A Conversation with Legg Mason’s Mike Abbaei
Abbaei: We can review transactions (and) the history of accounts. A corporate-wide data warehouse will allow us to do a number of things. First, from a marketing perspective, it will allow us to be more accurate in our marketing strategy, and to give our marketing department better information regarding our accounts and prospects. But secondly, and just as importantly, it will allow our compliance department to have better, more accurate and faster information regarding transaction activities.
WS&T: So, the corporate-wide data warehouse will greatly help you comply with multiple regulations?
Abbaei: Yes, we are doing a number of separate projects to comply with all the regulations. But, hopefully, wrapping it around a data warehouse makes it a lot easier and faster to manage and get information.
WS&T: What have you done to address specific regulations?
Abbaei: We put in solutions for all the regulations that have come down. For example, we have a solution for anti-money laundering, for books and records regulation and for Sarbanes-Oxley. But they are all solutions for a very specific regulation, for a particular need, but then after that, they will all feed into this data warehouse to make sure we have an overall view of corporate solutions.
WS&T: We seem to be coming out of a tough environment. Wall Street earnings are up. Yet, the theme I'm hearing in the industry is to do more with less. Do you think that's still true?
Abbaei: Because of the market conditions and the economic conditions, we're all forced to be more creative than we used to be in the past. It's true that we are all committed to doing more with less. But it doesn't mean the number of transactions has gone down. It doesn't mean the volume has gone down or demand at the service level has gone down. In fact, if anything, they have gone up. On top of that, we've had more regulations and compliance items. So, there is a lot more to do with less. But it has forced us to be more creative and to come up with solutions and (form) partnerships with our vendors who understand the economic environment and can be creative in addressing these things.
WS&T: Given that you have to be more creative and that you are partnering with vendors, are you embarking on any other changes, such as server consolidation or looking at Linux?
Abbaei: We have looked at the possibility of utilizing different operating systems. We have put in, for example, Linux. We revisited requirements on hardware. We have changed our direction from one hardware provider to the other. And we're going to continue doing that.We've gone back to a number of our providers in telecom and market data on various different costs. We re-negotiated our contracts, and are able to work with them as partners to come up with a win/win situation.
WS&T: What kind of areas do you find Linux is effective?
Abbaei: We have installed Linux mostly (in) Web-related areas. We haven't explored Linux for the trading desk. But I think the time will come that Linux will be able to support that fully, or at least technologists will feel comfortable enough with Linux to utilize it for mission-critical systems.
WS&T: We've heard so much about STP. Some firms have made great strides, but yet some people are saying that STP is dead. Do you have specific initiatives directed toward that?
Abbaei: We have a subsidiary that I'm responsible for called AMTS - Asset Management Technology Solutions. That subsidiary provides an offering (in a format that speeds up) technology and securities operations outsourcing for asset managers. Within that subsidiary, we have a number of initiatives that are related to STP. We see more and more of our clients and prospects looking at the STP initiatives, not necessarily because of any regulation, but because of the efficiency and reduction of errors. And the technology we provide for the most part is there to hook up all the entities in a real-time basis.
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
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