New CIO Leads the E-Commerce Charge at Bear
What's the new trend on the Street? Plucking a business leader who understands the firm's products and goals, and putting that person in charge of the firm's e-commerce initiative. That's exactly what's happening at Bear Stearns. Peter Cherasia, who spent the last 15 years working at the investment bank's FAST Group-Financial Analysis of Structured Transactions-will now lead the firm's e-commerce strategy by creating a single Web-based platform to unify the technology throughout all the firm's departments. As Bear Stearns has one of the largest correspondent clearing businesses on the Street, the platform will be used to better serve its correspondents and their clients, a true business-to-business initiative. Cherasia has his work cut out for him, as "there is a good deal of bifurcation" throughout the firm's departments, he says, but he is certainly being given the dollars to support the effort. With a lofty $750 million budget, Cherasia is far from complaining.
The goal? To create a common e-commerce platform and optimize how Bear Stearns builds technology, says Cherasia. Bear Stearns is known for its technology development, and while, Cherasia says there isn't a whole lot of duplication in the technology, "there is also no recognition that the divisions have similar business perspectives."
Although Cherasia did not move up the ranks in the investment bank's well known technology department, he gained valuable experience in understanding the most complicated of products as senior managing director at FAST. He notes that FAST is essential to all the products distributed at Bear Stearns, as it handles analysis and quantitative support for all fixed-income dollar and non dollar products. "It began as a place to find solutions for business problems through quantitative math, technology and business analysis-all in one discipline," says Cherasia. He adds, "It very much involved finding the right technology used for quantifying risk and value."
"FAST is also important in helping the traders and brokers market products and compare their value to other products," he says. As FAST developed, it became the centralized knowledge base for the firm, and spread to other divisions such as equities and convertibles. It was the strong relationships that he developed and fostered with the various divisions while at FAST that made him a strong sell for the new role of CIO and Director of e-commerce.
Cherasia plans to apply the same principals of FAST in his role as CIO. He already is familiar with each product group. Now, "the goal is to find a common thread among all the groups and make sure we're not being redundant. We want to use the best-of-breed products, while leveraging capabilities," he explains.
Why one platform? As you can imagine, the benefits are endless. For one, having a common platform for all departments is more efficient from a maintenance standpoint, and will likely lead to cost savings, technologically. Bear also wants its clients to be able to go to one place to obtain information that is consistent and easy to access.
Cross selling also comes into play. However, Cherasia is quick to point out that the last thing the firm wants to do is inundate its clients with information that they don't want. "We want to show a client where capabilities are within the institution, but we don't want to overload them, either. The site will use a combination of push technology and will also allow clients to register their interests," he explains.
The first phase of the project will be rolled out by the end of the year, but it will be constantly redefined and updated. Many of the systems are already connected, such as the trading systems and the clearance systems, but these must be connected to the risk management systems, and others, he notes.
The project will use a mix of third-party technologies and in-house developed systems, but Cherasia would not say which systems the firm would be looking to the vendor world to supply. He adds that Bear Stearns will also use a mix of ISPs/ASPs, including Exodus. And yes, the investment bank will spend a good deal on middleware, but Cherasia would not say how much. He did, however, note that Bear has already spent $100 million of the $750 million on building clearance systems.
He emphasizes that Bear Stearns will be very selective about its spending. "It seems that everyone has a different plan. Merrill's is different from ours, ours is different from Goldman Sachs' ... We want to take a common sense approach. Everyone seems to be spending a lot of money on a lot of things, and are just hoping that it is the right thing. We are going to be very strategic about our selection."
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