Gillian Larkins, ASX CFO talks transformation, change and new challenges. By BEN POWER.
For many, change is something we go through reluctantly, but for Gillian Larkins, change is a craft she has honed since birth.
Larkins’ early experiences gave her, not only a taste for economics, but a taste for the exhilaration and potential of change. Now, this passion has taken her to the Australian Securities Exchange (ASX) as chief financial officer. Like much of her journey, she has come along at a time of significant disruption, with technology and innovation through blockchain about to revolutionise the ASX.
“It’s really a very stimulating time to join,” she said. “If it’s not transformational, it’s certainly dealing with change.”
For over 25 years, the ASX has been underpinned by CHESS technology. Now, looking towards a more secure, data-driven future, they are planning to move onto a blockchain platform.
But, before Larkins became entangled in blockchain, she forged a formidable career.
As a child of the 70s in New Zealand, Larkins was born into a time of economic upheaval and transformation. Prime Minister Robert Muldoon was driving his ‘think big’ strategy of borrowing to pay for large-scale infrastructure projects. Economics was at the forefront of the national agenda.
“It made me quite interested in how the economy worked,” Larkins said, adding she naturally wanted to study economics at university.
The problem, as she was told back then, was there were very few economists in New Zealand. If she wanted a job, she would have to study accounting.
“I did rail against that because I thought accounting would be dull. But I did it because I was a fairly diligent child,” she said.
Larkins now believes it was good advice. She has managed to combine the two, forging a career as an accountant in the finance industry. “I’ve really had the best of both worlds,” she said.
When Larkins left university at 21 years of age, she joined Ernst & Young in Wellington. The day after she received her Chartered Accountant qualification, she “fled” to London and secured her first job in finance at Morgan Stanley.
While in London, she wanted to work out what she really enjoyed doing, so when she returned home in her late 20s or early 30s she could “hit the gas and run with it”.
When her husband was offered a job as an energy lawyer at Herbert Smith Freehills, Larkins came to Sydney, where she continued to thrive through massive change.
Larkins’ first job in Australia was at Woolworths, when it was run by then CEO Roger Corbett. Corbett was driving ‘Project Refresh’, a strategy copied from Walmart, that saw the retailer slash margins to boost volumes, with half the cash then distributed to shareholders and half invested into long-term investments like distribution centres.
Corbett’s strategy was successful with the share price rallying from around $3 to $10.
“It was very thrilling, and I learnt a lot. It was a defining career moment when I learnt to do strategic planning,” said Larkins.
After some time at Woolworths, Larkin rejoined the finance industry, taking a position as CFO of the Investment Bank for Australia and NZ at Citi.
She had her first child during her time at Citi and, while on maternity leave, she was promoted to the Group CFO, covering both the local retail bank offering and the wealth management arm.
“I didn’t give up when I had children (now 12 and 15). Fortunately, I had the support of a very forward-thinking executive at Citi and I was promoted when I was away. That is a very good way to keep women. On a personal front, I found Citi very good on the diversity side.”
Larkins told us that her parents instilled in her a belief in the importance of women having their own careers and money so they can be independent.
“As a result, I’ve always had a conscience that I should be working. So, I’ve never quite been able to give up work,” she said.
Being a Group CFO and having children “was a pretty challenging time. But I had a supportive boss who helped me.” Larkins said that Citi’s CFO in New York was also a working mother who became a role model.
Larkins said she managed to juggle mothering with a high-powered career by changing her attitude.
“I had the realisation with my first child that my life had changed. I realised I couldn’t be perfect anymore. Many times, I questioned what I was doing, but somehow you get through and it does get easier. I learnt not to sweat the small stuff.”
Larkins said exercising – running, tennis and Pilates – has also helped her manage stress and maintain work-life balance.
In March 2008, Larkins joined Westpac as CFO of its Institutional Bank, a month after Gail Kelly began her reign as CEO and executed the merger with St George.
Then the GFC hit.
“I found myself either in the throes of the GFC or fixing up the remnants. I learnt so much. But once again I was working with a management team that was strong and is still revered,” she said.
Her last role ahead of the ASX was at fund manager, Perpetual. Again, the company was being transformed and refocused. She was at the heart of that effort, working as Group Executive of Transformation, before becoming CFO, and having responsibility for the technology, risk and legal teams.
She also sat on Perpetual’s superannuation board which brought her closer to the superannuation industry. Larkins said that board experience highlighted the responsibility of integrity around superannuation.
“You’ve got to look after someone else’s money. It’s a real responsibility. So you’ve really got to make sure you do the right thing, make sure you dot the i’s and cross the t’s.”
You’ve got to look after someone else’s money. It’s a real responsibility. So you’ve really got to make sure you do the right thing, make sure you dot the i’s and cross the t’s
Larkins was ready for a new challenge, and five months ago she joined the ASX as CFO.
The conventional narrative around the changes to the ASX is that it faces a raft of threats.
But Larkins said the ASX has always been competitive.
“Competition is what we are used to. We compete in many aspects, whether it’s for listings or against other trading venues. There is always a sense other people can come in and I think it keeps people on their toes.”
“ASX has demonstrated that it is a strong competitor,” she added. “We strive to put the customer first and we’re a deep, liquid, well-regulated marketplace that’s attractive to issuers and investors.”
The truth of the ASX narrative is relentless innovation. The company has always had a history of being at the forefront of changes whether it’s being among the first to embrace electronic trading, to demutualise and self-list, or to merge equities and derivatives. “And now, we’re leading the exchange world in developing distributed ledger technology.”
Larkins said ASX’s first focus around innovation is to “make sure we put in place a resilient structure”.
“The systems that underlie the financial markets ecosystem need to have integrity, need to be trusted and need to be resilient – it can’t fall over,” she said.
The ASX is currently replacing its CHESS clearing and settlement system with blockchain or distributed ledger technology (DLT). “That’s the main game right now,” she said.
The new system goes live in March/April 2021, and the ASX recently opened the Customer Development Environment (CDE), which allows customers to interact and experiment with the new system.
CHESS put Australia at the forefront of clearing and settlement technology globally when it was implemented in 1994 and it is still performing well. But Larkins said, “it is not a platform for the 2020s and beyond” and so the ASX needed to plan for the future.
The new DLT will deliver several benefits for superannuation funds. A super fund via a DLT connection can have direct, real-time line of sight of its HIN held investments.
Funds can also interact directly with custodians, the ASX, listed companies and other intermediaries via a multi-party workflow capability – where workflows are automated to help reduce processing time and errors in areas such as asset servicing and corporate action processing.
The ASX will also make the DLT infrastructure capability available to funds as a service which allows them, or their service providers, to develop their own smart contract-based solutions to run across this infrastructure.
Apart from replacing CHESS, Larkins said the ASX has another focus: designing new products and services to meet client needs. The CHESS replacement program began as simply a system replacement, but it is opening up new opportunities which are “potentially business model reshaping”.
“It’s very important from a regulatory point of view that we’re doing everything from a licence to operate perspective,” Larkins said.
“But we’re starting to get a growth dimension to this. We need to figure out from a business model perspective how that’s set up.”
The ASX also has other projects that support new products, including a data analytics platform.
“We sit on a great deal of data here and some of that is quite valuable to clients, both participants and issuers. There is a market for a data analytics platform. So, we’re building that out,” she said.
The data analytics platform will deliver a number of benefits, including access to ASX data assets for analytics and data science; availability of new analytics solutions assisting valuations, best execution, liquidity, and insights concerning assets and service providers, and access to a data science platform.
At the end of the day, super funds need a successful and innovative ASX to keep delivering better outcomes for members.
“It’s so integral to the super industry that we’re working in a very reliable trustworthy way,” she said.
“I think it’s very important that over time entities like ours work more closely with super funds to make sure we’re looking after Australian investors.”
I think it’s very important that over time entities like ours work more closely with super funds to make sure we’re looking after Australian investors
At the heart of that relationship is ASX’s technology and relentless innovation.
“Technology needs to be refreshed and changed especially in this day and age,” she said.
“It’s a vital part of what the ASX does.”
“Ultimately, we’re here to serve the interests of end investors. We see our role as providing a range of products and services to offer investors diversity and the opportunity to build long-term value.”
Given her history of change and transformation, Larkins is well placed to help drive the ASX into the future.
“As you can see from my history, I love transformation, I love change, and I love challenges,” she said.
“This [new role] had the ingredients of where I can sit at the table as the CFO but I’m learning about the technology and the change they’re instigating as well. So, it’s win-win.” Photography by Aran Anderson.