Erik Laney isn’t the job-hopping sort. He got here out of faculty right into a job at J.P. Morgan, the place he stayed for six and a half years, earlier than becoming a member of a shopper, Santander Shopper USA. That was 10 years in the past.
However he’s hardly stayed nonetheless. Alongside the way in which to being named in September 2022 as CFO at Santander Shopper USA — a privately held unit of Madrid-based banking and monetary providers large Santander Group — Laney led monetary planning and evaluation, technique and company growth and the treasury perform.
He not too long ago was tapped for an extra position: head of finance (a title functionally equal to CFO) for one more division, Santander Shopper & Business Banking (CBB), the deposit-gathering arm for Boston-based Santander Financial institution N.A.
Santander Shopper USA is Santander’s U.S. auto-financing arm. It’s bought heft, with $65 billion in auto loans and leases on the steadiness sheet. It features as a B2B2C firm, working with automobile dealerships to supply worth quotes for client loans, after which, after a sale, taking up all loan-servicing actions and associated buyer interactions.
CBB is at the moment considerably smaller than the auto-loan enterprise, with about $45 billion of client deposits.
Laney, who studies to each Shopper USA’s CEO and the finance chief of the holding firm for all of Santander Group’s U.S. companies, says his path to the CFO position was purposeful, if “not always linear — I’ve hopped around a bit.”
CFO.com not too long ago spoke with Laney about his profession, his new extra position and auto-industry tendencies.
Erik Laney
Permission granted by Erik Laney
CFO, Santander Shopper USA
First CFO place: 2022
Notable earlier corporations:
This interview has been edited for brevity and readability.
DAVID MCCANN: Not like many finance executives, you’ve solely had a few employers. Is that by design?
ERIK LANEY: Actually, once I left school I assumed could be with J.P. Morgan for my total profession. I began there throughout the monetary disaster in 2008, as an intern within the funding financial institution’s monetary establishments group. It was proper after they acquired Bear Stearns, and there have been individuals from each Bear and J.P. on the ground. It was an excellent lively time. However a chance [eventually] arose with Santander and I took it.
Was it your aim at Santander Shopper USA to turn into the CFO?
LANEY: Sure. At J.P. Morgan I used to be an funding banker, and bankers often pitch high-level merchandise and strategic initiatives. You don’t see the day-to-day operations, however you perceive corporations at a better stage. I bought publicity to broader administration groups and work together with the enterprise in a monetary providers surroundings.
Additionally, Santander’s administration group was extremely acquisitive whereas I used to be at J.P. Morgan. As a result of the monetary disaster in Europe lagged the U.S. disaster, there have been tons of alternatives for Europeans to place money into the U.S. and develop their enterprise. That’s what Santander Group did with the auto-loan enterprise. They put up billions to accumulate the auto companies of Citi, HSBC and others.
“At J.P. Morgan I was an investment banker, and bankers usually pitch high-level products and strategic initiatives. You don’t see the day-to-day operations, but you understand companies at a higher level.”
So Santander was a super-interesting place due to that — an organization that acknowledged alternatives and had a knack for them in instances of dislocation.
You simply bought the extra position of head of finance on the client and enterprise banking division. How intently aligned are these companies?
LANEY: They’re very totally different companies. One aim is to have a look at widespread, higher-level practices and align these throughout the divisions. However our auto enterprise is a mono-line lending enterprise. CBB is complementary, as a result of the loans are funded with deposits in some circumstances.
Do you’ve a method for the way you’re going to deal with the disparate duties?
LANEY: I feel all of it comes right down to having the suitable individuals in the suitable roles. On the auto enterprise I’ve labored in each finance [discipline], so there’s a group of individuals in each that I do know and belief and have labored with for a very long time.
On the CBB aspect I’m seeking to develop that, to finest perceive how finance finest interacts with the enterprise, to verify we’re not simply displaying them the information however are going to make strategic selections.
If you bought the CFO job, was there any tradition shock associated to the scope of duties and pressures, regardless that you’d been with the corporate for a number of years?
LANEY: I’d say it’s been precisely what I assumed it might be. I feel each CFO needs to consider themselves as somebody who can support the enterprise, serving to make higher enterprise and financial selections, and never simply be an accountant.
I used to be already doing that in my company growth position. Our finance division is just a little totally different from a conventional one, within the sense that we do numerous front-end enterprise growth. As an illustration, if we need to begin a brand new relationship with a automobile producer, it’s the finance group that pitches and coordinates that and negotiates the contracts, along with the enterprise.
I even have had actually good sponsorship all through all of this. Juan Carlos Alvarez, the CFO of the U.S. holding firm, helps me navigate the worldwide establishment, which is extremely essential for a CFO inside a world establishment. Who can I name when I’ve an issue? And the way can I rapidly escalate this to the place it doesn’t simply drag out and a choice isn’t made?
“Data is key to our business — not only being able to digest it accurately and make very good decisions based on it but also to digest it quickly.”
I additionally had the advantage of taking up as CFO when there was additionally a brand new CEO of the auto enterprise, Bruce Jackson. He’d been on the firm for a number of years, and he additionally got here from J.P. Morgan. He had a view on the place he needed to take the enterprise, so I didn’t need to step into someone else’s selections. We bought to make them along with a clear slate, in some methods.
Lending is a data-heavy endeavor. Are you able to characterize the place you stand by way of utilizing knowledge to leverage the enterprise?
LANEY: Automobile sellers ship us knowledge that we use to make mortgage selections. They ship the information to different lenders as properly. We take that knowledge and go to credit score bureaus and different third-party sources of data and attempt to decide the shopper’s creditworthiness in addition to the value wanted to statistically generate profits on a bunch of loans.
So, knowledge is vital to our enterprise — not solely with the ability to digest it precisely and make excellent selections based mostly on it but in addition to digest it rapidly. A supplier expects that if they provide you this data, they’re going to get a worth quote again in lower than 30 seconds. There’s not numerous margins for error in that.
Auto gross sales historically rise and fall with the economic system. How do you deal with that cyclicality?
LANEY: It’s been a really totally different market surroundings over the past 4 years because the COVID-19 pandemic, and manufacturing continues to be making an attempt to catch as much as client demand. So we’re seeing continued elevated automobile costs, whereas rates of interest are additionally greater.
We do numerous evaluation because the 12 months goes on, however there’s additionally a proper annual stress-testing course of run by the Federal Reserve to find out whether or not our capital and reserve ranges are proper, and within the worst-case eventualities, what would we do from a funding perspective?
After which it’s simply ongoing threat administration — ensuring the tendencies you anticipated to see are what you’re truly seeing. If not, there’s an lively suggestions loop between who’s monitoring the efficiency and who’s making the selections on the entrance finish.
Luckily, or sadly, excessive rates of interest have been the theme of my tenure as CFO. We work with the enterprise to know, as the price of debt will increase, what to do [with] worth and cross that on to verify our margins don’t get dramatically squeezed.
With all the numerous pressures in a CFO job, what retains you up at night time? Or do you simply sleep like a child?
LANEY: That’s sort of my character, to be sincere. There are private points of the necessities, by way of taking away time with your loved ones and people kinds of issues. That’s at all times tough for individuals to navigate.
However in a job that requires numerous you, simply be sure that in the event you’re bringing your complete self to work, you deliver your complete self to your property life as properly.