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Beyond Compliance, Toward Innovation

This year's Securities Industry Association's Technology Management Conference & Exhibit, themed "IT Matters," could have as easily been called "Nobody Wants to Go to Jail."

This year's Securities Industry Association's Technology Management Conference & Exhibit, themed "IT Matters," could have as easily been called "Nobody Wants to Go to Jail."

Kicking off the day today are sessions that include titles such as "E-mail Archiving/Retention," "Patriot Act Compliance" and even one called "Common Crimes in the Financial Services Industry." That's the effect a year rife with scandals will have.

Last year the SIA's theme, "The New Reality," reflected on an industry that was still smarting from the dot.com bust, the disaster of Sept. 11 and the poor economy. This year's content shows an industry that is trying to regain its composure after many of its own have been fined, even indicted, after failing to comply with the rules of the game.

Walking the show floor, Patrick Gordon, principal consultant with Compliant Systems Consulting, notes that of all the compliance issues, financial institutions are having the most trouble with e-mail compliance. "It's e-mail and instant messaging where all the confusion lies." Gordon says that institutions "are trying to sort out what the SEC means by having to save everything as it relates to business as such."Evidenced by the number of e-mail-related exhibitors at the show this year, he says, "The market is now flooded with e-mail vendors, something that was not so this time last year."

He points out that it's not just archiving that needs to be done but supervision and surveillance. "Vendors are now trying to differentiate themselves on surveillance, but it will be a while before it is all sorted out." Vendors such as Legato (booth #1852), KVS and Entelagent are differentiating themselves along these lines, he notes.

Figuring out how to comply with rules that have been recently introduced or reinterpreted may be a pressing topic this year, but perhaps not so at future SIA shows. Gordon says, "E-mail has crept up on us very quickly, but we will be at the trailing edge of it this time next year."

As it has been year after year, some of the hottest topics at previous SIA shows are non-existent one year later. Last year, T+1 and remote computing were hot topics. This year, they are hardly mentioned during the conference tracks.

The panel discussions and the exhibitors this year seem to be getting away from the back-to-basics mentality of last year's show and are once again showcasing innovative technologies.

Vendors such as IBM (booth #2417) and Intel (booth #2501) touting grid and on-demand computing, along with sessions focusing on Linux, outsourcing and biometrics could be a sign that the industry is leaving behind some of its past baggage and starting to focus on future growth. After visiting exhibits for about two hours, Michael Burnette, first vice president market-data services, Morgan Keegan, agreed that there are a lot of innovative technologies being displayed this year.

"There seems to be a lot of video-conferencing technology this year. And yes, a lot of e-mail-compliance vendors, but we've already taken care of that at our firm." As for grid computing, after conferring with a colleague, he and Burnette agreed that this concept has been around for a while in other forms. "We're not trusting it just yet. At this point we think it's a lot of hype."

Burnette notes that no matter what innovative products are at the show, people are still not going to spend on gadgets. We just have to spend smarter. We can't just spend to spend."

He says that despite the compliance issues, the industry may be heading toward brighter days. "I think the economy is turning around a bit." But regardless, he notes, "We've got to spend on technology. It is our infrastructure after all."

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