He Ran the World’s Biggest Payment Processor; Now He’s Taking on Social Security | Frank Bisignano

Because it wasn't that people who were more in a live 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 ways to abuse.

Today I sit down with Frank Bessignano, 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 Ficer,

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 Janja Kelleck.

Commissioner and CEO Frank Bessignano is 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,

and this is something that's been a key issue for this administration.

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?

We know fraud, waste, and abuse happens in all shapes and sizes and all dimensions.

Those are some staggering numbers but as I had said in my confirmation hearing,

I was running a company doing 2.5 trillion of payments a day.

I've been fortunate and blessed in the opportunities I've had and the people I've worked for

and now especially they're great honor to work for President Trump.

But one very simple thing was that Social Security,

we had a website that you could have a digital account on but it was down almost 20 percent of

the time by design, 29 hours a week. You might not think it has fraud, waste, and abuse,

but we now have more than 100 million digital users because in a couple of weeks really,

with testing and everything, we changed that and it was up every hour to the day.

We also ran a concept that said we're going to have a pristine control environment.

It's always important. We see 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 to think about fraud, waste, and abuse, getting payments right is the most

important thing. Being able to give the amount of money that we're following 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.

They were running batch cycles on weekends and at night and probably when it first was built,

the conclusion was okay, we'll have the data up. We can have the data up when we're running the

batch cycle, but 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. At the end sound really bad on us,

you were in Hawaii or California. If the system went down at 12, lots of people use

system on weekends and it wasn't always up. 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 one of the things I have here is that there were

12.4 million individuals on Social Security aged 120 or over. So what was happening?

I've read about this. What was happening with these people? Are they getting paid somehow or?

You know, we embarked on a project that we're at a completion of what I called was reconciling

the data. So there wasn't really a routines for reconciled data and over time it evolved.

And I thought something, call it the Social Security database, we now have built routines.

That caused us to regularly ensure that there was on it or should be on it.

And what I said was, which I 100% believe, is it wasn't that people who more and

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 that's where you're going to have

fraud ways to abuse. I said this too, are we on when asked about it? Of course,

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. I created two positions ahead of risk management and ahead of cyber and resiliency

or security or resiliency that did not exist reporting into me because the control environment

so don't I'm going to deliver a great client experience.

Hey everyone, I'm going to be trying to get some more sponsors for American thought leaders and

the reason is I want to try to get it on more of the non paywall platforms where we'll use the

sponsors to kind of support the show and one of the sponsors that I really appreciate is American

Hartford Gold. You know, these are pretty chaotic times we're not sure where things are going to

go. There has been this massive liquidity $6 trillion put into the system. We don't actually

know how all that is going to play out and I like to put my money in a very stable place that

also tends to go up and Gold is really the perfect place for that. Now Gold has had a correction

recently and that's absolutely true but again, if you look at the long-term trend on Gold,

this is the reason I invest in Gold. I'm not like a stock market trader. I like to put my money

in a place that's stable and growing and I actually think this is the exact right time to buy Gold

because it has gone down a little bit. It's a little bit cheaper but the price

in my belief is only going to continue to go up and that's what I'm actually doing. So American

Hartford Gold really is the place to do it. We've worked with them for years. We've had a great

experience working with them. They're better business bureaus certified and frankly really easy

to work with. So you can call them at 858623377. You can text American to 65532 or as always,

click the link in the description below.

So 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, Social Security is in 100%

of every American's retirement plan. So if you think about it that way. Also, it protects

the most vulnerable. We have a disability system. We have fundamentally a thousand judges that

adjudicate hundreds of thousands cases to ensure people who should get disability do.

And then 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

in executive 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 almost 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 that deserves as much attention and requires more work at the end of it because once people

are in retirement, those are not the people calling us and they ask their help. They get their

direct deposits. 99% of them, 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 what 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 at the American public. But do it

in an 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 back to that story about reconciling

the file. That's one of the main components of it. Ensuring that people are on file or citizens,

valid citizens that we have proof of. And 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. Any hints now?

Tremendous progress. And you know, the reason why we're able to drive payment accuracy over time

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 and

it has an identity implication, right? But we have, I'd give the risk team, tremendous, tremendous

grades for what they've gotten done and going through all this data and making it a priority.

And 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 manage, as you mentioned, you manage 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 is, you know, the pinnacle of my life having the opportunity to work for President Trump.

But, you know, I worked with Henry Kravitz 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 Diamond. Before that, I worked with Jamie and Sandy Wilde who was one of the

forefathers of buying companies and integrating them. So I, I straddled all the technology

and operations and infrastructure, you know, I had the responsibility as the chief administrative

officer on 9-11 for city group and had 16,000 people on low on manhand and several World Trade

Center was one of our buildings and I saw everything imaginable and never left, but we had a point

end. So I spent a lot of time on large scale operations and then running technical businesses

like the Global Transaction Bank at city group, 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 spend 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 and in the last company that I was CEO and I love saying we served

every American, I was old. I have that opportunity again here. So you, I mean, you're bringing a very

kind of corporate vision, right, to the, to, would you say that's accurate? Yeah, I would say,

I'm bringing a operational focus to it that I might have honed in all my years

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 that's going to streamline a lot of the work

that's happening. 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 by, there's a lot of 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, increased in

ability to use personal information if that were to be abused. How do you deal with that?

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. There are 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 Army Channel presence matters a lot. In this case,

Army 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 wake up in my social security account and understand exactly where you are in

your life cycle, if you're sitting on a plane and want to look at your mobile app. There's a

reason we have more than 100 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 serving them 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 they had a risk management and that's really been the group.

That's overseed that cleanup of the database and driven down the fraud numbers by

billions and then ahead 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. I think this applies. This is just the

maybe a full philosophical bit of a philosophical question, but it has a very profound operational

answer. In a role, such as yours, both on the side of the IRS and the Social Security SSA,

on the one hand, you're responsible to the people. Obviously, this is the form of government we have.

On the other hand, you're responsible to the institutions and the institutions. The goals

are not necessarily always the same. For example, increased interest in government institutions

and getting a lot of personal information. These systems can be used. I'm just very curious how

you think about that. How do we deal with that tension, if you will? Because we're heading

right into a world, aggressively, where all information is there in the cloud, so to speak.

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. I am here to serve the

federal government, led by President Trump, to the best imaginable job to drive out fraud

waste and abuse, which really, in my case, means serving the client better and more accurately.

I've always believed that you can drive efficiency and get higher client service together.

Fundamentally, when 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.

By the way, that's because we're using more technology. I love seeing technologies

great in Abor. I've done 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, it's job one for everybody to protect the information. It'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, I always, I 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 probably,

I'm really darn proud of people. And I think at the point, I'll tell you something about

is that people, you know, any 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, we were navigating hardships all the time for the people. I mean,

we have a horrible shutdown at, at, at, uh, DHS right now. Um, and so I recognized, I'm, I'm the,

uh, 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's

you mean? I said, I have a bias, the hardest working person I ever knew. My dad, my role model,

who was an orphan himself, um, worked 44 years for treasury, uh, in customs enforcement. And, uh,

so anyhow, I knew dad liked over time. Uh, and so I asked people, uh, 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, and as I say,

we went from the largest, uh, in, 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 over time. O triple B, 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, over time, you know, I get tax on it, you know, I make any 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, oh, 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, uh, a million babies born that are going to get the thousand dollars.

So start there, uh, in the next four years, you know, a child born, you know,

fill out my favorite form of 45, 47. And, uh, you can register your child, get a thousand dollars,

put in a Trump account for them. But that you can register, uh, you know, anyone up to 18 and,

you know, you begin, you know, whether, whether it's Michael Dell, uh, doing it or there's lots of

people who are, uh, putting money into the system, uh, parents using it as a savings vehicle

for their child up till 18. Um, 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 open up for their children. I'm, I think it's fabulous. I think, you know,

it's another, another form of an IRA, it's just a different concept. Right. And it, 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 know, will continue to educate them. Uh, 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.

No, on, on the IRS side, I was looking at some of the numbers, you know, we saw that the refund

numbers are up, which is, I know it's something you're going to want to talk about. Right.

Well, I think I think the, yes, the refund numbers are up and they're up in a, a double digit

percentage, um, recognizing that's one part of the tail of the tape. Uh, that's happening because

of greater benefits of a triple B. Now remember, with those greater benefits, people are going to

have less withholding in 26. So not only is their refund higher, but they're also getting more

cash in their pocket in 26 through through what the, the tax changes that were implemented.

And then there was a whole bunch of things that were, uh, going to expire, you know, small business

benefits that, uh, you know, in, in the president's great legislature. Well, I just, uh, he implemented

permanency with obviously Congress and Senate. So when you take all that and then you say the

last item is, well, there's some people who aren't getting refunds because they had other items,

capital gains, other items, and getting a full tax benefit. So the refund is one part of the

story. Then there's the permanency for things that people had that they were going to lose.

There's the Trump account and then there's withholding. So, uh, that's why it's so darn powerful.

I say, I think you said the average tax benefit is up over $780. That's the number that I see.

Yeah, it's probably up a hair more right now, but yeah. And, you know, if you think about that for

a household, uh, you know, that's, that's a really, that's, that's, that's real money. I mean,

that's a, you know, a real benefit. Um, but like I said, all of those, you know, here's a good way

to think about it too. Thank you for the opportunity. 45% of Americans who have filed and were way past

the 50% mark right now, right? So we're deep in, as I said to the staff this morning, we're deep

into the season. We're in the fourth quarter of this game, right? And if you think about it in,

in a sports term, um, and, you know, I don't think any of us thought the number would be 45% of

those who've already sent their returns and have a schedule one A. And that means that's the

percent of Americans that are getting some benefit that other than the fact that we kept

permanent, what was going to go away, but on the schedule one A, that's a stunning number.

Well, how does that, how's that different from before? Well, uh, that would be zero. There was zero.

Right? No tax on tip zero. No tax on overtime zero. Uh, the, the, the deduction for seniors,

which will, you know, I think over time is the largest subscribed seniors will probably get

the largest benefit. And then obviously, uh, no tax on car loans. So none of that existed before.

So we, is that, would you say that is your kind of, would you tell that is your biggest success

thus far? Well, I think it's, it's, you know, I'm, um, I'm just here to get the work done. You

know, this is, this is, uh, really the president, uh, weeding this and my job, uh, my job was

executed, but I will give the team tremendous success and that we did all the technology changes,

put everything in and a serving the American public better than before. And by the way, guess

what they are doing using our online capabilities digital first, right? The ability and not,

we're getting less phone calls this year than last year because people have online capabilities

that we built. In the past, um, there's been examples of the IRS being kind of weaponized as a kind

of a tool. I'm wondering, you know, this is something that, that, you know, I think existed at some

level, at least when, when you came into your role, um, how, how, how are we dealing with that?

Is that, is there, you know, it goes back to, uh, you know, at the end of the day, our job

is to uphold the law, right? You know, we're, uh, we're, we're multi-dimensional organization.

We serve the American public, uh, we're financial services, uh, but we have to make sure everybody

is doing what they're supposed to be doing. And, um, you know, I think it's another great

opportunity that you'll see happen over the next two years of us applying technology to

leave out people to decision-making, not just work, right? So when you, you find out, and many times,

you know, uh, uh, we can help people better do their taxes better. And I also believe that,

you know, the tax preparers have a responsibility here. And, uh, I've had very good receptivity from

them in terms of, uh, us getting together and talking about how they could do a better job.

So that, uh, taxpayers have all the right information and can be a hundred percent compliant.

Uh, we enter, remember, we have a usually compliant system here. We have a usually compliant system.

Um, um, and some people don't always, you know, just get it right. And that's a symbol era.

And then sometimes it's more complicated situation. That's a very, very small, small minority.

It's not the majority. Okay. Well, just, so what I was thinking about specifically, like,

there was, there were examples. And I think this happened at some scale where there was, you know,

going to favoritism for certain types of nonprofit entities or lack of favoritism for others.

And so it was kind of a, there's, there's a human element in it, right? Well, that's where,

that's where I really believe technology can, uh, cover a lot of ground and present the cases

appropriately. And then you're going to get solid decision making and you'll be able to actually

have much better information. I guess it's a paper, there's, well, not it, so I guess technically

it's not a paper trail, but it would be, you could track it better as this idea. Yeah. I mean,

like, look at, uh, the amount of things we could do, you know, everybody, everybody gets concerned

when you use the word AI, except I don't, it's technology, the clouds technology, AI's technology,

years ago, local area and networks is technology before that main brains.

We're just talking about technology as a great enabler and it'll make our workforce better.

It'll help people be more compliant. It'll help tax preparers be more compliant for their people,

which they really want to be, uh, and to get a better outcome and a higher compliance rate.

So back to the SSA for a moment, um, one of the things that I see keep coming up, um,

and I just like to understand for the record, the reality of it is this, you know, that social

security is going to become insolvent in a not too long distant future. At least that's the narrative,

right? And, and I under, I've seen all sorts of different explanations as to, yes, it's true. No,

it's not true. It's partially true. Can you kind of set the record straight for me? What's,

what is the situation? Well, I mean, the last report, but he actually said, you know,

in, you know, call it seven years. If nothing is done, uh, people get paid out at 83%,

not 100%. So that's the first thing because some people think it's zero when you say solvency.

Now, the practical issue is the president has been very, very clear. He's going to protect and

preserve, and he's going to protect preserve and strengthen, right? And so, uh, there is no

vision of zero occurring here. But the first thing that had to occur, in my opinion,

as the commission of social security, get the books on record, right?

eliminate fraud waste and abuse, serve the American public in a manner they're being served,

which gets them to feel we have a modern day system. And then, obviously, this all gets solved,

you know, by Congress, right? And so, uh, I have high confidence. I had high confidence coming

into the job. I always believed the job was root out fraud waste and abuse found billions of dollars

from that. Uh, deliver a great product for the American public. It's going on right now. It will

continue to go on and, uh, give, give out lawmakers what they need to make us good solid decision.

And just so I get it, like, in a, kind of, in a nutshell here, um, you, you mentioned that you

were able to find billions of dollars in that waste, fraud and abuse. Can you just kind of summarize

for me where that came from? Well, it's fundamentally on proper payments, you know,

we'll sit around the table on Monday and go through a series of risk factors and we'll always

be on how we drive in proper payments higher, right? I made the point when people would say it's,

you know, it's 99% accurate. You know, I, oh, well, it's supposed to be 99.99999999. That's

the place I came from. And that's in billions come out of that? Yes, sir. That's astonishing.

Well, it's hard to, I mean, you would understand that given your background, right?

I'm just fortunate to be here and I just want to serve the, the President's administration

to the best job I can. I guess I would. But the bottom line is you're saying through efficiency,

you found this. Well, that's, that's accuracy. Oh, okay. Okay. Right. When you have a file that has

all types of people on it that maybe shouldn't be on it as the President had identified, right?

I mean, that's any tip of the iceberg thought, right? So we don't go around publicizing the cleanup

of the databases, right? We don't go pointing fingers and blaming people. I've always believed

let's go get the job done and then we'll tell people the outcome. As we finish up soon,

what is it that people should be watching out for both in terms of, you know, social security,

if that's where their minds are or tax season and IRS related work? Well, you know, I don't know

that I'd say it's watching out as opposed to capability. What capabilities should be people looking

for from both of these organizations? Because I talk about digital first. Well, I think first,

you know, if you go to the social security website, you open my social security account,

you've just opened a whole digital channel to operate through that. If you didn't have,

if you weren't one of the hundred million who have one, and I'm pretty darn proud of that number,

by the way, because it wasn't that number when we started at all, if you're not, you should have it.

It's a capability that you can access 24-7. I think the same for the online capabilities,

we offer at IRS, everything from where's my refund to, you know, people's tax accounts.

It's all available. And of course, we're always thinking about how to make our websites better,

our presence better, how do we digitize it better. But the capability that's getting used right

now on both is but used by, you know, hundreds of millions of times a year. And so I'd say,

digital first, but know that we're a phone call away or a personal visit away in either one of

those anytime you want it. Well, Frank Bessignano, it's such a pleasure to have had you on.

All my pleasure, thanks for having me. Thank you all for joining Commissioner and CEO,

Frank Bessignano and me on this episode of American Thought Leaders. I'm your host, Janja Kellek.