CFO Studio Magazine with Robert Falzon, CFO, Prudential

analytics, is a “force multiplier for us.” He ticks off three main uses: to uncover fraud, to inform policy making, and to “make sure we know what’s going on in the industry.” The industry includes the 28,000 or so key participants in the securities world. Data analytics boosts the SEC’s investigative capabilities, helping in an insider trading case “to figure out who called whomwhen, and to follow the chain of who might have tipped whomever off. That used to take weeks and it was a manual staff effort,” says Johnson. Like many agencies — and indeed many companies — the SEC tried to engineer case-by-case technology solutions to meet its needs over the years. Today, big-picture thinking is more the norm. The agency has been putting in place common platforms for many of the two dozen divisions and offices. “Those systems can talk to each other much more easily, so it makes us much less stovepiped,” he says. What Johnson calls his biggest challenge, however, is not tamable: the fact that the agency goes “two, three, four months into the year before we know howmuch money is available to support our operations. That is a very difficult thing to manage around,” he says. He enjoys working with Congress and answering legislators’ questions on budget priorities. Part of what he likes about his job is that it exercises both “the liberal arts and the numbers side” of his brain. “You need to understand numbers deeply, but you also need to be able to make cogent arguments... You need to be able to lead in poetry and in prose, work collaboratively with people across a lot of different topic areas. I really like that variety,” he says. And when he finds a problem and can do something about it, “I feel like I can make a difference, and that’s pretty cool,” Johnson says. Two current initiatives include improving the systems for the enforcement and examination programs and redesigning the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system for automatic forms submission. Another item the SEC has tackled involves rulemaking to implement financial and securities-related legislation. The agency’s goal is to think more holistically about how a given rule might affect the various participants in the markets. More so than in the past, “we have our economists at the ground floor of a rulemaking,” he says, “at the stage when we’re just thinking through the ideas of how to proceed.” With this change, the likelier result is “policies that make economic sense as well as meeting whatever other objectives we have in mind.” He adds, “Certainly investing in data, and in better tools to analyze that data, help [with that goal], but that story is much more than just a technology story.” And Johnson is surely smiling. Writing economically sound rules helps maintain fair markets and thus enhances the SEC’s position as a servant of the people. Getting the resources to focus on these areas became possible because the SEC had demonstrated it had the necessary controls in place to successfully manage its resources. C Q In the event of a data breach, which department in your organization is primarily responsible for assuring compliance with all applicable federal, state, or local privacy laws, including breach notification laws? u General Counsel................................................................... 24% u Information Technology........................................................ 23% u Chief Information Security Officer/Chief Privacy Officer........ 17% u Risk Management/Insurance. ............................................... 14% u Compliance. ......................................................................... 11% u Other.................................................................................... 11% Q2 2017 WWW.CFOSTUDIO.COM 13 “You need to understand numbers deeply, but you also need to be able to make cogent arguments... You need to be able to lead in poetry and in prose, work collaboratively with people across a lot of different topic areas. I really like that variety.” — Ken Johnson, CFO, SEC SOURCE: Zurich North America and Advisen survey to which 345 risk managers, insurance buyers, and other risk professionals responded. Many industries were represented; 53 percent of respondent companies have revenues of $1 billion or less. The SEC is now embracing data analytics technology and has improved its market oversight in the years since Johnson came aboard.