Discover Financial Services CIO: Diane Offereins

Dan Farber: Diane thanks for joining me.

Diane Offereins: Oh, it's great to be here, thanks for having me.

Dan Farber: First of all, give me an idea of the size and scope of your operation at Discover financial services.

Diane Offereins: Discover is a diversified financial services company. So we run a credit network, a debit network, a very large card issuing business, we have a deposits and loan business so we're very much a diversified financial services company. The scopes of my responsibilities include technology, with all the traditional pieces of technology. That would be application development, the infrastructure, the operations behind running a very sophisticated technology operation. And lastly, and probably most recently, I've taken responsibility for business unit. And that business unit is "Pulse", it is a debit network which compliments the signature network branded Discover as well. And that's been a very interesting journey for me to look at a company that is really primarily a technology company that has a P and L associated with it so it's been a really great experience for me.

Dan Farber: What are core pieces of technology in terms of your operations?

Diane Offereins: Well the heart of what we do is our authorization system. So if you think about your experience with Discover or Pulse, you walk into an establishment and you place your card out and that card gets swipe and in some seconds time it is routed form that merchant probably to a processor, to the Discover network, and then back to the issuing bank, and that's how we give the approval that you have actually an open to buy on your account, that you're in good standing. So there's a lot of processing that goes behind that authorization and when I think about the core piece of our company, that's where it all starts.

Dan Farber: And when you're talking about your applications and servers, are you like many other companies? Focused to a great deal on consolidation, virtualization, reducing the number of applications you have to manage?

Diane Offereins: Always. One of the things that I think is always so fascinating, is people say "are you focused this year on growth or efficiency?" and I think the days of not delivering a cost effective infrastructure as part of the base case of what you work on every year, it's assumed that you're going to do that. Every year the technology grows and perfects so your ability to virtualizes in a more effective way, tools become available, so I think you're able to progress the efficiency of your infrastructure every year by making sure that you layer in a base of investment to make sure you're taking advantage of the newest technologies out there.

Dan Farber: You're in a very competitive marketplace, competitors like Visa and Mastercard. How do you foster a culture of innovation where you're able to keep up or get ahead of those competitors?

Diane Offereins: Well if you know anything about Discover, there's scrappiness about Discover that is part of its heritage. When the industry said that you couldn't make another payment network, Discover 21 years later is a very viable and vibrant company. We were spun off of Morgan Stanley this summer so this is our first chance of actually being a standalone company. It's always been a part of another company be it way back in the early days Sears, part of Dean Witter, part of Morgan Stanley, so there is a resiliency and a culture of innovation at Discover that's really part of the heritage of the company.

Dan Farber: What are some examples of innovations that you can count on that have gotten you ahead of your competitors?

Diane Offereins: Well our network, in having a card issuing business with its own network, you know there's really only one competitor out there that has that and that's American Express. So having the flexibility of being able to deliver our product through our own network; now we do offer that network to select partners; that really does allow us to do a lot of very unique things. Partnerships directly with merchants, programs that we can offer because we run our own network, and we've also enhanced that beyond, and this is where I think we're quite unique compared to any other network out there, not only do we have a credit network, we have a debit network as well. So all PIN debit transactions, there's no kind of payment form factor that we can't deliver across one of our networks.

Dan Farber: Now there are new kinds of payment form factors that we're hearing about these days such as fingerprint or RFID, I guess what you would call the wallet-less consumer. What is Discover doing in that area?

Diane Offereins: We run a number of pilots always in terms of testing new technologies. So we've got cell phone pilots, we're doing some things with contactless payments. It's a space I think that is evolving very quickly, and I think you put down a couple of small bets; you're going to wait and see how the market is actually going to be developed because our product really is a consumer driven product. So it's very important to us that we adopt technologies that or consumers are going to embrace. So if we create something that we love and the consumers find it cumbersome or not intuitive, there's not going to be a high adoption rate. So given the fact that we're so consumer-centric, some of these technologies are going to play out, I think we have a view of where it's going and we're putting bets along and making investments along those lines. I think the cell phone is going to be key to the way that we introduce new form factors in the future, if you think about it everybody has a cell phone.

Dan Farber: Well you know in other countries outside the US, people do use their cell phones to do cashless payment.

Diane Offereins: Absolutely, and it's more than cashless payments. I think of your cell phone as like your own little mini-processor that you carry around with you. And if you think of the kind of things that you can do with just a little bit of compute power on that phone, it's un-tethered, and something that you naturally wan to take with you everywhere you go, I think I really does open up a lot of opportunity.

Dan Farber: Tell me a little bit about your consumer and merchant facing websites for example you have 50 million customers, 4 million merchants, what do you do in terms of creating a great experience for those constituencies?

Diane Offereins: Well our website is one of the hallmarks of the company. So in terms of places where we make big technology investments and where we focus a lot of our innovation, it would be clearly one of those areas is on the web. And if you go out to our website, we've won a number of awards in terms of just the usability of that site. We want to make sure that it's an experience where you can do virtually anything that you need to do in a very intuitive way on the web. And we've replicated shared code between the call center app where we have a group of customers that still like to call us and have a rep handle all of those activities. That experience between the web and the call center, we've embraced the fact that those 2 channels need to be seamless and we've replicated the functionality so anything you can do on the phone you can actually do on the web and I think our web experience has a lot more potential and a lot more flexibility in terms of the way you manage your relationship with us, then you could even experience with working directly with a representative.

Dan Farber: Looking forward, what do you see as your biggest challenge?

Diane Offereins: I think I've never really focused on one particular challenge. Our company is a newly public company so with that comes a number of challenges. Growing Discover and making sure it's viable in the long run. Having discover chart its own path is really exciting for all the employees at discover. And you know technology is really a business enabler. And every year we look and we're thrilled to see the new capabilities that technology can bring to the business. So we look at those kinds of things as great opportunities to enhance the overall business with technology.

Dan Farber: Diane thanks so much for speaking with me.

Diane Offereins: It's been great, thanks for having me.

Dan Farber: I've been speaking with Diane Offereins, who is the Chief Information Officer and Executive Vice-President at Discover Financial Services. For CIO Sessions I'm Dan Farber, thanks for watching.