by Peter High, published on Forbes
Few industries were hit as hard as financial services companies were during the economic crisis of 2008. Ally Financial was reborn during this period, having once been General Motors Acceptance Corporation, better known as GMAC. The company rebranded in 2010, and continued its historical focus on auto financing, but also reinvented itself as an online bank.
Michael Baresich joined the company as CIO in 2012, having been an IT executive at a variety of major financial services companies. At that time, the focus was still on cost cutting, as the its major shareholder at that time was the U.S. Treasury. He was also keenly aware that the company needed to prepare for growth, and he was one of several executives who helped with the company’s push into digital business. Even with the cost cutting imperative, he hired many web and mobile developers to ensure that the company was positioned for growth. As a result, Ally Financial is considered one of the digital disruptors in the financial services space.
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Peter High: I thought we would begin with your company, Ally Financial. For those who might not be familiar with it, could you describe Ally Financial’s business?
Michael Baresich: Ally Financial might be best known via our bank subsidiary, Ally Bank. Ally Financial is a financial holding company that had its roots in GMAC, but has been a standalone company since 2006. We like to think of ourselves as having two killer apps. One is the auto finance business, where we are the largest dealer supported auto finance company in the United States. The other killer app is Ally Bank, which has won best online bank from Money Magazine five years running.
High: When you joined the company, like so many other financial institutions, it was a trying time. The organization was roughly 70 percent owned by the government. Could you talk a bit about IT’s role in getting the company back on a healthy footing without government assistance?
Baresich: From an IT perspective, we had two main goals. One was structural, and the other was financial/economic. With respect to the structural goal, from the business side there was a high degree of alignment and congruence between ourselves and our major shareholder – the U.S. Treasury. They wanted us to become independent, and we wanted to become independent of that ownership structure. The business had a clear focus on the need to restructure the company, sell certain assets, and restructure others. But, I would not say that the IT underpinnings of the company were top of mind.
As we began to think about selling off certain business units or separating from another, there were pretty profound IT implications that I discovered in the first couple weeks of my job in early 2012. Notably, most of the in-house managed IT assets – datacenters, and the expertise to run them – were part of business units that we were about to be separated from.