During a CIO roundtable at Waters USA this morning, BlackRock CTO Scott Condron bemoaned the lack of innovation by West Coast technology suppliers for producing solutions for enterprises like his. One such supplier in the audience took exception.
"I think we all go to the West Coast once a year and one thing we continue to find is very little innovation seems to be suitable for the enterprise that has both a regulatory regime and a consumer trust relationship that's mandated in the law," says Condron. "They're still not focused on that stuff."
Credit Suisse front office CIO Adam Broun agreed that innovation has been focused on consumer technology, particularly in the realm of interactions such as social media, and not enough on large regulated enterprises.
The audience member, founder of a West Coast startup, countered that those solutions are not being delivered because the East Coast firms are not communicating what their requirements are.
"It's a two-way street," he said. "The technologists need to know what you need. Only then can they provide that to you. So that's a concern. The fact that we have to come out to the East Coast to figure out what we need is an indicator."
Earlier, JPMorgan Worldwide Securities Services CIO Richard Anfang had mentioned that his firm was saving money by insourcing tasks that had previously been assigned to more expensive third-parties. As a potential solution to the supplier problem, though, he pointed out that insourcing is not a way to completely circumvent it. There has to be a balance.
"We have tens of thousands of vendors that we as a firm deal with, so the likelihood that we're going to be able to do everything ourselves is mathematically impossible," he said. "At the same time, you really want to understand what your reliance on vendors is and how that puts delivery service at risk. Where do you have single points of failure, where do they not have resiliency, everything from a Verizon central office switch flooding during the hurricane to accounting scandals with HP. You need to think about your vendors and manage the execution risk. That doesn't mean you take no risk and try to insource everything, because that's untenable and you miss out on innovation. On the other hand you can't take blind risk and put the lifeblood of your services in the hands of somebody else that you don't have good control over."
Anthony and James talk about how regulators in the US are falling behind other nations' regulators, the lack of talk about Reg AT, and an SRO for cryptocurrencies.Subscribe to Weekly Wrap emails