Rao Chalasani has built his career on a foundation of technology and development risk management strategies. A resident of New Jersey, he has worked at mega corporations in New York, NY, such as Bank of America (BofA), JPMorgan Chase, and Merrill Lynch. At Merrill Lynch, Rao Chalasani served as risk management strategist and chief technology officer (CTO).
On the surface, the role of a CTO seems simple: choose and implement technologies that facilitate success for a company. Below the surface, however, the specifics run a gamut of responsibilities. A CTO may be able to choose a third-party solution for the company, such as a database program to keep track of customer accounts and inventory. When such solutions do not exist, or when existing solutions do not provide the functionality the company needs, CTOs must lead the research and development (R&D) of a proprietary solution. In either case, CTOs need to adhere to standards and regulations.
CTOs must also be aware of tech trends and news that could affect the company’s bottom line. Toward that end, CTOs must monitor and evaluate emerging technology in order to determine if it should be brought into the fold, or passed over in favor of other products. CTOs communicate their decisions to their managers, as well as to partners, investors, and employees.
Specializing in business and technology, New Jersey resident Rao Chalasani worked at Bank of America (BofA) in New York, NY, in the capacities of director of trading in risk management and business, and chief technology officer (CTO). At BofA, Rao Chalasani’s responsibilities comprised developing and implementing a company-wide risk management platform.
Risk management is a wheel with many spokes. Depending on a company’s goals and needs, risk management experts may invoke strategies such as risk acceptance, risk avoidance, and risk transference. Risk acceptance does not involve any mitigation; companies choose this option when they do not want, or do not have, resources to spend on implementing other strategies. They accept the risks and forge ahead, hoping that achieving success proves worthwhile.
Risk avoidance lies at the opposite end of the spectrum. Rather than brace for impact, companies spend resources on any and all actions that can mitigate risks. As a result, risk avoidance is usually the most expensive risk management strategy.
Falling somewhere in between risk acceptance and risk avoidance, risk transference involves the responsibility and ramifications of a given risk being handed to a willing third party. Examples include outsourcing operations such as customer service to other businesses, rather than handling it in-house. Risk transference works best for companies willing to admit that a particular operation is not its forte, and should be handled by more knowledgeable parties.
A senior technology executive with more than two decades of experience working within the financial sector, Rao Chalasani most recently served as the business CTO and director of trading risk management at Bank of America-Merrill Lynch in New York, NY. Currently residing in New Jersey, Rao Chalasani created the Enterprise Risk Management System while at BofA, in addition to assisting with global market trading. He still enjoys following markets in his free time.
Global equity markets recently experienced a sharp drop due to the dollar index hitting a four-year high, indicating a potential loss in earnings. The dollar index rose 6.3 percent to 85.485, causing many oil and commodity prices to decrease. It also created a sell-off on Wall Street that dropped the S&P 500 benchmark index by 1.6 percent. Companies within the S&P 500 earn up to 50 percent of their revenue from overseas, so the large gain seen on the dollar index will greatly impact their earnings for the quarter.
The euro also saw changes, falling as low as $1.269 on the trading platform EBS. This was largely the result of the increased yield gap between German and U.S. bonds, which plays a key role in exchange rates. As a result of these changes, Wall Street stocks dropped by over 1.5 percent, pushing the MSCI’s all-country index down 1.2 percent. The Dow Jones industrial average and Nasdaq Composite also lost points, closing down 1.54 and 1.94 percent, respectively.
Holding a bachelor of science in engineering from New York University’s Polytechnic Institute, Rao Chalasani has contributed his technical knowledge to such notable financial firms as JP Morgan Chase, Deutsche Bank, and Bank of America (BofA). The New Jersey resident maintains a commitment to philanthropy, supporting charities such as Doctors Without Borders and Childreach. In 2002, Rao Chalasani partnered with Sakhi for South Asian Women, an organization dedicated to ending domestic violence, to establish a scholarship in memory of his late sister, Swarna Chalasani.
Sakhi sponsors an Economic Empowerment Program to help survivors of domestic abuse achieve financial independence. The program helps prepare women for the workforce, offering ESL instruction, technology classes, and workshops on financial principles, entrepreneurship, and employee rights.
The Swarna Chalasani Economic Empowerment Fund is included within the Economic Empowerment Program. Created to honor Ms. Chalasani’s dedication to Sakhi and the empowerment of domestic violence survivors, the fund helps women reach both their academic and professional goals. Sakhi distributes an average of 20 awards of up to $1,500 during two yearly grant cycles. These provide financial aid for educational and vocational expenses such as tuition, books, and certification or licensing fees. The women benefitting from this support have gone on to complete bachelor’s and master’s degree programs in fields including computer science, social work, and biomedical engineering.
A former chief technology officer and risk strategist for Bank of America (BOFA) and the Merrill Lynch New York office, Rao Chalasani specialized in global markets. In addition to providing New York and New Jersey-based businesses with insight into risk management and other concerns, Rao Chalasani supports a number of charities, including the Sankara Eye Foundation.
Based in Milpitas, California, the Sankara Eye Foundation provides eye care for patients in India. It currently operates in eight hospitals throughout the country. Through fundraisers and individual donations, it has provided free surgeries to over 140,000 patients. Its mission is to eliminate curable blindness in India by 2020.
According to the foundation, India has the highest instance of blindness — one-fourth of the world’s blind live there. While 45 million Indians have visual impairment and 12 million are completely blind, 80 percent can be cured. With public support, the Sankara Eye Foundation hopes to stanch India’s blindness epidemic, one patient at a time.
The digital nature of banking and investment transactions today means that risk managers (or risk strategists, as they are sometimes called) must possess fluency in technological systems that facilitate investment and trading. In addition to managing financial risk, a risk manager must identify and account for potential systemic threats. In other words, risk management involves a determination as to the risk level of certain loans and trades, as well as an analysis of potentially risky online and offline systems that allow those loans and trades to go through.
When working in international markets, the role of a risk manager becomes even more complex, as factors such as political instability, inflation, currency fluctuation, famine, and drought enter the picture and influence the viability of various financial transactions. Juggling these risks requires sound and far-reaching knowledge. Technological advances mean that risk managers may depend upon software to help them, but human instinct will likely always be a big part of the job.
About Rao Chalasani: A former Chief Financial Officer and Risk Strategist for Merrill Lynch and Bank of America-Merrill Lynch, Rao Chalasani has focused on global markets and credit, real estate, and structured products. Rao Chalasani is the sole designer and creator of the scalable “Enterprise Risk Management System,” for which a patent is pending.