge’s European CIO in 2009.

Saffrett moved into the European CIO position internally having formerly held the deputy’s role. His predecessor is still his boss after himself moving into the role of global CIO.

This relationship may suffer from the lack of distance, but Saffrett­ is comfortable with the arrangement.­ The two have ­already formed a productive working relationship that continues to serve them even though they’ve both moved up a notch in the corporate hierarchy.

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