With volatility in the financial markets at an all-time high, firms that want to trade ahead of the competition need access to as much information as possible from more sources than ever -- in as close to real time as possible -- or risk being left behind.
To facilitate this information mining, a growing number of financial firms have started turning to mashups, Web-based environments that aggregate content from multiple sources in a single tool. In fact, a recent Aite Group report says financial firms will spend $35 million on mashup technology in 2009.
According to Adam Honore, senior analyst at Aite Group and author of the report, many firms already are using traditional content aggregators -- the type of mashup with which most people are familiar -- to create market alerts, research and trading dashboards, and proprietary fundamental data sets for trading. He added that some are also using business intelligence mashups, which operate like external content aggregators except that they aggregate data from internal databases, to create virtual deal rooms to evaluate IPOs, for instance. Then there are business process management mashups, which help institutions track ongoing management issues, facilitate change management and coordinate sales efforts.
Despite the upside, however, Honore suggests in an interview with WS&T that, with IT budgets shrinking, some financial firms currently feel that there are more-pressing areas than mashups in need of investment. This is particularly the case, he wrote in the report, if a firm's management gets caught up in the "vernacular" of Web 2.0, focusing too much on buzzwords such as "mashup" and other loosely defined concepts that can be confusing to business users. If that happens, Honore noted, the odds are that they will not look twice at the business value of mashup technology.
The Time for Mashups Is Now
But if firms consider the significant challenges the industry faces and examine mashups in the context of how they can help address these challenges and add value to the business, the time spent exploring the technology can reap significant returns, Honore continued.
Despite some financial firms' reluctance, Larry Bowden, VP, portals and mashups, at IBM, asserts that it is precisely now, in today's volatile environment, that the upside of mashups is greatest. "You can quickly assemble them and self-manage and determine where to share the information, and that puts a lot more power with the people who are face-to-face with the customer," he says.
Mashup technology, for instance, can help a wealth manager strengthen his relationship with a client by creating a personalized Web environment that helps the client track news, market data and advice pertinent to his or her holdings, Bowden explains. He acknowledges, however, that the technology required to enable this type of relationship is still at the early stages. "With wealth managers, we're just reaching the point now where we see early adopters," Bowden says.
According to Jason Jones, president of long/short equity hedge fund HighStep Capital, who has been using mashups for the past 18 months to facilitate research, the value of the technology is undeniable. "It's about correlating different data sets," he says. "You can create new data sets for things that have no historical depth to them as they've never been tracked before. You can look at the data month over month or look at yearlong trends. So as the trend gets longer, you have a better sense of the company."
Mashups Empower Business Users
Before he started using mashups, Jones adds, he could have hired programmers to create a similar tool. But a mashup, he says, allows him "to quickly figure out ways to extract lots of data from the Net. Without it, it would take days upon days to do. Now there's no way I could do without it. And you don't need to be an engineer to use it."
Automation is indeed a key factor, agrees Lokesh Seth, product VP at Connotate, which counts HighStep Capital among its clients. Mashups streamline processes and reduce the need for human intervention, he says, "So there is some ROI, some cost reduction."
Perhaps the biggest benefit firms realize, says Tim Zonka, senior product marketer for mashups at Serena Software, "is the fact that customers can assemble mashups on their own without the involvement of the IT department."Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in April 2007, Melanie lived in Paris, where she worked for the International Herald ... View Full Bio