Because it wasn't that people who weren't alive any longer were getting paid social security. It was that there was a live social security number which could be used throughout the whole system. That's where you're going to have fraud, waste, and abuse. Today I sit down with Frank Bisignano who oversees not one but two of America's most consequential institutions: the Social Security Administration (SSA) and the Internal Revenue Service (IRS). Before stepping into government, he built a career at the very top of finance: CEO of Fiserv, co-COO of JPMorgan Chase, and the youngest senior vice president in American Express history at just 25. Now he's taking on a different kind of challenge, bringing, in his words, accuracy to massive federal agencies that impact every American.
We have inaccurate information on a mission-critical file, and we've cleaned that up.
What does it take to streamline systems this complex? And can social security really survive the decades ahead? This is American Thought Leaders and I'm Yana Kellik. Commissioner and CEO Frank Bisignano, such a pleasure to have you on American Thought Leaders.
Thanks for having me. I'm honored to be here.
So you take care of two agencies which deal with an astonishing amount of cash. I see here the Social Security Administration outlays are about $1.7 trillion, and the IRS, Internal Revenue Service, inflows of $5.6 trillion. That is an unfathomable amount of money that you are responsible for. A big question that people have, right, is we keep hearing about waste, fraud, and abuse, right? And this is something that's been a key issue for this administration. So, you know, across these two agencies, what were the things that you found that perhaps were the most shocking or unbelievable and what corrections have you been implementing?
Well, you know, fraud, waste, and abuse happens in all shapes and sizes and all dimensions. And those are some staggering numbers, but as I had said in my confirmation hearing, I was running a company doing, you know, 2.5 trillion of payments a day. So I've been fortunate and blessed in the opportunities I've had and the people I've worked for and now especially the great honor to work for President Trump. But you know, one very simple thing was at Social Security, we had a website that you could have a digital account on, but it was down, you know, almost 20% of the time by design, 29 hours a week. And so you might not think of that as fraud, waste, and abuse, but we now have more than 100 million digital users because in a couple weeks really, you know, with testing and everything, we changed that and it was up, you know, every hour of the day. We also ran a concept that said we're going to have a pristine control environment. It's always important. We saved, you know, tens of billions of dollars on what we saw as control-related issues. We treat everything in a manner that we want to get the best possible outcome. So I think when you think about fraud, waste, and abuse, getting payments right is the most important thing. Being able to, given the amount of money that we're flowing, and that's what we've had a maniacal focus on while delivering customer service at a level that they've never seen before.
Just very briefly, what do you mean by design it was down?
You know, they were running batch cycles on weekends and at night and, you know, probably when it first was built, the conclusion was, okay, well, we'll have the data up, we can have the data up when we're running the batch cycle. But, you know, modern-day technology allows you to mirror data and then keep it up there and do something called store and forward. So if people were transacting with us, we'd store it and when the batch cycle ended running, we'd pass it on. And, you know, it didn't sound really bad unless you were in Hawaii or California, you know, if the system went down at, you know, 12. Lots of people want to use a system, you know, on weekends and it wasn't always up. So, it was by design. But that doesn't mean it was a good idea. It might have been a convenient idea and we had some great engineers that changed it all in less than two weeks.
So, you know, one of the things I have here is that there were 12.4 million individuals on social security aged 120 or over. So, so what was happening? I've read about this. What was happening with these people? Were they getting paid somehow or?
No, you know, we embarked on a project that we're at the kind of completion of what I called was reconciling the data. So, you know, there wasn't really a routine to reconcile data and over time it evolved. And I thought, you know, something called the social security database. We now have built routines that cause us to regularly ensure that those on it should be on it. And what I said was, which I 100% believe, is it wasn't that people who weren't alive any longer were getting paid social security. It was that there was a live social security number which could be used throughout the whole system. So, you know, that's where you're going to have fraud, waste, and abuse. You know, I said this too early on when asked about it. You know, of course, what was being said was we have inaccurate information on a mission-critical file. And we've cleaned that up. And we've cleaned it up way beyond that. Way beyond that. And I'm pretty proud of the effort. You know, I created two positions: a head of risk management and a head of cyber and resiliency or security and resiliency that did not exist reporting into me because the control environment is so darn important to deliver a great client experience.
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So, and there's something called SSI and I think there's just a lot of confusion about even what this is exactly and why it's important. Can you lay that out?
Well, you know, Social Security is in 100% of every American's retirement plan, you know, right? So, if you think about it that way, and so also, you know, it protects the most vulnerable. We have a disability system. We have fundamentally a thousand judges that adjudicate hundreds of thousands of cases to ensure people who should get disability do. And then, you know, we have supplemental insurance for those who can't really manage through the environment that they operate in, the most vulnerable people. And what was interesting is when I came into the job, it wasn't really on my mind. And what I heard from field offices is how much labor goes into SSI because you're validating monthly that these people qualify for this supplemental payment. And what I decided to do was put somebody in charge of it, right? Have an executive who reports to me have responsibility for SSI, as opposed to have it completely diffused and subordinated to no responsibility but a process throughout the whole organization. And so we're streamlining it. We're using data feeds to help the decision-making criteria and it's not serving the largest swath of Americans but it's serving our most vulnerable and in a manner that actually they get full attention of leadership and technology and all the things the other processes... it's the smallest part of Social Security Administration's payments but it's equally as important.
You've just elevated these benefits basically. That's why the focus on this and before they were at the bottom of the barrel.
No longer subordinated to a process, but think of it like I view it like we have business lines. We have a disability business line, we have a retirement business line, and we have a supplemental income business line. And, you know, that deserves as much attention and requires more work at the end of it because once people are in retirement, you know, those are not the people calling us and asking for help. They get their direct deposits, you know, 99% of them, you know, those who get checks get them in the mail. That's obviously dissipated over time, but people on supplemental insurance are continually validating their responsibility to let us know why they need to stay on it. So, building a separate leadership and a structure will actually save us a lot of money. It's going to save us a lot of money, but the whole program is about how we do a better job for the American public, but do it in efficient modern-day methodology.
And when it comes to social security, how big an issue is it that people who are illegally in the United States have access to that system and are collecting money they shouldn't be?
Well, I think, you know, back to that story about reconciling the file, that's one of the main components of it: ensuring the people on file are citizens, valid citizens that we have proof of. And, you know, that's been the journey we've been on since we came here to have accurate books and records. So we like to believe that we've made a large dent in it. I think you'll hear shortly from us the culmination of that effort.
Tremendous progress. And, you know, the reason why, you know, we're able to drive payment accuracy over time up because we're only paying to those who should get paid. You know, there was a lot of dialogue about the fact that we took people off the system who we figured out weren't still alive. So we want to be exactly accurate in everything we do because it has a financial implication. It has an identity implication, right? But we have, I'd give the risk team tremendous, tremendous grades for what they've got done and calling through all this data and making it a priority in something that's never been done before.
I want to talk a little bit about your background because, I mean, you have a pretty unique background to step into this kind of role and of course you managed, as you mentioned, you managed a massive payment processor and dealt with, you know, again, these sort of, to most of us, unfathomable amounts of money on a daily basis. Just tell me a little bit about your background and how you ended up here.
I always went to an operational bent very early on. Somebody said to me when I was 20, you need to learn how to code, and that was a long time ago. So I was a technologist and operator. I had fabulous bosses as I have today, which was, you know, the pinnacle of my life having the opportunity to work for President Trump. But, you know, I worked with Henry Kravis who ran KKR and turned around their largest investment. I worked with one of the greatest CEOs in financial services and maybe in the country for over 20 years, Jamie Dimon. Before that I worked for Jamie and Sandy Weill who was one of the forefathers of buying companies and integrating them. So I straddled all the technology and operations and infrastructure. You know, I had the responsibility as the chief administrative officer on 9/11 for Citigroup and had 16,000 people in lower Manhattan and Seven World Trade Center was one of our buildings and I saw everything imaginable and never left but we had a plan. So I spent a lot of time in large-scale operations and then running technical businesses like the global transaction bank at Citigroup, multiple times running mortgage businesses including post-crisis and having the opportunity to turn around the housing market with the housing secretary and another chief negotiator for the banks. But really focused, spent a lot of time on how to make things more efficient, how to ensure books and records are straight and how to deliver for the American consumer. You know, and so in the last company that I was CEO, and I love saying we served every American household, I have that opportunity again here.
So you're bringing a very kind of corporate vision, right, to this? Would you say that's accurate?
Yeah, I would say I'm bringing an operational focus to it that I might have honed in all my years and being at the top of the largest financial institutions of the world.
It's absolutely fascinating to see, for example, one of the big focuses you seem to have is digitization and that's going to streamline a lot of the work that's happening. And so I want to talk about that, but I also want to talk about it in the context where there's a lot of people that are very skeptical of digitization because it makes some of this PII, right, personally identifiable information, maybe more easily accessible, more easily to be abused. There's a lot less trust in these big institutions, some of these corporate institutions. So how do you square that? On the one side, of course, you can see the value of digitization, right? On the other hand, there's this potential, I don't know, increase in ability to use personal information if that were to be abused. How do you deal with that?
Well, I think first of all, I've always run on a platform of we're going to serve clients where they want to be served, right? In this case, we have 1,200 plus field offices that are there. They're pillars of many communities. And if people want to come in and do face-to-face business, we're available. I love saying we haven't shut a field office, right? That doesn't mean we haven't done way more transactions online or on the phone. But I think omni-channel presence matters a lot. In this case, omni-channel is you have the ability to call, you have the ability to walk in and you have the ability, you know, seven days a week, 24 hours a day to go online and look for the information you need or do 38 different transaction types. So I think that's the best you could do for people, right? We're going to meet you where you want to go, where you're most comfortable. We all know that everybody is transacting digitally at all different ages. And we're in the midst of rolling out a mobile app. Taking all that information and allowing you to do it on your phone and to be able to look up at my social security account and understand exactly where you are in your life cycle. If you're sitting on a plane and wanted to look at your mobile app, there's a reason we have more than a hundred million digital users. They're all voluntary. We didn't ask one of them to, we might have asked them, but we believe that people should be served and they want to be served. Obviously, we're maniacally focused on cyber. You know, I've elevated two positions that report to me. One is the head of risk management and that's really been the group that's overseen that cleanup of the database and driven down the fraud numbers by billions. And then the head of security and resiliency which includes cyber. These are not functions that historically would have ever been even known reporting close to the commissioner. But I think they're mandatory functions that deserve a seat at the table to have a voice every week in our governance structures on how to run the place.
Right. Yeah, I think this applies, this is just the kind of maybe like a philosophical question, but it has a very profound operational answer. Like, you know, in a role such as yours both on the side of the IRS and the Social Security, SSA, on the one hand, you know, you're responsible to the people obviously, right? This is the form of government we have. On the other hand, you're responsible to, you know, the institutions, right? And the institutions, those goals are not necessarily always the same. And we've seen kind of increased, for example, increased interest in government institutions and getting a lot of personal information and that so these systems can be abused. I'm just very curious how you think about that, like how do we deal with that tension if you will, because we're heading right into a world aggressively where all information is there out, you know, kind of in the cloud so to speak, right?
Yeah, well, I think first of all, I think of it in a really pragmatic way. I am here to serve the American people, that means protect their information also. And I am here to serve the federal government led by President Trump to do the best imaginable job to drive out fraud, waste, and abuse, which really in my case means serving the client better and more accurately. Right? I've always believed that you can drive efficiency and get higher client service together. You know, fundamentally when, you know, two years ago it took 40 minutes to answer the phone and now it takes eight. Well, that's going to be way more productive and way more client service-oriented. And by the way, that's because we're using more technology. I love saying technology is the great enabler, right? I've done it my whole career. How do we make it easy for the American public to deal with us, the federal government, and how do we make it better actually for our employees? For our employees, the more technology we bring, the more their job is enriched. And then lastly, you know, it's job one for everybody to protect the information. That's job one.
Right. That's job one. And, you know, you sound like you're doing better than my telecom company to be perfectly honest here.
Well, I always say all the time, I won't bring up names, but I say like I know, you know, because I get served by entities. My wife, my family gets served by entities. Outperformance is better than public entities, public companies. Right. It really is. I'm really darn proud of people and I think it's important. I'll tell you something about these people, you know, in the organization. The 24th and the 26th of December, where it was an executive order that they were holidays and that the workforce could stay home. And, you know, in these organizations historically that's what they did and I thought about the people and they had gone through this horrible, horrible induced shutdown and, you know, we were navigating hardships all the time for the people. I mean we have a horrible shutdown at DHS right now. And so I recognized, I'm the son of a 44-year federal employee. So I understand, you know, when I came on the job, I told everybody I had a bias towards them. Of course, they thought, 'Oh my god, what do you mean?' I have a bias. The hardest working person I ever knew. My dad, my role model, who was an orphan himself, worked 44 years for Treasury in customs enforcement. And so anyhow, I knew dad liked overtime. And so I asked people, we had them, I said, 'I like to open up all the field offices. I like to open up the phone center. I want to serve the American public.' 66% of our people volunteered to come in. So this went in SSA, we went from the largest, in large agencies, the lowest morale to people who want to come in and serve the American public on days they could have stayed home. And, you know, that also means they had no tax on that overtime. OBBB, right? And that is affecting employers positively and people positively. You know, I hear from employers that, you know, now my people want to work overtime more than they ever did because, you know, at some point they were saying, well, overtime, you know, I get taxed on it. You know, I'm making a trade. So, I think that was effective also for those who understood when they all volunteered to come in.
Let's talk about Trump accounts. I know this is something we, when we were talking offline, I know this is something very important to you and so just explain to me what they are and where we're at.
Oh, well, we're about to pierce a million babies born that are going to get the $1,000. So, start there. In the next four years, you know, child born, you fill out my favorite form of 4547 and you can register your child, get $1,000, put in a Trump account for them, but that you can register, you know, anyone up till 18 and, you know, you begin, you know, whether it's Michael Dell doing it or there's lots of people who are putting money into the system. Parents using it as a savings vehicle for their child up till 18. It's a powerful, powerful instrument. We have over three million Trump accounts opened. Obviously, I said a million babies, but we have over three million because people are opening up for their children. And I think it's fabulous. I think, you know, it's another form of an IRA just in a different concept.
Right, and I mean basically and for any child under 18 this can be opened up so it sounds like there's a lot more opportunity here to be taken.
Yeah, I think people are becoming educated to the topic. We probably, you will continue to educate them. I think you'll see financial planners educating them. I think you're going to see tax preparers educating them and I think it's going to be explosive.
