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By Greg MacSweeney, Wall Street & Technology

Despite the approaching Federal Financial Institutions Examination Council's year-end deadline for the implementation of multi-factor authentication (MFA) at financial institutions, many FIs are still in the process of evaluating and selecting two-factor identification solutions. Some companies may still be in the evaluation phase of multifactor technology because the FFIEC's initial guidelines were purposely vague and have only recently been partially clarified with FFIEC's FAQ on its multifactor requirements.

By Cory Levine, Wall Street & Technology

Tim Buckley, formerly managing director and CIO of The Vanguard Group (Valley Forge, Penn.) has moved from the technology organization to the business, as managing director in the retail investor group. Paul Heller replaces him as CIO.

This will not be Buckley's first foray into the business side of the $1 trillion investment firm. He has previously held leadership positions within corporate planning and development, and has even worked within the retail group before.

While Buckley's move from IT to head a business unit is unusual, it's a trend that is occurring more frequently. "A lot of what we're seeing these days is the fact that technology is embedded in the fundamental business processes, to the point now that a lot of the technology people ... have to know those business processes as well, and in many cases better, than the users themselves," explains Shawn Banerji, executive director of recruitment firm Russell Reynolds Associates. “That's creating this dynamic now where technology executives more and more are transitioning to these ‘business roles.’"

Before taking on his new position, Buckley spoke with Wall Street & Technology Radio about the IT department's key initiatives, which include improving Vanguard's interactive advice engine, enhancing information security with multifactor authentication, and several projects in CRM and Web-based client service.

By Sandeep Vishnu, BearingPoint

Technology continues to play an increasing role in risk management as instantiated by the recent entry on the SOX technology burden by Brian Mitchell of JPMorgan. ERM poses a challenge from an expense allocation perspective in that every investment could be directed towards an underlying risk, and it becomes hard to separate out incremental risk-related investments. Some investments are, of course, straightforward. For example, implementing two-factor authentication to reduce unauthorized access is clearly a risk-related investment and should be counted as such.

However, a platform upgrade to increase capacity to reduce the number of dropped transactions is a business decision that addresses the underlying risk of transaction failure. Should this be viewed as an expense for ERM, the business, a central infrastructure group, or some combination of these or others?

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By Beth Stackpole, Contributing Editor

Since being honored in the 2006 Gold Book, Tim Buckley has vacated the role of CIO to head Vanguard’s retail client group and high net worth client areas. But before he left the IT role he shared some of the top technology priorities at the trillion-dollar investment firm. Among the major initiatives are improving the interactive advice engine, enhancing information security with multifactor authentication, and several projects in CRM and Web-based client service.

By Cory Levine, Wall Street & Technology

The financial services industry's effort toward secure authentication for online financial transactions was bumped up a spot or two on the old to-do list last week. The Federal Financial Institutions Examination Council (FFIEC) released a list of frequently asked questions, clarifying some of the lingering issues surrounding last year's guidance on risk-based authentication. Meanwhile, the Financial Services Technology Consortium (FSTC) announced its intentions to improve how financial institutions authenticate themselves to users, to curb phishing, pharming, spoofing and malware attacks.

By Brian Mitchell, JPMorgan

Why has SOX become such technology burden?

In year one, SOX was a burden for all. The business had to define all of the key controls associated with financial reporting and it had to identify the key systems on which the business depends to support these controls. Meanwhile, the technology group applied a typical general computing controls assessment to those systems. In subsequent years, the situation has not improved for IT controls.

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By Beth Stackpole, Contributing Editor

Joseph Antonellis, CIO of institutional investment manager State Street, is a true Bostonian –- having held positions at Bank of Boston and holding degrees from Harvard and Bentley College. He speaks to Wall Street & Technology Radio about his plans to build out State Street’s back office outsourcing services and to deliver the next generation of the client portal, Mystatestreet.com.

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By Jessica Pallay, Contributing Editor

Philippe Bibi’s position at the top of the technology ladder at Putnam Investments is no accident. Bibi, Putnam's CTO, and his managing director of investment systems, Eric Meltzer, worked long and hard to establish themselves in the financial services industry. Together they share their war stories with Wall Street & Technology Radio.

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By Ivy Schmerken, Wall Street & Technology

With options quote volume growing exponentially, Bill Morgan, CIO of the PHLX is preparing PHLX XL, the options trading platform, for penny quoting in options. Also, he discusses plans to roll out new electronic trading platforms for equities and futures.

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By Jessica Pallay, Contributing Editor

Mellon Financial's CIO Kevin Shearan discusses how new sales and portfolio management capabilities support his firm's private wealth management business. Shearan also addresses internal security standards, a data center recovery makeover and how Mellon is seizing new business opportunities.

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By Jessica Pallay, Contributing Editor

Nirup Krishnamurthy, who joined The Northern Trust Co. as CTO in November 2005, is in the midst of several major initiatives including the standardization of enterprise relationship management and revamping the desktop of his portfolio managers. He shares his insights on the importance of these projects and others with Wall Street and Technology Radio.

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By Ivy Schmerken, Wall Street & Technology

The Nasdaq Stock Market is preparing to launch an intraday crossing network for block trades in Q3, says Ana Ewing, CIO of Nasdaq. Ewing says the intraday crossing network for buy and sell-side firms will compete with alternative trading systems. She also discusses Nasdaq's plans for migrating to the INET platform and consolidating data centers.

By Greg MacSweeney, Wall Street & Technology

At first glance, the security flaw within HSBC's online banking system that has been exposed by two researchers working within Cardiff University's School of Computer Science looks like another black eye for financial firms, which are battling the growing perception that personal data risks aren't being taken seriously. However, as often is the case with press coverage, the hype surrounding the flaw is probably a greater risk to HSBC than the actual security flaw itself.

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By Beth Stackpole, Contributing Editor

Lord, Abbett & Co. CIO Michael Radziemski returns to the Gold Book in 2006 and shares his top three projects. He is currently involved in custom development of fixed income modeling and trading systems, enhancing and adding capability to the firm’s Web site, and improving information security. He speaks about this and more with Wall Street & Technology Radio.

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By Cory Levine, Wall Street & Technology

Steve Rubinow, CTO of NYSE Group, worked his way up from having a hand in every aspect of multiple Silicon Valley technology firms to heading the construction of the Hybrid Market -- one of the most talked about changes to the New York Stock Exchange in its 200-plus year history. He talks to Wall Street & Technology Radio for the Digital Gold Book 2006 about his journey to NYSE Group and his current priorities at the exchange.

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By Beth Stackpole, Contributing Editor

Janus Capital Group CTO Andrea Young says a new management reporting solution and CRM upgrade are at the heart of Janus Capital Group's quest to streamline operations. In an effort to make it easier and to have more timely access to information that supports critical decision making across Janus Capital Group, Young and her team are also in the midst of building a financial metrics and reporting system.

By Mike Everall, CISO, DrKW

Yes, we have all seen the seminars and training camps and white papers, such as: "This is how you manage risk!" The trouble is there are as many ways to "manage" risk as there are pundits and white papers. So, I say let's get back to basics and get the fundamentals laid out. What is risk? What are the types of risk? And when is a risk not a risk?

What is a risk?
A risk is when an active (or potentially active) exposure by your organization creates an adverse impact. This doesn't mean that passive risk doesn't exist: If you "passively" don't do something you can expose the organization just as badly as if you "actively" do something.

What are the risks?
There are many specific types if risk, but at the end of the day the four basic classes are: Financial, Operational, Reputational and Regulatory. Some argue that regulatory risk can be folded into the first three, but it makes it easier to explain regulatory risk to a non-professional colleague if you split it out.

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By Ivy Schmerken, Wall Street & Technology

CME CIO Jim Krause says the exchange is expanding its Globex electronic trading platform to handle energy futures, options and foreign exchange. Krause also discusses the CME's partnership with Reuters to trade foreign exchange cash instruments on Globex. He discusses how CME is keeping up with the growth of its transactions, and sustaining Globex's reputation as a reliable, fast system.

By Greg MacSweeney, Wall Street & Technology

A survey of more than 200 governance risk and compliance (GRC) professionals, 37.8 percent of whom represent financial services companies, reports that the majority of respondents believe their IT departments aren’t meeting the GRC needs of the business. Fifty-five percent of respondents to the survey by the Open Compliance and Ethics Group and GRC solution provider Axentis indicated that their technology departments had a poor understanding of GRC technology demands. Participants with the least-favorable view classified themselves as legal, ethical or regulatory compliance professionals. Within this group, only 28 percent rated their IT departments’ understanding of GRC and its associated needs as above average.

In the financial industry specifically, however, IT might be doing a better job than the overall industry. In this survey, less than half of the respondents were from financial firms. With the financial industry being so focused on risk management, one can only hope that its IT community understands the importance of controlling technology risk.

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By Jessica Pallay, Contributing Editor

Later in 2006, ISE’s SVP & CIO Daniel Friel says that the exchange will launch a Midpoint Match facility for stocks, to be followed in 2007 with a fully quoted equities market. Friel says the ISE is also upgrading its technology infrastructure as it prepares for the sweeping changes of Reg NMS, and is looking very carefully at international growth opportunities.

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By Cory Levine, Wall Street & Technology

ING Investment Management Chief Operating Officer Scott Fox lays out current and future technology hurdles for his business in this exclusive WS&T Radio Special Edition Podcast. Fox is out to improve risk management, enhance the trading system, and develop new product lines for the firm. He also intends to make a major push into the derivatives market in 2007. He speaks to Wall Street & Technology Associate Editor Cory Levine about the ways in which technology will support these efforts and others at the firm for the 2006 Gold Book.

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By Greg MacSweeney, Wall Street & Technology

In 2007, TD Ameritrade’s CIO Jerry Bartlett will also focus on increasing the advanced programmed trading capabilities for active traders as well as further developing analytics to predict customer behavior. Once the integration with TD Waterhouse is complete, Bartlett plans to continue to enhance the brokerage's business intelligence and analytics capabilities, while rolling out more functionality for both the active trader and the long term investor.

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