January 24, 2007
Why It's Important: More and more financial services institutions likely will use Web 2.0 concepts and technologies -- both internally and externally -- to make their services and applications richer and more compelling to users. Banks, for example, might revamp their online banking applications as Rich Internet Applications (RIAs), enhancing usability and interactivity. According to Stamford, Conn.-based consultancy and research firm Gartner, by 2012, 75 percent of banks will use Web 2.0 technologies in retail delivery.
Social lending, in which borrowers and lenders come together without the involvement of a bank, is one financial services application that could benefit from Web 2.0 concepts. Tim O'Reilly, president of O'Reilly Media, which sponsors the Web 2.0 Conference and often is cited as the originator of the term Web 2.0, says he can envision a financial services application that would leverage other users' data to continuously improve the application.
Where the Industry Is Now: Many companies are beginning to dip their proverbial toes into Web 2.0 waters, with most using it internally at first. E*Trade already offers its customers a composite application, or "mashup," a form of Web 2.0 technology, to let them see where they might invest extra cash for the highest return. This service knits together data (the mashup) from a variety of E*Trade databases to gain an edge over competitors. Wells Fargo even joined the online gaming world by opening a virtual outpost on the Active Worlds site. The idea is simply to participate in the new online social networks, another Web 2.0 phenomenon, according to Gartner analyst Stessa Cohen.
Focus in 2007: Most financial services companies and banks will stick with experimentation this year.
Industry Leaders: Cohen cites E*Trade, Wells Fargo and Deutsche Bank as Web 2.0 leaders in financial services.
Technology Providers: Adobe, IBM, Microsoft, Nexaweb and TIBCO either offer RIA technologies or are pushing for broader RIA acceptance. Web 2.0 is both broad and new as a concept, so beware of vendors billing themselves as "Web 2.0 providers" -- this designation doesn't mean much right now.
The Price Tag: From zero to infinity. Well, that's a bit of an exaggeration. The point is, you can get started with Web 2.0 for free (by researching online communities and seeing what it's all about). Developing a full-blown, consumer-facing RIA, however, will cost well into the seven figures, as the required technical expertise is at a premium right now.
|
10 Critical Business Technology Issues for The Street
In 2007, firms will face the daunting full rollout of Reg NMS in the U.S. and the likely beginning of MiFID implementation in Europe while they continue to struggle with data privacy, OTC derivatives, a shortage of talent and the potential of Web 2.0, among other challenges.  more... |
Data Privacy: Financial Institutions Try to Keep Data Breaches Down in 2007
Several big-name data breaches made 2006 an ugly year for the securities industry, and security and privacy professionals are hoping to bring the problem to a halt this year.
In the Search of Liquidity: The Time Is Now
Now that Reg NMS is finally here, are firms ready to access 30 or more trading venues in their search for liquidity? After a year of investment in technology, firms need to demonstrate that their systems are up to the challenge.
Firms Ready to Dive Into China's Financial Markets
The opening of the huge Chinese financial services sector to foreign-based institutions presents a gamut of opportunities -- whether in retail and corporate banking, investment banking or asset management -- for North American and European firms.
The Right Stuff: A Good IT Manager Is Hard to Find
It's going to be a good year to find a new job, as the shrinking talent pool has created a strong job market for IT workers with strong business acumen.
NYSE Requests a Four-Week Extension of the Reg NMS Deadline
Although it has been beaten to death by industry analysts and press, the importance of the changes to the U.S. securities industry spurred by Reg NMS cannot be overstated. The industry anxiously awaits full implementation of the regulation in 2007.
A Market Turned Upside Down
The European Union's Markets in Financial Instruments Directive (MiFID) is scheduled to go into effect in November 2007. Even U.S.-based firms will need to have a thorough strategic plan for compliance in order to stay competitive in the global markets.
Wealth Managers Turn to Unified Managed Accounts to Better Serve Wealthy Clients
Unified managed accounts and unified managed households are part of a growing trend to electronically aggregate a client's holdings in as close to real time as possible. The goal of such cross-product, cross-institution and cross-individual accounts is superior portfolio management, including tax optimization and risk mitigation.
Web 2.0 Enriches Applications and Services, Making Them More Compelling to Users
One of the hottest buzzwords of late, Web 2.0 refers to Rich Internet Applications (RIAs) that use the Internet as a platform to create interactive user interfaces that resemble PC-based applications. Typically, RIAs emphasize online collaboration among users.
Surging Electronic Trading Volumes and Reg NMS Require Financial Firms to Enhance Underlying Technology Infrastructures
Electronic trading is exploding and firms are rapidly expanding technology infrastructure to handle the increases in trade volumes and associated market data and messaging.
SMS Messaging and Asynchronous Data/Voice Capabilities Will Shape 2007 Wireless Market
SMS and text messaging will take center stage for financial organizations that support wireless access for clients, reports Joseph Ferra, chief wireless officer at Boston-based Fidelity Investments. Those trends, combined with the introduction of asynchronous data and voice capabilities on phones, will drive increased wireless usage for financial transactions.
Putnam's 64-bit Architecture and Outsourcing Strategy Allows IT to Focus on Core Competencies
Boston-based Putnam Investments has leverage outsourcing of certain processes so business leaders and technology professionals can focus on projects that provide specific value to the business, according to Philippe Bibi, Putnam's CTO.
Web 2.0 and Data Privacy Will Define Financial Services in 2007, Says Steve Rapp, SVP & CIO, Nicholas Applegate.
The move to further protect client data and the maturation of Web 2.0 related businesses are two topics that will define financial services in 2007, according to Steve Rapp, senior vice president and CTO at San Diego-based Nicholas Applegate Capital Management.
Mellon Focused on Bank of New York Merger and new Private Wealth Management Platform
Mellon Private Wealth Management looking to take advantage of the Bank of New York's international reach all while launching a new platform that will transform the way wealth managers interact with ultra-high net worth clients' other advisors, according to Tim Tully, SVP & COO, Mellon Private Wealth Management.
Cross-Asset Algorithmic Trading Goes Mainstream, While Software As a Service Gains Traction
More buy-side firms will adopt cross-asset class algorithmic trading in 2007, while software as a service will again be en vogue, as the comfort level with the technology and Web 2.0 functionality help adoption rates, says David Dart, a former managing director and CIO Americas with a large German bank (as of Dec. 31, 2006).
less...
@wallstreettech
