Forty floors up in Morgan Stanley's Times Square headquarters, the conference room provides a panoramic view of the New York City skyline. But, with issues like risk management, security and client technology offerings on his plate, Guy Chiarello, Morgan Stanley's chief technology officer, is keeping his eyes focused on the future. For Chiarello, the No. 1 reason Morgan Stanley has the opportunity to differentiate itself from other financial-services firms is the alignment of its IT operations with the business.
"Our organizational culture has been developed around an offensive mind-set, with innovation as a critical underlying theme," says Chiarello, who's also CIO of Morgan Stanley's Institutional Securities Group.
There's no easy measurement of business-technology innovation. That's why Wall Street & Technology is publishing the Financial Services 40, below, a listing that highlights companies in the banking, investment and insurance industries that have a track record of innovation. The listing is derived from the InformationWeek 500, an annual survey by WS&T's sibling publication that recognizes innovators across industries. From cutting costs to improving operations to seizing new business opportunities, here is how some companies in the Financial Services 40 are making technology work for them:
At Morgan Stanley, one aspect of technology innovation is providing a better understanding of risks. This year, Morgan Stanley created a position, called IT risk manager, that pulls together all the issues that underlie risk for a technology organization. This includes document and instant messaging retention, data security, market and credit risk, operating risk and compliance with Sarbanes Oxley and Basel II.
"Whether it's data security, security around client technology offerings or overall operating risk, risk management - and all it encompasses - now requires greater focus," says Chiarello.
With 36 percent year-over-year growth in net revenues for Morgan Stanley's sales and trading business, Chiarello sees the firm's ability "to process the business at a significantly lower cost, or price point, as a tremendous global competitive advantage," he says. In equities, which is an increasingly automated marketplace, Morgan Stanley is working toward developing what it calls its trade-plant-related projects. "These are fast-paced, high-scale execution systems," says Chiarello, who notes that they encompass automated pricing engines, sophisticated basket and derivative technology, and software for trading sectors and arbitrage.
In fixed income, Morgan Stanley doubled the size of its fixed income IT application development group. "About 65 percent of the development activity taking place in fixed income is new development," he says. "In my experience, that's an unprecedented level of activity, but it's activity that's necessitated and driven by business opportunities and requirements."
Ivy is Editor-at-Large for Advanced Trading and Wall Street & Technology. Ivy is responsible for writing in-depth feature articles, daily blogs and news articles with a focus on automated trading in the capital markets. As an industry expert, Ivy has reported on a myriad ... View Full Bio