CXO: Consolidating systems means efficiency and value-add

The global investment management industry faces much complexity and many challenges. In this recurrent CXO Corner relay column, we ask top executives to point the way ahead, sharing their views and best practices for meeting the challenges. 

Journal: You’ve been with Fannie Mae since 2006. Can you take us through your professional journey in the organization and the development of your responsibilities? 

Chryssa Halley: First, I think one of the main reasons why I have been able to reach my current position is that I’m always open for change. To make sure that Fannie Mae is constantly moving in the right direction, we are very much focused on change, and it’s important never to just say “no,” when you are presented with a new idea or challenge.

For my entire career, I’ve been working with the secondary mortgage market, most of the time as a Government-Sponsored Enterprise (GSE) specialist. Before I joined Fannie Mae, I worked at our biggest competitor in this space, Freddie Mac, for almost 15 years. When I joined Fannie Mae in 2006 as a Director in the tax group, it was at a pivotal time for the company. The credit crisis and a major accounting change both had a big impact on Fannie Mae. For those reasons, we went through a big restatement process, and I have spent most of the last 10 years working on a transformation of our accounting system. Three years ago, I became Deputy Controller and, just recently, I have been promoted to Controller and Principal Accounting Officer. 

Journal: Tell us a bit about Fannie Mae – what is the firm’s vision, value proposition, and business model?

Chryssa Halley: Fannies Mae’s vision is to be America’s most valued housing partner, which is a tall order, and our value proposition is to enable affordable loans and rent to the American people. The business model behind this is to function as an aggregator and insurer of mortgages. This in turn

enables American families to buy, rent, and refinance their mortgages and get into the homes they want. We don’t deal directly with the borrowers but with the lenders. But we think about both our customers and our customers’ customers. This also means that when we talk about innovation, we think about the borrowers, the American people, and what they want. We need to make sure that we are continuously able to offer the products they are looking for.

Journal:Have the key competitive differentiators changed since the Global Financial Crisis, e.g., when it comes to the requirements for products and time-to-market?

Chryssa Halley: The credit crisis has meant huge changes to our business. We are transferring an increasing amount of mortgage credit risk to third-party investors. We have strengthened our eligibility and underwriting standards. We have increased day-one certainty for our customers, which gives them freedom from representation and warranties on key loan components for the mortgages they have sold us. This also impacts the borrower experience in the way that it speeds up the process. When we went through the credit crisis, we realized that we had to expand our product line and we needed to increase speed to market.

Journal: How does a company ensure that its systems are ready to meet such a need for new products and a shorter time-to-market?

Chryssa Halley: At Fannie Mae, we were faced with several old legacy systems that were integrated to each other in numerous ways – a complex setup that was slow at reacting to change. We have had to invest heavily in new systems and have simplified our systems landscape fundamentally. To keep the overview during this process, we have had to make corporate roadmaps as well as roadmaps for each of the divisions, thinking through what we needed to tackle first as many of our systems were interdependent. For instance, we wanted to replace some old legacy data warehouses to become more nimble and innovative.

Long-term, change will continue to happen. It is my responsibility to make sure that our systems will also be adaptable in the future. Accounting is integrated with so many other functions, and data has become the big player. If a new product is brought to market, we need to be able to reflect this instantly and correctly in our systems. Overall, finance is switching to more of an advisory role and we need to be able to provide data analytics quickly to the rest of organization to add value.

Journal: What has been the strategy behind simplifying your systems landscape?

Chryssa Halley: In finance, we need to be able to account for any new offering – quickly and correctly. Consolidating our systems has been a key strategy as it would mean that a new product would have to be accounted for in fewer systems, which is a big support to our ability to help the business. We must be able to provide analytics of how new products are performing and be able to forecast the future. The business could potentially miss opportunities if we don’t do that quickly enough.

Journal: Changing the systems landscape must take cross-organizational cooperation to succeed?

Chryssa Halley: Absolutely. At Fannie Mae, we have been able to establish a really strong partnership between the business and finance on the one side and IT on the other side. The business people and accounting people are in the same room as the IT people, and they are all beginning to talk the same language – they talk about sprints, minimum viable products, etc.

This change is a challenge for finance people – we need to be different than we used to be – we need to be able to talk to the technology people. However, we can all see that we get better products, we reduce risk, and can provide faster analytics when we understand each other’s needs. Before, we worked much more in silos and it took longer to realize if we were moving in the wrong direction. Now, we communicate and we work with an agile approach. We are looking at smaller deliverables and looking end-to-end.

Furthermore, the complexity that has come with new regulations, alternative investments, and multi-asset strategies has driven a demand for more transparency and agility. You need to be able to account for all these different types of assets to the regulators in a transparent manner and your system needs to be flexible enough to bring on new assets quickly enough to make your portfolio managers competitive.

Journal: What other changes to do foresee in the future and how would you recommend others to prepare to stay ahead of the competition?

Chryssa Halley: Well, with a future of robotics, big data, and increasing complexity, finance people need to be able to do more than just close the books. We need to be able to turn information into insights and add value to the business that way. As I mentioned earlier, we need to act as advisors for the business and, looking at the big picture, this made us decide to consolidate our systems. This consolidation has enabled us to redeploy 50% of staff to more value-added responsibilities. We are no longer working so much on validations, but focusing on analytics and value-added activities.

When talking to consultants and our peers, system consolidation is also a big theme because it makes so much sense. It makes you much more agile, flexible, and adaptable to change.

I would recommend that firms look at their operating model and how to optimize it. They should also look at their work processes. At Fannie Mae, we are going through a lean deployment, not only when it comes to our systems but also in the way we work. We are changing the way we work by making things more transparent and constantly measuring the results of change. In the beginning people were skeptical but they quickly saw the benefits and results of working in an open office space where you can see what your colleagues are doing. It requires that everybody is empowered to make changes and obliged to make changes when it makes sense. Seeing the immediate results expressed by metrics is highly motivating for all of us.

We have still a long way to go but a strategy of cross-organizational cooperation, lean deployment, and system consolidation is no doubt the right way forward.

About the interviewee

Chryssa Halley is Fannie Mae's Senior Vice President and Controller. She reports to the Executive Vice President and Chief Financial Officer. Halley and her team are responsible for the company’s monthly financial statements and analysis, including the preparation of the company’s 10-Q and 10-K documents, corporate tax, corporate accounting, and independent price verification. Halley leads the effort to ensure the company maintains a timely and accurate monthly close process that is compliant with GAAP and Securities and Exchange Commission (SEC) reporting standards. 

Before joining Fannie Mae in 2006, Halley was a Director of Accounting for the Federal Agricultural Mortgage Corporation. Before that, she worked at Freddie Mac from 1992-2005 where she held a number of positions.

Halley is a certified public accountant, licensed in Maryland. Halley has a bachelor of arts in economics from St. Mary's College of Maryland.