july/august 2012 institutionalinvestor.com

The 2008 meltdown, its reg-The
Tech50This year’s top executives infinancial technology standout for translating innovation
into a competitive advantage.

ulatory aftermath and residual
shocks like the European debt
crisis continue to constrain bankprofits and capital market activity and cast a pall of austerity
over many financial institutions.
Yet excitement and optimism
reign among the developers andmanagers of the technologies on
which firms and markets increasingly depend.
This enthusiasm is a common
thread running through theTech50, Institutional Investor’s annual
ranking of those who lead the financial services industry in technological achievement and innovation.
Far from being oblivious to prevailing economic and competitive realities, these executives bear witness
to them. Having risen in stature andinfluence well beyond where they
were a generation or even a decadeago, they have a firm grasp of thosechallenges and bring to bear tools,
resources and expertise critical to
overcoming them.
“Technology isn’t just about
automation and efficiency,” asserts
Goldman Sachs Group chief
information officer Steven Scopellite, No. 10 on the list. “We see it as
a business enabler, an accelerator,
a control point — a source of competitive advantage.”
Adds Phupinder Gill (No. 16),
CEO of CME Group: “Technology

has been the great differentiator forus. Now we are a technology-basedcompany.”
Indeed, financial technology has come of age not only
as a way to move manual tasks
onto machines but also as anengine of profitability. Exchange
operators CME, NYSE Euronext(Dominique Cerutti, No. 6),
Nasdaq OMX Group (RobertGreifeld, No. 20) and LondonStock Exchange Group (AntoineShagoury, No. 37) all make money
selling technology to other markets and are investing in growth
opportunities, particularly inderivatives and clearing.Thosethriving businesses sustain theNo. 3 ranking of Intercontinental­
Exchange CEO Jeffrey Sprecher,
who says proprietary technology
is essential to ICE’s ability “tomaintain a healthy pace of productdevelopment.”
Major banks are not skimping
on technology. In 2011, Goldman’s communications andtechnology spending increased 9percent, to $828 million. At Bankof America Corp. (CatherineBessant, No. 5), data-­processing
and communications expenses
grew 6 percent last year, to$4.2 billion. JPMorgan Chase &Co.’s technology, communications
and equipment total also rose 6percent, to $4.95 billion.

COVER STORY

22Gaurav Suri

Head of Information
Technology and Software
Development
D.E. Shaw Group(PNR)

When budgets are tight,
the typical mandate is to “domore with less.” But thanks toperformance gains — whether
because of faster chips,
programming advances likecomplex-event processing
or cloud computing utilities— technologists have more
to work with. JP­Morgan’s
Guy Chia­rello points out thatcore technology costs are nogreater than they were before
the bank’s acquisitions offailed Bear Stearns Cos. andWashington Mutual. Over
three years JPMorgan has beenable to shift $1.5 billion from“running the bank” to investingin product development and“new value for our customers,”
says Chiarello. “That’s competitive advantage,” he adds.
The top two on the Tech
50,Thomas Secunda andStephen Scullen III, respectively represent privately

It may be all too obvious that, at a quantitative hedge fund firm with the renownof D.E. Shaw Group, “we believe ourtechnology is our edge,” as Gaurav Suriputs it. Less remarked upon, or visible tooutsiders, is how far ahead of the curve
the firm founded in 1988 by computerscientist David Shaw has been. “Today
everybody talks about the cloud and bigdata,” notes the 41-year-old Suri, headof information technology and softwaredevelopment since 2011. “We’ve beenusing a cloud internally for many years.
Our goal is to provide a platform that isas large and scalable as possible.”Threeyears ago Suri and his team constructeda database from the ground up to holdquantities of information “so humongous that traditional, relational data-

held Bloomberg and Fidelity
Investments, which do notdisclose expenditures.They
clearly play in the elite financial tech league and set standards to which others aspire.

“Technologyisa source ofcompetitiveadvantage.”— Steven Scopellite,
Goldman Sachs Group

When Bloomberg could
not buy technology that met its
specifications for data throughput and speed, the firm invented
it. “We have unique problems,and only a few know how tosolve them, so we often build
our own technology,” explainsbases can’t handle it.” Overseeing 400
technologists — more than one third of
the firm’s 1,100 total employees — Suri
developed a platform that can deliver a“single version of the truth,” ensuring aunified, consistent view of all investment
positions across D.E. Shaw, which has$19.5 billion in assets. His most recent
project: exception-driven processing,which automates most investment functions and frees staff to focus on the mostcritical analytical issues.With an MS incomputer science from the Universityof Illinois, Suri worked at Bell Laboratories before joining D.E. Shaw in 1996
to develop trading systems. He splits histime between its NewYork headquarters
and a 600-strong research and technology office in Hyderabad, India.

Secunda, global head of financial products and services.
Bloomberg’s 3,000 programmers, he says, “aren’t there to
support the existing system.
They are there to dynamicallyand aggressively add new functions to our system so that we
can continue to maintain thevalue.” Secunda stresses that
Bloomberg has a basic missionof serving customers, “and technology is a major part of that.”Scullen says it is muchthe same at Fidelity, where“we view technology as aninvestment, as opposed to anexpense” and decisions comedown to whether it adds value
for the customer.
The giants have no exclusivity on focus and relentlessness.
Secunda oversees 6,000people, Scullen 12,000 and
BofA’s Bessant 100,000-plus,
but Lance Uggla of Markit
Group takes aim at Bloomberg

and other data providers
with 2,600;Tyler Moeller ofBroadway Technology builds
high-­performance, multiasset
trading systems with 60; andTyler Kim retooled asset servicer MaplesFS and enabled a
new line of bespoke outsourcing and reporting services witha team of fewer than 40.
TheTech 50 ranking wascompiled by editors and staff ofInstitutional Investor, with nominations and input from industry
participants and experts. Four
primary sets of attributes were
evaluated: achievements andcontributions over the course ofa career; scope and complexityof responsibilities; influence andleadership inside and outside
one’s organization; and puretechnological innovation. Of
the 50 entries, 30 return fromlast year, with their 2011 ranks
shown.The rest are designated“PNR” (previously not ranked).

Disclaimer: The attached document is provided for your information only and does not constitute investment advice or convey
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as to their accuracy or adequacy. Please note also the date of the document as the information contained in it has not been
updated for any information that may have changed.
Past performance should not be considered indicative of future performance. No assurances can be given that any aims, assumptions, expectations, and/or goals described in the document will be realized or that the activities described in the document did or will continue at all or in the same manner as they were conducted during the period covered by the document.
Please visit www.deshaw.com for current and additional information about the D. E. Shaw group.
Reprinted from the July/August 2012 issue of Institutional Investor Magazine. Copyright 2012 by Institutional Investor Magazine. All rights reserved.
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