Blinded by Blue Mist?

Earlier this week I had the pleasure of attending a talk by Ann Cairns, at the Financial Services Club, giving her personal perspective on "Managing technology change in the financial services industry".

For those who don't know, Ann is CEO of Transaction Banking at ABN Amro, having joined ABN Amro in 2002, after 15 years at Citigroup working in a number of senior positions.

The talk was given under the Chatham House Rule, so I can not reveal more than that much of Ann's content revolved around the factors driving technology change and changes we could expect to see - perhaps not so much about how to manage the changes? Ann did put up one slide representing the "Nirvana" architecture that she believes most banks are still trying to achieve. But then, out of the blue, Ann gave IBM a plug as being a vendor with a lot to offer in the middleware space to achieve this goal.

No doubt, large banks, like ABN Amro and Citigroup, are able to negotiate great commercial terms with IBM, and maybe the old adage "one never got sacked for choosing IBM" still holds true. But, surely the technology changes Ann referred and alluded to in her talk, and the speed at which they have and may occur, are about innovation and agility?

To my mind, innovation and agility conjure up an image of taking qualified risks. I can't remember where I saw it, but I am sure I also read once that "banking is about taking qualified risks" - indeed, without taking risks there would be no return. So, while I don't want Ann and her peers to see red, and I have no beef with IBM, I would suggest that they should be wary of being blinded by blue mist.

So what are the biggest risks faced by those managing technology changes in financial services?

Two of the prime candidates are surely:

Increases in revenue are not achieved as quickly as expected - Ability to innovate is lost by focusing on individual applications rather than how to deliver improved customer experience and increased visibility over processes between applications

Integration costs more and takes longer than planned - Budget and selection focus goes on application functions & features not infrastructure and delivery capability

How can we mitigate those risks? How can we transform the ability to innovate sooner and gain business value faster while dramatically reduce integration & implementation time, costs and risk?

The answers...

Look for an integration platform, providing both internal (EAI) and external (B2B) integration solutions.

Be sure it has a component based architecture built on a single platform, i.e. not a number of acquired components glued together, that allows a strategic integration platform to be implemented for one tactical project, or phase, at a time with the opportunity to leverage the same engine for future integration projects.

Confirm it uses the latest, but not bleeding edge, technology as its platform so that it provides scalability and load balancing, security, and transaction management.

Check that the solution has a business process-centric architecture facilitating seamless and incremental migration from legacy to new applications utilising a robust BPML.

And, last but not least, look for XML to be used natively throughout the solution allowing rapid integration to other systems.

In essence, be prepared to look for a solution, not necessarily from the expected or established vendor list, which will give you...

Connectivity: Securely and simply support any format/protocol to ease on-boarding and migration to new standards

Visibility: Portals providing real-time and historical insight into business operations for internal and external users

Agility: Empower business to drive change and deliver new products and increased service levels with greater innovation

Control: Minimise risk and cost of compliance by ensuring that the planned business process is the executed business process