The emergence of new technologies is changing the operational models of bank IT.
We all knew that cloud would be a game changer, even if its ascent has been a rather torturous one. From the dissection and dissemination of the very concept - a process that took years─through to the more mature developments and deployments that it's seeing today, it's definitely changed not only the presence of hardware and traditional computer models in banks, but also how we perceive data. Coupled with the emergence of big data as a concept, information as a whole has become the most important asset that an IT department enables.
I say enables, because it's not always the sole provider of information. That's generated at the source, such as front-office activities, handled by accounting systems, position engines, risk models, reporting caches and more, but it all uses the avenues provided by IT through a firm's architecture. Increasingly, though, a lot of information is being generated outside of that architecture, thanks to cloud in part, at third-party vendors or outsourcers.
Service Liability Agreements
The increasing importance of service providers, whether they provide cloud or managed services, to the IT ecosystem has also changed the way in which their offerings are contracted. It's not just enough to have a service-level agreement (SLA) that promises five-nines uptime and a vague promises of 24-7 support, any more. Consumers are more demanding, and more informed, asking for a range of assurances and evidence that a network or service can, in fact, provide what it offers.
A while back, I went on a tour of London's Victorian sewers, where fiberoptic provider Geo Networks has its cabling dozens of feet underground. At the European Trading Architecture Summit (ETAS) last week, Geo's CEO, Chris Smedley, told panelists how his customers will now sometimes walk the entire length of the network to check that it does extend as far as they say. I only walked around fifty feet in either direction, which was enough, and I can safely say that making your way through 20-40 miles of sewer is a mark of dedication.
That's a pretty extreme example, of course, but the enhanced forensics on a company's practices before taking on a service are well known. With issues such as cybersecurity at the fore now, firms want to know about security procedures at a vendor (including biometric identification for data access, now), about supply-chain integrity, about staff backgrounds, and who will be allowed access to what at which times. There's an element of covering your own back side to this, as well─should problems develop, a firm can demonstrate due dilligence, hold its hands up, and say it's not to blame.
A while back, I went on a tour of London's Victorian sewers, where fiberoptic provider Geo Networks has its cabling dozens of feet underground. At the European Trading Architecture Summit (ETAS) last week, Geo's CEO, Chris Smedley, told panelists how his customers will now sometimes walk the entire length of the network to check that it does extend as far as they say.
SLAs, therefore, and the operational procedures built around them, are definitively changing along with the way in which information is both transmitted and received. The standard of service, too, is altering. And rightly so. Banks are sometimes outsourcing entire processes to third-party firms, and regulators such as the Financial Conduct Authority (FCA) in the UK are justifiably concerned.
This is more important than ever in the realm of big data, where regulation is mandating a huge increase in data storage (and retrieval), as well as starting to look at the processes around how data is collected─its lineage, if you will. Having a tight control over the way in which services and infrastructure are provided therefore stretches further than going above and beyond best practice, and into the harsh light of necessity.
James and Anthony talk about the looming Sibos event in Toronto and take a look at some recent M&A activity and blockchain developments in the capital markets.Subscribe to Weekly Wrap emails