Challenges and Changes> > >
by William H. Stone, Jr., First Vice President
Last year presented yet another set of challenges and changes for the Federal Reserve Bank of Philadelphia. The aftermath of a global financial crisis, the ongoing restructuring of check processing within the Federal Reserve System, and the continuing pursuit to remain innovative even through a period of turmoil — all tested our resourcefulness and creativity. Yet, these challenges also created opportunities for our employees to make significant contributions to the Federal Reserve System, Third District constituents, and the community at large.
The 2009 annual report includes articles that will describe many of these contributions, including several that I would like to highlight.
By the end of 2009, the Philadelphia Fed had reached the end of a seven-year journey as the Federal Reserve adapted its operations to accommodate the ongoing shift from paper checks to electronic payments. For the past few years, Philadelphia has served as one of four main consolidation sites as the Fed reduced retail payment operations from 45 sites in 2003 to a single site for electronic check processing in Atlanta and a single site for paper check processing in Cleveland.
In 2009, Philadelphia staff completed the consolidation of the Baltimore branch's check processing operations into Philadelphia's operations, and in December, our staff helped transfer all paper check processing for much of the northeastern United States to the national processing site in Cleveland.
Although this transition supports the Fed's mission to promote an efficient and reliable payment system, we also recognize that this consolidation affects employees. Consequently, we hired an outplacement firm to help affected employees find new jobs — both inside and outside the Bank. We appreciate the hard work of our staff and their dedication to ensuring a smooth transition for our customers right up through the last day of check processing here.
Philadelphia Fed employees have a strong spirit of volunteerism, and our Bank has a long tradition of supporting worthwhile causes. During 2009, we developed a strategic initiative to coordinate and support Bank-wide volunteer efforts. This initiative, PhillyFedCARES, will initially help us focus on causes that aid in the welfare and education of children throughout the Third District while continuing to support our current charitable activities.
In January 2010, we conducted our first PhillyFedCARES Day of Service, in which employees and their families worked together to spruce up a local elementary school. Good citizens make good employees. I am proud to say that many of our employees have gotten involved in PhillyFedCARES, contributing their time and skills to the communities we serve.
Several years ago, the Bank added an important word, innovator, to its vision statement: "The Federal Reserve Bank of Philadelphia will be widely recognized as a leader and innovator in central bank knowledge and service." That role as innovator requires an ongoing commitment by those involved in day-to-day operations to explore the innovations that can most directly improve our organization's overall performance.
Therefore, in 2009, the Bank launched the Innovation Forum. This employee forum creates a marketplace for ideas and gives employees the opportunity to contribute to the creative process. Its goal is to cultivate ideas that will advance the work of the Philadelphia Fed, building our business and providing opportunities for leadership, both in the Bank and in the Federal Reserve System.
In fact, our Innovation Forum has already prompted a new venture that the Philadelphia Fed will lead on behalf of the Federal Reserve: the Consumer and Securities Data Warehouse (CSDW) project. Issues pertaining to consumer credit were central to the recent financial crisis, and the CSDW project will help the Fed gather and analyze data about consumer credit as well as securities based on consumer debt.
The project will build on lessons learned in the Fed's ongoing Mortgage Outreach and Research Efforts (MORE), which included collaborating on analyzing large, robust data sets of consumer mortgage data. The CSDW should help us with similar analyses of consumer credit data, which will help Fed researchers, supervisors, and policymakers study the overall markets.
The Innovation Forum also highlighted ongoing initiatives to ensure that our operations are "going green" wherever possible. In 2009, we implemented a pilot program to cut our Reserve Bank's energy consumption. We've installed more energy-efficient lighting and have taken measures to ensure improved energy efficiency in all major equipment.
In fact, our new off-site screening facility, which officially opened in December 2009, incorporates a number of environmentally sound features. The building, designed to enhance the security and safety of our employees and operations, is topped with a "green" roof with living plants that absorb rainwater run-off and insulate the building.
In the Cash Services Department, we completed a successful upgrade of our high-speed currency sorters and software, which help us both improve our capabilities and reduce our costs.
This upgrade was instrumental to our cash business, a highly complex operation with stringent controls and requirements. This new network helps extend the useful life of our existing sorters and provides the technology platform for future enhancements.
Nearly a decade ago, the Philadelphia Fed was tasked with evaluating the System's video conferencing service and implementing a strategy to enhance its value. Today, Philadelphia manages a video conferencing network that reaches across the nation to support the entire Federal Reserve System. In 2009, usage was up almost 10 percent, to more than 2.5 million minutes — more than 40,000 hours of video conferences — which saved participants time and travel to traditional meetings.
The latest in video conferencing technology — telepresence — uses large screens and specially configured rooms to allow meetings in which participants have all the benefits of a face-to-face event. The video conferencing team first piloted the technology at the Board of Governors in Washington and at the Richmond, Dallas, and New York Feds. The team is now overseeing the installation of telepresence rooms in other Reserve Banks. One of the best outcomes is the greater networking and exchange of ideas during these turbulent times, all without the added travel.
As our technology continues to evolve, the team continues to look for new ways to expand the service. Next, we will work to bring video conferencing right to the desktop.
These are just a few of the highlights of a full year at the Philadelphia Fed. More information about the Bank's accomplishments can be found in the Bank Highlights section.
Despite the challenges and changes we faced, the Philadelphia Fed's 2009 achievements demonstrate our ability to leverage our strengths in order to contribute to the smooth functioning of the payment system and the economy and to encourage and support our employees and constituencies even — or perhaps especially — in tough economic times.