January 23, 2007
Q: What will be the event/trend that will define financial services in 2007?
A: David Dart, Former CIO: There will be an emergence of cross-asset algorithmic trading. Rather than just a niche play, it will really come into the mainstream. A lot of firms will leverage that technology. It is a big thrust for the business, and the technology itself is coming into the mainstream.
Also, the launch of Vista. The hype will not match expectations. I wonder if we have seen the peak of Microsoft products on the desktop. I think people will be underwhelmed by Vista, and the monopoly that Microsoft has had on the desktop may begin to change.
Q: Is there any functionality in Vista that will make a difference for a financial firm?
A: I don't believe so. Microsoft has tightened up some of the security issues and there is some more functionality in there. But other than that, I'm not sure.
Q: Are there any specific players that will drive cross-asset algorithmic trading? Will buy-side firms begin to do this themselves?
A: Clearly, it is in the expertise of the sell side, but you will see a lot more of it from the buy side. It is becoming a mature business model, and it is going to be picked up by a lot of organizations. In terms of specific players, there are a number of firms. But I don't think one or two are going to dominate.
Q: How will Web 2.0 change financial services in 2007?
A: Web 2.0? What exactly is it? ... Everyone has their own take on it. My sense is that it is a great marketing term. I see it as the gradual evolution of the old-style Internet usage. Clearly, there is the talk about the Web technology being the platform, and that is a great concept. But rather than seeing a big bang and loads of Web 2.0 applications, you will see a gradual evolution into Web 2.0. But I'm not sure if Web 2.0 is going to solve a lot of problems in financial services. Maybe on the retail side you will be able to give customers more command of their data. But other than that, I don't know if it will have a large impact.
Q: What is most in demand (when it comes to IT) in the industry at this time?
A: In terms of skill sets, Web services is in high demand. By and large, there are still a lot of integration issues inside organizations, and information still doesn't flow efficiently. There is always a need for concise and consolidated data, especially in the larger banks. In many cases, they are still operating as independent silos.
And people that have actual experience with virtualization will be in demand. Virtualization has been a big buzzword, but not many people have actual experience with it.
Q: What emerging technologies or business strategies will have the potential to change the industry in 2007?
A: Again, a lot of algorithmic trading will be evident in 2007. Now, algorithmic trading has become popular during a growth market. Will it still be en vogue in a declining market? Also, we see an emergence of consumer electronics that impact the business. For instance, wireless networking was once considered a consumer technology; now it is being embraced by the business.
Also, software as a service will be important in 2007. It never really took off before, but the technology has matured and people are more comfortable with the concept. It will be an important option for smaller firms, such as hedge funds, that do not want to build a large back office. Instead, they will subscribe to a service that has the expertise.
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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).
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Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology.
