Bank profits have plummeted and client investment has not yet recovered to pre-credit crunch levels. But the rising number of data transactions, compliance work and the mobilisation of the workforce means there’s plenty of work to be done on IT infrastructure.
Rise of the middlemen
Systems integration is the City’s answer to the relentless drive for efficiency and the joining together of banks and institutions – and this is an IT task. Organisations that were huge just got huger such as the merger of Lloyds and HBOS, who joined forces to leverage value.
Getting together means building common platforms and standards - often within a timetable of a couple of years - and calls for a massive integration effort. Regulation provides a further impetus to integrate in a pincer movement of pressure: “Banks can’t be run in the same ‘silo’d’ way as previously”, confirms PJ Di Giammarino, founder of IT and finance think tank JGW.
The IT team is the architect, builder and ‘middleman’ of these vast integration projects. Different back-end architectures have to be mashed together, and customer-facing products integrated functionally while sometimes retaining separate brands at the front end.
“In a couple of years’ time, a customer with a Halifax mortgage and a Lloyds credit account may be supported by the same Lloyds banking system, all squirreled away from consumer view,” points out Alyson Reeves, partner with PA Consulting Group.
Back office boys and girls
In the back office, managing infrastructure and storage capacity is a critical task. Moore’s Law, which says that computing processing capacity doubles every two years, applies to other components of the IT infrastructure including storage. However as more applications become web and customer facing, demand is exceeding even this rapid rate and the back office team in City institutions are constantly challenged to ensure applications are kept up and running.
The other factor heaping the pressure on storage is more rigorous compliance. “It’s no use dumping data on a tape drive and sticking it in a vault for two years. Now the regulatory people may want to see seven years’ worth of data”, points out Sean Winter, senior storage manager of international brokerage firm, BGS Partners.
Sean’s job is a virtual high-wire act, balancing cost against performance and risk. He ensures that there are no performance glitches from applications unable to access relevant data, and he also makes sure that data is stored in a lifecycle, which links accessibility to the likelihood of it being called up.
He increases capacity through a combination of consolidation and upgrades. Recently BGC implemented a storage area network (SAN) of Brocade servers, which have eliminated failures and can also provision higher priority or peak time performance to customers.
“However, we don’t want to be at the bleeding edge, “says Sean. Stability is the primary objective, not fixing bugs for suppliers’ new kit. “Storage has an elevated status within the infrastructure and the IT department, although it’s not getting glamorous yet.”
Mobile masters
A big IT change sweeping through the financial markets is that users are becoming more mobile and applications are being made easier to consume. For security specialists, ITC Global Security, it’s one of the hottest topics around.
“Banks are proving their workforces with the ability to access corporate applications from any device, whether it’s the iPhone, a Blackberry or a remote PC”, notes Tom Millar, CEO of ITC.
Banks are naturally conservative when it comes to new technologies and have not been pioneers of cloud computing. But pressure from the board means top executives in banking want access to customer contacts and management reports, too.
While it may be cool and increasingly common to access email, scanned documents and reports from the cloud, there remains a clear blue line between these and mission critical applications. There are no trading applications in the cloud, and securing any cloud-based service is a big responsibility for banks.
In securing IT infrastructure at least, banks are at the vanguard: If you want to be at the forefront of multi-factor authentication and ‘armoured browsers – browsers within a browser – banking offers a field day.
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