From saviour to separation: an interview with the Financial Conduct Authority's CIO Gareth Lewis
Lewis tells Sooraj Shah how he was drafted into the FSA's 'rescue mission', before overseeing the organisation being split into the FCA and PRA
Gareth Lewis was named CIO of the then Financial Services Authority (FSA) back in November 2009, on what he called a "rescue mission", in which he aimed to lead a wholesale restructuring of the division in the wake of the financial crisis.
"I was parachuted in [from his role as group CIO at Centrica] post-financial crisis to sort the place out," he told Computing.
Just seven months later, Chancellor of the Exchequer George Osborne gave his Mansion House speech in which he revealed that the government would split the FSA into two: the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA) to enable more effective oversight.
Lewis, who had previously served as CIO at Virgin Group for six years, was then named CIO of the FCA, which is responsible for the conduct supervision of all regulated financial firms, and the prudential supervision of those not supervised by the PRA.
He explained that the PRA - which is a subsidiary of the Bank of England - had to focus on ensuring that the systemically important firms were financially viable and stable. The FCA, meanwhile, has a broader remit, having to plan for everything that hits the media.
"So the Libor [scandal], HSBC money laundering and any form of financial crime, for example. [We have to regulate everything] from the big guys to the independent financial adviser you may find at the end of your road, the scale is very big, and we continue to grow in scale and complexity," Lewis said.
But prior to Lewis being able to concentrate on the FCA's growth, he was involved in a major project alongside Fujitsu, to manage the split of the FSA into the PRA and the FCA.
Fujitsu had been working with the FSA since 2007, providing infrastructure, service management, procurement and project services, and was therefore an automatic choice to help with the Legal Cut Over (LCO) programme.
"They are a main supplier to us, they provided a lot of the restructuring of infrastructure at our end and they also helped with the movement of data out of the organisation into the PRA," Lewis explained.
The project had a fixed target date of April 1 2013 that was set by parliament, comprised more than 100 sub-projects, and migrated a total of 1,300 users to the PRA over a period of three months.
Fujitsu's role in the project included re-branding FSA email and IT systems; managing the IT components of the relocation of 900 FSA users to a new building over a three-month period; and putting infrastructure in place so that PRA users could access four shared services hosted at the FCA.
Lewis explained that the first phase of the programme involved resolving organisational structure, and the second phase was to shift or duplicate IT systems to the PRA.
"We duplicated 13 systems that we had at the FSA into the PRA, and then we moved 12 systems that were no longer required at the FSA over to the PRA," he said.
The former Virgin Group CIO said that the shared services FCA provided the PRA with were from the FSA's bespoke core platforms: the FSA register, which is the register of everything that the FSA regulated; GABRIEL, which is the system that firms input their financial returns into; and TARDIS, its internal firm database. The fourth shared service is a customised version of IBM's Cognos business intelligence platform, which provides dashboards on capital and liquidity.
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From saviour to separation: an interview with the Financial Conduct Authority's CIO Gareth Lewis
Lewis tells Sooraj Shah how he was drafted into the FSA's 'rescue mission', before overseeing the organisation being split into the FCA and PRA
Overall, Lewis was extremely pleased with the transition.
"Everyone was surprised at how well the whole thing went. These things are very complicated because you have to move groups of data to the people who need it. So aside from moving the systems we had to move a lot of their personal data, such as those on HR and payroll systems, and email and documents, so it had to be meticulously planned," he said.
And Fujitsu was not the only partner involved in the transition. Lewis said that up to 10 other firms were involved, but highlighted Fujitsu, Steria and Capgemini as the main three.
"Steria have been maintaining a lot of the platforms, while Capgemini maintains the key platform which is Gabriel. So between Fujitsu, Steria and Capgemini there was strong interworking, as well as working with our own teams in the bank, and at the FSA - it was a true team effort," he said.
Concentrating on growth
The FCA could soon regulate another 35,000 firms which are currently regulated by the Office of Fair Trading (OFT), and while it continues to grow, Lewis believes that there is scope for his team to exploit big data.
"The most exciting thing is with our market platform called ZEN, which collects information on every equity and derivative trade in the market, which amounts to some 15 million transactions a day, and looks for market abuse such as insider trading," he said.
The ZEN database collects and holds transaction reports that reflect the daily financial instrument transactions undertaken by firms and reported to the FCA. It has recently upgraded its technology to improve the detection of market abuse.
"In the latest upgrade of the platform, we are now manipulating 90 billion data items on memory and are able to identify about 30 forms of market abuse in seconds," Lewis explained.
The FCA then collates any abuse with other evidence from a variety of different sources, and when it believes it has a sufficiently robust case, it prosecutes.
In the future, Lewis hopes that the FCA can map unstructured data sources into the platform.
Big data analytics as a whole is an area in which the organisation has made a significant investment, he said.
As for mobile technology, the FCA's main focus is on how major institutions are using apps to revolutionise their business models.
"[We're] asking whether there is any consumer detriment, and whether the banks are opening themselves up to larger scale risks because [mobile] is not as secure as normal [desktop] banking solutions," Lewis said.
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From saviour to separation: an interview with the Financial Conduct Authority's CIO Gareth Lewis
Lewis tells Sooraj Shah how he was drafted into the FSA's 'rescue mission', before overseeing the organisation being split into the FCA and PRA
Embracing the cloud (with caution)
Many of the FCA's solutions are cloud-based, including an evidence management solution from Autonomy. While it is also replacing a number of core platforms with Salesforce.com, Lewis emphasised that highly sensitive data will not be held in the cloud.
"It will not be kept in Salesforce, it will be kept in UK data centres and it will be part of a presentation layer for the user, but we won't allow it to sit in US data centres. There is a degree of nervousness [after the Snowden-NSA leaks], and even if Salesforce has a data centre in the UK, the US Patriot Act could allow US enforcement to access the data," Lewis said.
Lewis added that it was a risk that the FCA "is not prepared to take right now", but suggested that banks do not seek clarification on where the data will be held.
"I think they trust us with their data, we haven't lost any data yet and as you can imagine we've got a lot of sensitive market-changing information on each organisation, so we're very careful about security," he explained.
Lewis was reluctant to reveal the security measures the organisation has in place, just stating that it has "a lot" of measures, much of which is invisible to its users.
The FCA is spending a substantial amount of its 2013-14 budget on IT (£76.4m or 17 per cent of its overall budget), with a further £44m allocated for "depreciation". The FCA said that just over 30 per cent of its depreciation allocation relates to its three most important IT systems, which enable data collection, online authorisations and market transaction monitoring.
After ensuring that the FSA got through the financial crisis, and then its separation, Lewis hopes that he can now focus on keeping up with the FCA's growth.