With their ability to foster online collaboration and build user communities, Web 2.0 technologies -- including wikis, blogs, RSS feeds and social networking sites such as Facebook, Linkedin and MySpace -- are attracting millions of people every day. In a bid to stay ahead of the curve and reach investors where they spend their time, Wall Street firms also have been exploring the Web 2.0 landscape: some cautiously while others have jumped in wholeheartedly -- making their applications more compelling to their clients and their employees.
The list of financial firms deploying Web 2.0 applications, both within the enterprise and externally, is growing. TD Ameritrade, Bear Stearns and Wells Fargo all have announced new 2.0 applications in the last few months. "Enterprise social networking is still in its exploratory stages," observes Matthew Nelson, senior analyst with TowerGroup. [Ed. note: At press time, Nelson left TowerGrouo to join Omgeo as director, market intelligence.] "But it is going to become standard. The industry simply can't afford not to go this way because that's the way people in general -- employees and customers -- are shifting."
Since investors often look to confirm their trading ideas with other traders, the collaborative nature of Web 2.0 is a perfect fit for the trading community, asserts Jay Pestrichelli, who heads TD Ameritrade's active trader group. "Traders aren't sitting alone in their basements, in silos, trying to make money," Pestrichelli points out. "Some of the best traders I know have other traders they talk to -- they share strategies. It makes them better traders."
With the aim of helping clients generate trading ideas over the Web, TD Ameritrade recently joined forces with online community PredictWallStreet, incorporating it into its own Web site. The tool enables TD Ameritrade clients to research, track and share opinions about the market. In addition to predicting the movement of a stock or index, PredictWallStreet also allows clients to view quotes, while a direct link to a trading ticket on TD Ameritrade's site enables them to actually buy or sell the stock. >>
"If we invite 1,000 clients in a room, they will start sharing ideas, talking about ways to seize market opportunities," relates Pestrichelli. "That's why communities are such a big deal. Talking about their trading successes is something clients like to do."
To further build communities, TD Ameritrade also has teamed with Minyanville, whose Buzz and Banter blogging tool delivers ideas and analysis from 30 Wall Street analysts as the market moves. Rather than simply delivering traditional reports or market snapshots, the tool goes one step further: It allows clients to watch conversations among analysts unfold, and to read analysts' updates and opinions in real time.
According to Pestrichelli, TD Ameritrade also has started exploring the use of Web 2.0 within the enterprise itself. "Most of that research is coming on the heels of our intranet site. Some of the things we're looking at are internal blogs and wikis to help with training, as well as video to help communicate messages and get away from global E-mails," he says. "We want to clean up everybody's inboxes and drive them to our intranet."
Wells Fargo also has been developing Web 2.0 tools, experimenting with internal blogs, wikis and RSS feeds. The bank has more than 100 internal blogs that it uses to improve communication and coordination among its own employees, as well as for employees to interact with customers. "We use our blogs to communicate when we have a new product we're rolling out and to share what we're hearing from our customers," says Danny Peltz, EVP, wholesale Internet and treasury solutions, at Wells Fargo. "Our executive leadership have also been using blogs to instill values and touch more people across the company," he adds, pointing out that the bank has 16,000 employees scattered across 50 States.
Last spring, Bear Stearns launched a Web portal, Bear View, based on Ajax, a Web-development technique that speeds data exchanges with a server in order to make Web pages more interactive. The portal supplies investment tools and services to its largest brokers, dealers and investment management customers. The company used General Interface, an Ajax tool from Tibco, to build the Bear View portal, which allows investment managers, equity traders and currency brokers to access a range of services in one place through a single interactive interface. In addition to streamlining money transfer processes and giving investment managers the choice of 70 currencies, the Web site also can provide real-time market data; quick access to contact and client lists; and real-time information on holdings, trading positions and account balances.
According to TowerGroup's Nelson, who authored a recent report on Web 2.0, Dresdner Kleinwort also is among the leaders in Web 2.0 adoption. The investment bank, Nelson's report notes, has been using blogs and wikis internally since 2005.