TD Bank’s CIO discusses his approach to transforming the customer experience

When Jeff Henderson started in 1994 as manager of derivative systems for TD Securities, the Internet’s role in banking was still several years away. The advent of mobile devices was even further off. Cloud computing was not yet called cloud computing. And yet the financial institutions’ latest executive vice-president and CIO has just as many emerging technologies as he leads IT strategy today.

Henderson’s appointment follows stints as CTO, CIO of TD Canadian Banking, of CIO TD America’s Most Convenient Bank, CIO of Wholesale Banking, and Chief Auditor for TD Bank Group. Even with that track record, he says he knows the pressure he faces is different than most of his predecessors: it’s less about running traditional IT than transforming the customer experience.

“It’s not about predicting about what the next killer app is going to be. It’s about delivering an infrastructure and an architecture that keeps us agile,” he said. “We haven’t done that in the past as much as we need to going forward.”

Henderson recently sat down for a wide-ranging interview with CanadianCIO about his priorities, the impact of fintech disruptors like Apple Pay, the opportunities in wearables, the Internet of Things and more. This interview has been edited and condensed.

CIO: You’ve worked at the bank for a long time. How does your previous experience moving up through the ranks influence your approach as a CIO? 

Jeff Henderson: Every stage of my career has had different challenges. The bank’s gone through a lot of what I’d call “super growth,” either organically or through acquisitions. Those both present their own challenges. What I like about now is it’s a completely different challenge. It’s a transformative challenge. It’s transformative in that more than ever, we have to work with the business rather than just for the business. There is an acknowledgement within the business that they need to work hand-in-hand with technology, and visa-versa. It’s also more interesting because the business wants to learn. Part of the role we play is one of educating the the business. They want to learn about new technology. They want to understand more about it than ever before. If you go back far enough, data processing was all behind the wall and nobody really cared what went on behind the wall. They just knew that something went in and something came out. Now, the more forward-looking business leaders that we have here really do want to dig deeper and understand new technologies like Hadoop, new technologies like API integration, what they really mean and how they can leverage those technologies to drive differences in their business. They see other companies doing it mostly non-financial companies and they realize there’s nothing stopping us from doing the same.

CIO: We’ve been seeing a lot about the chief digital officer role, and you have a CDO at TD. How do you interact with him, and how do you create a mutually beneficial relationship?

JH: We’ve tried to keep the lines of responsibility as clear as possible. Just like any other business    whether it be a business unit like TD Canada Trust or wealth management, or TD Insurance I’ll have a CIO lined up against each of those business units. Similar to that I have a CIO lined up to the chief digital officer, just to maintain that same level of coverage, that same model of interaction. Then that technology CIO is responsible to deliver the technology assets all the support and all the development for the chief digital officer, just as they would for other business units.

CIO: As you design for all these omni-channel experiences and make information more accessible, there’s also all the corresponding risk that might introduce, from a security or privacy perspective. How do you address that? 

JH: That is absolutely paramount to us. We consider the trust factor between our customers and ourselves as non-negotiable. Meaning, we will never trade off security or take a chance of eroding that trust. Some would suggest that puts us at a disadvantage relative to some other companies that are not as heavily regulated, or who don’t treat trust at the same level. But to us, if we ever lose that relationship with our customers, the value they place in us starts to erode pretty quickly. So, to stay on top of that, it’s back to investing in people. Talent is No. 1. We recruit heavily on a North American and even a global basis for our security group. Our investment in security on a year-over-year basis far outweighs our overall expense growth, that’s just the very nature of the world we live in. We do everything we can to stop on top (of risks) and provide the best from a security perspective. We think we are staying on top of it, but it’s an area that’s going to require further investment across the board, just because of the pace that the environment changes. We speak to the board quite a bit about this it’s a topic they’re quite interested in as well. There’s no shortage of attention. The good news is we have a very good culture and a consistent recognition of how important staying on top of cybersecurity is. While there may be a lot of initiatives in place relative to expense control just because of the economic environment we’re in, they don’t apply equally to areas like cybersecurity. And nor should they.

CIO:  As you try to transform the customer experience externally, how will that change the way you provide technology internally to employees and various members of your workforce? 

JH: We look at it through the lens of, ‘How do we make our employees as productive as possible? How do we unchain them from the desk?” At the same time, how do we shrink the number of devices they need to have to be productive? So there’s a high degree of similarity between omni-channel for the customer and an unassisted view out to our employees as well. We’re doing a lot in that space. You see that in the convergence of collaboration tools, providing new collaboration tools. You also see us rationalizing in that space. You’ve probably heard about this a bit in the press with certain companies decommissioning legacy voice mail. Coca-Cola announced it, J.P. Morgan Chase announced it. In between those two companies announcing it we made the internal decision that corporate staff  not customer-facing staff really don’t need traditional voice mail at their desk, because that just chains them to their desk. The reality is, our employees have mobile devices, and they have voice mail on those mobile devices, so why do we need to maintain and keep current a legacy voice mail platform? There’s another side benefit to that: as much as possible we want people interacting face to face, or through real-time technology, rather than leaving voice mails for each other. There’s a bit of a dependency there we’ve trying to take away, to say, “You probably don’t need voice mail as much if you’re truly collaborating.” It seems odd that in your personal life you’ll be using text and other ways to communicate, and then you get to the office and all of a sudden you’re going to leave a voice mail.
CIO: In terms of customer-facing opportunities, how do you evaluate things like Apple Pay and decide whether to adopt it or create your own options as part of transforming the customer experience? 

JH: We have business people and technology people constantly reviewing the fintech space around the world. That’s not an area where you can say, ‘Well, that’s this person’s job.” It’s not humanly possible for any one person to stay current with it. We rely on a lot of folks internally, and I think it’s a good way, because it helps build that bridge between technology and the business. From an architecture perspective, we’re also investing in architecture that will allow us to seamlessly connect with the fintech solutions. There’s a view that, at one point, the fintechs would be a huge risk to traditional banks. It’s not to say that aren’t some that are a risk to certain areas of banking, but I would say the more common view right now is that survival for both will require partnerships between the two. And for those partnerships to work, we have to have an architecture that will seamlessly connect. We have some examples that we will be rolling out in the next 12 months to our customers. We’ll give you the best of both worlds: we’ll give you what we’re traditionally good at, combined with what these particular fintechs have come up with. They don’t replace what we have done; they’re nice add-ons to what we already do. That’s a great way to deliver it to our customers, so they don’t have to do anything but be automatically plugged into these new capabilities. These are things we can offer faster than what we would have developed ourselves.

CIO: Is that part of the thinking behind TD’s partnership with startups via Communitech in Waterloo?

JH: Yes, Communitech is one of our big forays into building a more innovative culture. We have some resident technology staff there  anywhere from three to five people and rotating co-op students there as well. That core group does innovation on their own, and just being there gives us access to the fintechs. And then we’re also opening up a technology office in Waterloo. Waterloo is a terrific recruiting ground for software engineering and infrastructure engineering talent. Our view is, we need to be there to build our brand and have access to that talent pool. And to give that talent pool the ability to stay local but also be connected to the benefits of working for TD.

CIO:  Besides focusing on mobile, what opportunities to you see in wearable devices like smart watches or even the Internet of Things? 

JH: We have a lot going on in both of those areas. We were the only bank in North America to launch both a banking app and a brokerage app. They’ve both done very well ratings-wise within the Apple app community. At Communitech, we’ve also started to do a lot of interesting pilots with the Internet of Things. We see tremendous opportunity to connect how people will manage their financial life while connected to what were previously thought of as non-financial devices, if you will. So, if a home has a smart thermostat, you could pay your electricity bill through TD, or you could connect it to your savings objectives as you move your thermostat up and down. We want to be ready as all of those things become connected.

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