The Challenge: Wireless holds tremendous potential for financial-services firms, but implementing it across an enterprise is no easy task. Organizations must determine the best applications of the technology, find a way to integrate it with their legacy systems and then secure it all.
Gene Fredriksen, vice president of information security for Raymond James, knew the time had come to roll the wireless dice and introduce the technology to the more than 2,800 employees at the firm's head office in St. Petersburg, Fla. "Basically, what we're seeing across the industry is a tide of wireless. As soon as you can go down to Best Buy and get the technology off the shelf, it's hard to stem the tide of it coming into your company. You can only resist it for so long."
Wireless' use among financial-services firms currently ranges from WiFi hotspots for on-the-go employees to alerts for retail and institutional customers. CIOs are busily preparing their infrastructures to ensure that when wireless becomes very relevant to the industry, they will be able to make the transition.
Indeed, wireless technology is becoming ubiquitous. Consider that today's laptops and PDAs ship with wireless connectivity built into the units, and that retailers sell wireless routers for less than $75. It's estimated that more than three million U.S. households have a wireless network.
Also, the number of hotspots where one can gain wireless Internet access is rising exponentially. A recent Forbes article on wireless fidelity (Wi-Fi) reported that the number of wireless hotspots worldwide exploded in the seven months between August 2003 and March 2004: Free hotspots have jumped to 1,988, up from 253, while fee-based hotspots rose to 34,832, up from 11,024. Additionally, research firm IDC predicts that worldwide revenue for wireless LAN equipment makers is expected to hit $3.72 billion by 2006. And, the global market for wireless infrastructure consulting, integration and management services will reach $37.42 billion by 2006, an annual growth rate approaching 15 percent.
Ed Kountz, an analyst at TowerGroup in Boston, says that in the capital markets space, a year ago people were piloting wireless and test-driving it. "At this point in time, the pilots, in most instances, are being integrated into the IT architecture and IT budget planning process."
Pejman Roshan, a product line manager who is responsible for the financial services sector at equipment maker Cisco Systems in San Jose, Calif., says, "We're seeing a mixed bag of deployment. Some firms are very progressive and are installing the next generation of technology, and some are slower on the uptake." But they are adopting it, he says, noting that even those firms that "flat out refused [to consider wireless] are now evaluating and doing pilots."
TowerGroup's Kountz says that when it comes to wireless, "The first issue in any kind of network extension is how do you integrate this back into the network architecture." The second is, How do you do it in a secure fashion and manage it once it's installed?
Jon Erickson, vice president of network architecture for Fidelity Systems in Boston - which is deploying wireless in several locations - says that when it comes to the network, "Wireless is a complementary access service." As such, firms want to avoid creating a second or parallel network to their wireline system, he offers. Think of it as an extension of wirelines. But it's an extension that presents many pitfalls.
Wireline is a secure network, says Ken Evans, vice president of product management at Tampa, Fla.-based Fortress Technologies, a wireless security solutions provider. "Large corporations have spent years understanding their network infrastructure and applications and how employees use them. The challenge is extending the edge of the network to places unknown."
While wireline is a closed network, wireless invites devices to join it. "You need to move that security bubble out to cover those devices and protect them," Evans says. As well, you have the issue of wireless access points (WAPs). It can take hundreds of them to establish a proper wireless infrastructure across a large enterprise. Those, too, need to be configured and monitored, similar to the desktop environment.
Interoperability among WAPs from different equipment makers and between the devices and the networks simply adds to the IT management headaches. Evans notes that without a central hub overseeing the wireless network, "Managing security at every single access point can become an administrative burden."