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Getting women into technology roles: still a work in progress

The technology gender gap is still not closing quickly enough, according to research by recruitment firm Search Consultancy.

Following a deep dive into ten years’ worth of data, Search has revealed that women are still struggling to break through into the traditionally male-dominated world of technology.

Focusing on key roles within the ICT and technology sector, Search discovered there has been little movement in the number of women occupying the positions. There have though, been some exceptions.

The data shows that in 2007, women made up 13.6% of all workers put into IT roles. This figure has climbed by only 1.8% in 10 years to 15.4% for 2017.

And looking at the specific roles women are securing, there is still a long way to go to level the playing field.

  • In 2007, only 9% of Manager/Leader positions were obtained by women. For 2017, the figure stands at just 14.8%.
  • Other key figures showed 10% of all developer roles went to women in 2007, a figure that has climbed just 4.8% in 10 years to 14.8% today.
  • Perhaps most disappointing is that the number of female engineers has decreased since 2007, where the figure stood at a respectable 20%. Today that figure has dropped to a mere 5.8%.

Amidst what is a decidedly depressing set of figures, there is some cause for optimism. Year-on-year comparisons across the same period from 2016 to 2017 saw an increase in female appointments into Director roles. Indeed, nearly a quarter of Directors (22.2%) placed by Search were women, a healthy jump from zero in 2016.

Donna Turner, Director of IT Recruitment in Scotland reflected on the findings, “It’s clear from the research there is still much work to do in creating some gender balance within the IT sector. Search has always had an unwavering commitment to gender equality in all workplaces, and though progress is slow, we mustn’t lose sight of the fact that, for the most part, the female presence in IT is growing.

Donna said: “We have to accept that, for whatever reason, it is predominantly men who are attracted to the IT sector, and that is reflected in the data. It is incumbent on schools and businesses to do more to make the sector a more attractive option for women. In the meantime, we will continue to do everything we can to help realise the ambitions of those women who are clear that IT is where they see their future.” 

 

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The financial sector comes around to the cloud

After initial hesitation, the financial services sector is warming up to the potential of cloud computing. The use of private and public cloud is growing exponentially in the space. Why? It’s due to a number of factors coming together.

A better development and deployment approach

Not surprisingly, it was the large internet companies and SaaS providers, such as Facebook, Google and Amazon, that that were first off the mark when it’s come to cloud adoption and benefiting from the innovative opportunities that these new ways of working provide.

Benefits include being faster to market with new products or initiatives, and increased agility in their ways of working. By adding automation to their cloud processes, these companies have been able to garner benefits such as improved flexibility in capacity to manage peak demands, and hence greater uptime in availability of services, as well improved automation allowing reallocation of expensive staff resources to more value-driven tasks, rather than wasting time on the mundane or routine.

In the financial services sector, many have similar pain points and have been aware that they too can benefit from these more agile ways of working. However, they have been slow to move to the cloud due to concerns over security, especially because of the high sensitivity of their data, whether it is trading information or clients’ personal information.

The development processes and tooling used have evolved by learning from the trailblazers, taking note of potential pitfalls to avoid and good ideas that might fit their own requirements. This new development approach uses a combination of tooling and processes, including tools like Platform-as-a-Service (PaaS), Continuous Integration (CI) and continuous testing architectures, based on Service-Oriented Architecture (SOA) and deployment based on containerisation.

The production environment can be a fixed IT estate or a dynamic cloud environment. This phased approach has largely allowed firms to tackle their concerns as they take their first steps into the cloud.

Peaks & troughs – efficient supply

Capital markets companies process vast amounts of information and are very time sensitive. Genuinely, time is money, and delays in market data, trading execution, pre- and post-trade risk calculations and pricing, clearing and settlement and regulatory reporting are all highly time sensitive. In the world of fixed IT estates, time criticality meant that the production estate needed to be large enough to cater for the very busiest periods, even when these only happened infrequently (peak days in the month like non-farm payroll day, ECB announcement days, etc).

Combined with the need to hold a suitable Disaster Recovery (DR) capability, this translates into a large amount of heavily under-utilised computing power for most of the time. Typically, we are talking about servers running at less than 20% utilisation over 95% of the time. Datacentre space is expensive, so that translates to huge wasted cost.

Quicker and easier

Ease and agility are two of the major hallmarks of cloud. Like many other industries, financial services are changing rapidly. Cloud makes it easier to develop and deploy web-based solutions and mobile applications for the digital world. It makes it easier to centralise support services and maintain infrastructure and just generally respond to changing business needs without procuring new hardware.

The answer is in the clouds

By using the DevOps techniques together with the problems of under-utilisation, the trading companies are now starting to use more flexible environments which can grow in capacity when the demand is there, and reduce when it isn’t. Initially, there was concern about running the trading engines in the public cloud, but the growth of either in-house cloud or private cloud means that security issues can be overcome.

Data centres have previously been described as complex, expensive and inefficient, but by adopting the cloud as part of their IT estate, businesses can benefit from the elasticity and ROI such a structure can provide, while maintaining confidence in being able to deliver constant uptime of services. What’s more, it doesn’t have to be a black and white, either-or choice: different systems can be migrated to the cloud gradually, reducing risk and diminishing fear of the plunge. That’s why the financial services sector is waking up to cloud.

By Guy Warren, CEO, ITRS 

 

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City Network brings OpenStack cloud hosting to the financial services sector with Canonical

Mark Baker, Field Product Manager at Canonical.

City Network is the first European hosting provider to offer Openstack to its customers. This is the largest deployment of Openstack-based public cloud nodes in the world and is a key step forward in putting core banking systems into the cloud.

City Network has partnered with Canonical to give the option to sell Ubuntu Advantage on to its own users. This opens up additional revenue streams for City Network, and enables its customers to enjoy direct support from Canonical. Johan Christenson, CEO of City Network, said: “Banks and insurance companies demand a very high level of security and support. So being able to offer Ubuntu Advantage is critical for us.”

So far, City Network has transitioned seven data centres over to Openstack on Ubuntu, and is already seeing considerable benefits it claims. Since Ubuntu is so much easier to work with, City Network’s employees are significantly happier. The company’s operating costs are also lower, and it is able to pass on these saving to its users.

“Recently, one of Sweden’s leading banks engaged us to host the infrastructure for the heart of their business,” confirms Johan Christenson. “This is the first time City Network will be hosting the mission-critical applications of such a large bank, and Ubuntu was essential in securing the deal. Like us, Canonical are nimble and fairly priced – so together we can provide the flexibility that the bank requires, combined with compliance and value.”

“We’re delighted to be working with City Network to bring the OpenStack platform to the financial services sector,” says Mark Baker, field product manager at Canonical. “OpenStack on Ubuntu meshes perfectly with City Network’s tailored, agile approach to the cloud, and it’s so rewarding to see positive results already for employees and customers alike.”

There has been a huge rise in the popularity of infrastructure-as-a-service (IaaS). Yet, for many businesses, stringent laws and regulations make it difficult to adopt IaaS while remaining compliant. This is a problem in particular for highly regulated sectors such as financial services, but with the EU general Data Protection Regulation looming, compliance is becoming an increasingly widespread concern.
Today, agility is the key to business success. Companies in every industry are striving to deliver new services more quickly, and they are constantly looking for ways to increase the pace and cost-effectiveness of innovation.

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Some New Year predictions – starting with the customer

 

Financial services will become more reliant on customer experience

With the rise of open banking in 2018, there will be an even greater emphasis on Financial Services (FS) organisations to use customer experience as a means of differentiation in an increasingly level playing field. The end consumer will gain even greater control and access to their own data, and third party tools will start to break down the siloes between different banking groups. If Financial Services organisations want customers to continue to consolidate services within their one group, they will have to do more to win their loyalty through outstanding customer experience

 

Finding the right balance

We should expect them to continue to find the right balance between security, simplicity, convenience and innovation. Many of the above aspects are in direct competition with each other – for example, the quicker and more frictionless (i.e. the more convenient) you make a payment system, the more susceptible it is perceived to be open to fraud and security concerns. As consumers of other products outside the FS world continue to benefit from greater innovation and in a lot of cases simplicity, FS organisations need to follow suit and keep up, while at the same time allaying security fears that inherently come with the industry.

 

FS organisations will stretch the limits of CX

In my opinion, further blending a personalised experience with an increasingly tech and mobile heavy experience will become crucial for FS organisations. If these companies can find the right balance between the convenience of technology, with the personalisation of the human touch – especially needed on low frequency, high-value purchases –  this is where they will excel.

 From Ross Durston, MD Financial Services, Maru/edr:

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Banks need to overcome the ‘digital’ obstacle:

Thanks to the rise of digital channels, online accounts and investments in banking apps, banks have already successfully transferred many customers online, which has helped to bring an element of personalisation to the banking experience. But in their move to digital, banks face a key obstacle in that they don’t get to see or interact with their customer very often now that the majority of banking is done remotely and online. Their challenge is to map key customer journeys through their business to identify real moments – or “hotspots” – where they cannot fail. Doing this will also help banks to better understand where they have an opportunity to differentiate themselves.

Steve Brockway, Chief Research Officer, Maru/edr:

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Security by design

Google’s discovery of a flaw in the architecture of Intel and other chipmakers’ products highlights the urgent need for security vigilance when designing technology. Time and time again, we see how failure to design in security from the beginning, whether into software, hardware, or firmware, puts our data, our health and our privacy at risk.

“GDPR-like ‘security by design’ has not been the default position to date and we must take steps to make it so. It is therefore imperative that organisations make targeted investments in people, process and technology, to ensure we truly are secure.

“Google is an excellent example of this, undertaking independent research is to find flaws in technology whether hardware or software.  In parallel, Sonatype has continuously invested in research to discover vulnerabilities in millions of open source software components, which comprise 80-90% of a modern enterprise application. These investments make it possible to quickly disseminate actionable information to help control and remediate these issues while keeping innovation moving at DevOps-native speed.

Derek Weeks, vice president and DevOps Advocate at Sonatype

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Cryptocurrencies: Is your compliance team ready to monitor the new wave of trading?

For those unfamiliar with Bitcoin, here’s a brief primer. Created in 2009 by an unidentified software developer and inventor who goes by the pseudonym of Satoshi Nakamoto, Bitcoin is a form of digital currency that’s created and held electronically. Bitcoins aren’t printed like traditional currency; instead, they’re produced by a network of ‘miners’ who create Bitcoins using a complex algorithm. The network of miners and machines (servers) operate independently of any central authority, government, or middle man. The miners receive Bitcoins as a reward for creating them. As they’re created and purchased, the coins are stored in a digital wallet and can be used for transactions, which are then tracked through Distributed Ledger Technology, also known as the Blockchain.

Why all the hype?

Bitcoin made its first appearance on Wall Street on December 1, 2017, when Bitcoin futures were traded for the first time ever on the Chicago Board Options Exchange (Cboe). In its impressive debut, Bitcoin’s price rallied, surging 26 percent, even causing a temporary shutdown of trading.
On December 18, 2017, Bitcoin took its place on an even bigger stage when the Chicago Mercantile Exchange (CME), the world’s largest derivatives exchange, rolled out trading of Bitcoin futures, which is likely to attract the attention of major institutional investors.
Today, Bitcoin is classified and taxed as a property by the IRS (not a traditional asset like gold or stocks), but CME Group’s Chairman Emeritus Leo Melamed stated that he sees Bitcoin eventually emerging as a new legitimate asset class and business line for investment banks, with futures trading being the first step toward Bitcoin’s mainstream acceptance.
Other firms jumping onboard the cryptocurrency craze include Goldman Sachs, which has said it’s exploring the possibility of creating a trading operation exclusively dedicated to Bitcoin and other digital currencies, and Fidelity which is rolling out a new digital assets business that “enables Bitcoin and blockchain users to track their investments alongside their more traditional investment categories, like stocks and mutual funds.”

The Future of Digital Currency: The Implication for Investment Banks

Even though Bitcoin is not yet an official financial instrument subject to U.S. trading regulations, it’s fair to say that futures trading and growing investor interest in digital currencies will eventually drive new regulations.
Whether this happens in the next year or a few years down the road, investment banks that trade in Bitcoin futures will also need to invest in technology to monitor communications around these new transactions, to identify and prevent market abuse, fraud and collusion. Even absent regulations and fines, the reputational damage that can result from nefarious actions is reason enough that firms should start making preparations today to equip compliance teams to monitor future communications around cryptocurrency transactions.
That said, cryptocurrencies such as Bitcoin could pose a great challenge for compliance teams around the world if they eventually become an official exchange-traded asset class.
While cryptocurrency trading is designed to be electronic and transactions are clearly reflected in an open ledger and verifiable via the blockchain, extensive verbal communications may also be necessary for trades to take place given the complexity of some cryptocurrencies including Bitcoin. Investment advisors are especially relevant given recommendations for buying and selling cryptocurrencies like bitcoin are not available in the traditional research departments. And herein lies the problem. Beyond retail investors, the new digital currency ecosystem also includes a complex web of competing miners who work outside of the purview of financial firms, and today, outside of any regulations. This means that automated, systematic means of surveillance of these communications will be all the more critical to preventing market abuse.

Sharing market news online

Another factor to consider – financial firms have strict guidelines and commonly accepted methods for sharing market news online about equities and other financial instruments. But there are no such guidelines around cryptocurrencies, despite the fact that many retail Bitcoin investors routinely follow social media for commentary, investment news and information.
Still, misinformation spread via tweets, etc., could unduly impact cryptocurrency market prices. This means that financial firms who trade in cryptocurrency will also need to take extra caution by imposing new guidelines, and implementing new tools, to monitor various types of communications, including social media. To do so, firms will need solutions that can natively connect to social media sources, ingest information and correlate it with other communications and trade data.
With the groundswell of interest around Bitcoin and other cryptocurrencies, preparing for this new wave of trading is something that firms should consider sooner, rather than later.
By Daniel Fernandez, Analytics Product Manager, Communications Compliance, NICE
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Cloud: It’s when – not if – for today’s businesses

Cloud is now enterprise-ready

The concept of Cloud is now firmly established among corporate decision-makers. But, rewind ten years, and the mere mention of Cloud would have been met with a furrowed brow. Times have changed, and for many, the adoption process went from never, to maybe, too – we need it now.

This main catalyst is that today’s world needs a new approach. For companies trading in complex markets like commodities, price fluctuations, increasing regulation and geopolitical uncertainty are the new normal. Add in increasing operational intricacy and an explosion in structured and unstructured data volumes, and it’s clear that a technology that enables precise risk management, scalability and data-enriched transparency is a must.

For firms exposed to these markets, the possibility of Cloud has largely been dictated by the availability – or, until now, the unavailability – of solutions that offer the rich functionality they need.

Ready for the enterprise

Now, a truly enterprise-level trading, treasury and risk management cloud solution exists. Breaking down the siloes between these functions will profoundly transform the way companies respond to customers, manage risks and run their business.

A Cloud solution means less hardware to manage, freedom for IT teams to focus on value-added projects and the ability to match operating costs with business demands in a much more agile way. It means a platform that’s built to address today’s security challenges, with Cloud operations typically offering much more robust, expert security than on-premise installations.

But the transformation goes much deeper. With a cloud solution that combines exceptionally rich functionality with vast, almost unlimited, computing power and extreme flexibility, traders and risk management departments are empowered. For the first time, the infrastructure can scale to meet peak demand, and scale back again. Firms have the resources to complete analysis of, and report on, previously unimaginable volumes of data, faster, to understand current VaR or P&L, without relying on an overnight run based on yesterday’s positions. They’re able to manage volatility in real-time. And they’re able to act on accurate real-time views of risk and take full advantage of the opportunities presented. Actions that were simply a pipe dream until recently.

A springboard to the future

From a finance perspective, Cloud provides the springboard to shape how the business operates, by providing accurate data to the Board to influence decision-making – data that has for too long been largely unavailable. This enables firms to develop strategies and carve out competitive advantages without being constrained by long lead times, or the costs and bureaucracy required to scale up their infrastructure and support capabilities. For the first time, CFOs can rely on the data they receive to get an accurate picture of cash flows and liquidity when it’s needed. Treasurers can shift their focus towards the annual capital allocation process, earnings and capital at risk. All of this makes it a far more strategic function.

Ultimately, the need for agility, scalability, security and flexibility will only be met through Cloud deployments. In the near future, on-premise alternatives will struggle to deliver what a modern firm needs, and in a very short time, companies will have to search far and wide for reasons not to move to the Cloud.

By John E. O’Malley, CEO, Openlink, in conversation with Marco Scherer, Head of IT, Uniper

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Mobile wallets in India: What the world can learn

India’s emergence as a digital payment powerhouse is an unlikely story. Until recently, cash accounted for 95% of transactions, 85% of workers were paid in cash, and 70% of online shoppers chose ‘cash on delivery’ as their preferred payment option.1 Yet, the Indian mobile wallet market is set to grow by 150% over the next five years, with transactions totalling $4.4 billion.2

Even though its circumstances are unique, the regulatory, technological and commercial drivers of India’s digital payment revolution reveal important lessons for the delivery of compelling mobile wallet platforms around the world.

Pulling the trigger

The main driver of the mobile wallet market in India to date has undoubtedly been demonetisation. In November 2016, a national banknote demonetisation removed 500 and 1,000-rupee notes from circulation, overnight.

This accounted for 86% of all currency in India. Demonetisation has historically been the last desperate roll of the dice for failing economies battling hyperinflation or crippling public debt. This was different. The government aimed to use demonetisation as a proactive tool to promote digital payments, foster financial inclusion and promote transparency.

Whether demonetisation has been a success is the subject of an intense political debate that shows no sign of abating. Indeed, it may be many years until the impact of demonetisation is fully understood. What is clear, however, is that it has given a massive shot in the arm to Indian mobile wallet providers. For example, Paytm doubled its user base in a year, increasing from 140 million in October 2016 to 270 million in November 2017. 500 million users by 2020 is the next target.3

For banks, service providers, regulators and governments across the globe looking for ways to encourage mass adoption of digital payments, demonetisation clearly shows that directly disincentivising cash-use is effective. Whether the ends of demonetisation justify the means, however, is open for debate.

More broadly, we can also see the transformative impact of regulation. Although demonetisation is an extreme example, there are parallels between other markets. Consider PSD2 in Europe. Banks have an opportunity to capitalise on potential changes in consumer behaviour to drive adoption of new digital services, particularly in consistently conservative markets where uptake of digital payments has been modest.

Breaking down the barriers

Due to its proven ability to dramatically simplify the know your customer (KYC) process, Aadhaar (possibly the world’s biggest biometric database) has also played a critical role in supporting the development of the mobile wallet ecosystem in India.

KYC has traditionally been a face-to-face, in-branch process. In addition, KYC usually requires extensive documentation, such as full address histories and utility bills. In countries with isolated, rural communities like India, the rigours of the KYC process have prevented access to financial services and have contributed to a significant ‘unbanked’ population.

Biometric verification technologies are recognised as key to making the KYC process faster, easier and more inclusive, as they remove the requirement to present extensive documentation. Aadhaar is a perfect case in point. To date, 270 million bank accounts have been opened using only an Aadhaar ID and a fingerprint.4 Subsequently, the number of users able to access mobile wallet platforms has increased accordingly.

Financial exclusion, however, is a worldwide issue. Mobile wallet platforms should not just be the preserve of young, urban professionals. Asbanks increasingly move toward a fully mobile and digitised service experience, simplifying the KYC process with biometrics has the potential to enable wider access to innovative financial technologies.

Moving beyond ‘just payments’ 

The importance of value-added services (VAS) in driving sustained usage of mobile payment platforms is well-recognised across the industry. Beyond convenience, users need a compelling reason to use mobile wallets on a regular basis.

The continued growth of the Indian mobile wallet market demonstrates the power of VAS. Wallet platforms can be used to recharge mobile phone credit, secure loans, pay utility bills, book a holiday, buy entertainment tickets, travel on the metro, and even trade gold.

To improve the value proposition of a mobile wallet offering, banks should look to replicate the approach of delivering a comprehensive range of financial and product services within a single digital interface. Banks can leverage regulation such as PSD2 to partner with quality third-party providers, combining the products and services that consumers want and need. It is imperative banks recognise this opportunity and ­­seize the day.

The importance of collaboration

Overall, the rapid development of the Indian mobile wallet market demonstrates the importance of reactivity and adaptability. Huge opportunities await those who can successfully navigate the transformative impact of regulation, emerging technologies and shifting consumer expectations. For this reason, the ability to collaborate and learn lessons from players across the world remains as important as ever.

By Elina Mattila, Executive Director, Mobey Forum

[1]https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/wadeshepard/2016/12/14/inside-indias-cashless-revolution/

2https://www.mobilepaymentstoday.com/news/report-india-mobile-wallet-market-on-the-rise/

3https://www.emarketer.com/content/five-trends-that-shaped-india-s-financial-sector-in-2017

4https://www.bobsguide.com/guide/news/2017/Jan/30/indias-cash-crisis-is-a-short-term-pain-for-a-long-term-gain-interview-with-amit-dua-executive-vp-of-suntec/

 

 

 

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The (Artificially) Intelligent guide to steering clear of outages

If there’s one positive thing about social media, it’s that it’s keeping everyone on their toes – especially service providers. Woe to the retailer, airline, bank, etc. that can’t keep its operations running so that they are available when and how users want them, 24/7, regardless of volume, transaction level, network congestion, or any other factor.

And the users are often merciless; just ask the folks in the IT department at banks like Natwest, Lloyds Bank, HSBC, Nationwide UK, or any of the other banks that experienced temporary service outages in December alone. Angry customers who couldn’t access their accounts, move their money, pay bills, or otherwise access banking services angrily vented their frustrations, using language that would make even sailors, in an ongoing barrage of rants against the institutions.

Ask any IT person whose managers are breathing down his or her neck for answers: It’s not an experience one would want to repeat. In fact, IT personnel likely resent being the ones left holding the bag when there is an outage; they may have recommended more advanced monitoring systems that management baulked at paying for, for example. They’re forced to make do with what they have – and what they have may not be up to the task at hand, ensuring service stability and presence during times of network stress, due to extra volume, network congestion, etc.

On the other hand, you can’t blame management for baulking at investing in the latest and greatest system that might solve outage issues, as opposed to systems that definitely will solve them. Vendors wax eloquently about how their solution is the solution to, for example, cybersecurity issues, but despite the money, companies throw at these solutions, hacking is as bad as ever. You can’t blame the C-suite folks from being sceptical when it comes to outage solutions, as well.

While IT departments might dither on cybersecurity solutions, the answer to their outage issues is already at hand – in their often overlooked but always important log files. These files provide a wealth of information about everything that goes on in an organization. Data from infrastructure, applications, security and IoT areas can provide insight into CRM, marketing, ERP and other initiatives for the business – as well as provide insights into why outages occur, and what to do about them.

But parsing through log files searching for actionable insights is a difficult job – too difficult for human beings. What’s needed is a machine learning, artificial intelligence-powered log analysis system – a system that enables its users to parse through unstructured data in order to develop actionable insights. Such systems allow users to define what they are looking for with a data structure, and feature an analytics system smart, fast, and robust enough to parse through thousands, if not millions of files and data streams.

It makes sense. Just think about the installation of a new piece of network software: How many DLL’s get written, how many dependencies are created, how many config files are adjusted? Too many to count, that’s for sure – and go figure out where all those changes were made. Yet one small “adjustment” in a config file could be enough to halt network traffic for hours. With AI-based log file analysis, however, it would be possible to prevent such outages; as soon as an unwelcome change is made, the system could alert IT managers and provide them with the exact information they need to resolve the issue.

And that AI-powered system could be used to analyze log files for many other purposes – providing organizations with insights about customer behaviour, expenses, better ways to do marketing – the list is endless. What’s needed is not a “new” system that will promise to solve a problem, like outages – but one like AI-powered log analysis, that will unlock the data companies already have.

By: Dror Mann, VP of Product, Loom Systems

 

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The universal digital identity – how to get it right?

Everyone has a digital identity that represents you as a unique individual. But, says Dr Michael Gorriz, group chief information officer at Standard Chartered Bank, that which distinguishes you in the physical world is generally irrelevant to how you are identified in the digital one

The challenge for banks, technology firms and governments is how to make it easier and safer for people to identify themselves online while allowing them control over and giving consent for use of their digital identity (DI). These days, you are asked to create a new login when you apply for each new service, so you potentially have to log in your details a few times a day and remember multiple passwords. A universal DI for everything would make life much more convenient.

Passports, driving licences, birth certificates – documents that identify us in the physical world will no longer be necessary. A business trip or vacation would be a seamless experience, where passport control may no longer be required, and banking services will be a breeze because of robust and trustworthy KYC (know your customer) processes.

Some governments have taken the lead as part of their development of digital economies. With Singapore’s MyInfo one-stop database of personal data, citizens can apply for government services or open a bank account without filling in multiple forms or providing supporting documents. India’s Aadhaar project provides a unique ID to each citizen so they have access to healthcare services, education and government subsidies. It is a key driver of socio-economic development and ensures benefits directly reach unbanked pockets of the population.

The role of financial institutions

Banks need to give their customers a seamless and convenient experience. That is why Standard Chartered has participated in pioneering DI initiatives such as PayNow in Singapore which makes peer-to-peer payment easy as it only requires your national ID or mobile number. The development of a universal identity system needs robust processes to recognise and authenticate a person’s data. The system also has to work for myriad institutions with complex, interconnected operations across different geographies.

Financial institutions including banks have traditionally performed the role of custodians of data and have established cross-border operations, so are well-positioned to support the creation of DI systems. Banks are also incentivised to collect accurate data because the viability of their business depends on it.

New anti-money laundering directives and KYC rules mean regulators expect financial institutions to maintain high standards for identity verification of new and existing customers. To that end, Standard Chartered has started a proof of concept with fintech firm, KYC Chain, to improve our client onboarding process. The project, which uses blockchain technology, can recognise and verify identities of clients in a reliable way. Blockchain allows entities independent of one another to rely on the same shared, secure, auditable source of information.

Who owns the data?

Any universal identity system should allow the ownership of personal data to lie with the individual, who chooses what information to share to gain access to services. Bblockchain, the distributed-ledger technology behind the digital currency Bitcoin, has been seen as providing a potential technology solution.

With about half of the world connected to the internet, having a DI is in some quarters regarded as a fundamental human right, because proof of identity is required to gain access to a range of services. Achieving a universal DI would have many advantages but making it work would require cooperation among financial institutions, governments, technology companies and more. The benefits in terms of cost, time and user satisfaction are so great that we are optimistic a comprehensive and holistic solution may not be too far in the future.

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Reducing Reputational Risk in Trading Systems: Prevention is Better than Cure

Last week a technological glitch at the Bank of England led to delays on transactions across the whole of the UK, illustrating how technology related glitches are still very much a thing of the present. This type of issue is nothing new, and has been known to have monumental consequences in other scenarios. For example, in 2012 it took just 30 minutes for Knight Capital to lose $440 million because of glitches in newly deployed code. The incident became the infamous poster child of the perilous reputational consequences of poorly monitored trading infrastructure. The recent BofE problem, although thankfully limited to some panic around the whereabouts of a much needed January pay check, does highlight that the financial services industry still needs to prioritise creating safeguards to monitor and anticipate problems in complex IT systems.

So how can the various stakeholders in electronic trading become more proactive in minimising technological risk and protect their reputation? Part of the answer lies in better real-time monitoring.

Reputation is intangible.  A reputation can be tarnished when a bank fails to meet its expected obligations to its stakeholders: its customers, the regulatory and the public at large. On an executive level, acts that sabotage reputation include financial mismanagement and breaching codes of governance. On a lower level, poor customer service and inappropriate behaviour may pose a risk.

However, these are largely reputational risks stemming from human error or misconduct. But in an increasingly automated environment, technology is also a key driver of reputational losses. The high-octane world of financial trading is a prime example of technology’s paradoxical effects.  On the one hand, algorithms and machines can eliminate labour and make processes, such as executing trading strategies both faster and more efficient. On the other hand, when things go wrong, they go wrong in catastrophic proportions.

While the electronification of trading has created a more robust audit trail than ever before, banks’ inability to keep up with and process this information often leads to disasters.

Investment banks

Investment banks provide execution services to traders including algorithmic trading, order routing and direct market across different venues as well as, sometimes,  in-house (such as a dark pool).  The complexity of a bank’s IT operations – a myriad of numerous applications, servers and users – poses a monitoring challenge.  In addition, banks also have increasing regulatory obligations, with a growing pressure to stamp out illegal or abnormal activity and to provide more granular reporting.

In 2013, the EU imposed a $2.3 billion fine on 6 global banking giants for rigging the Libor rates.  In most of these cases, an adequate real-time trade surveillance system would have provided early notifications of illegal activities and could have minimised damage.  By analysing a combination of network data flowing through multiple systems and real-time log data from applications, banks have complete real-time visibility of trading activities.  This data can be visualised or stored for compliance purposes. By having a single pane of glass across different systems, banks can bring illegal activity out of the shadows more quickly and into the hands of compliance professionals, and not the newspaper headlines. Furthermore, they can mine this data for market intelligence on how and what their clients are trading, and use these insights to drive their strategies to achieve, and maintain, competitive edge

Exchanges

Similar to large investment banks, global stock exchanges have a highly-distributed trading and market data infrastructure. With increasing trading volumes and high-speed trading, exchanges are under pressure to optimise operational performance and to meet customer and regulatory expectations.

Exchanges must offer rapid access to liquidity and process millions of trades per second at up-to-date prices.  In order to maintain this, they must monitor their complex infrastructure in real time and correlate all order events as they encounter gateways, middleware matching engines and market data streams.  Tracking trades requires pulling information from different sources across the trading infrastructure and using high-performance analytics to calculate latencies between the various checkpoints in the lifecycle of each trade. This information can further be sliced and diced to see how execution performance varies across different times of the day, different clients and different symbols.

Poor performance with stock exchanges trickles down to the rest of the financial system, including the broker-dealers, market-makers and the end-investors.  Equally, the effects of having good technology will be felt and recognised by the wider financial community.

To a certain degree, fines, losses, and reputational damage are unavoidable and unexpected.  Firms need to act quickly to remedy and minimise damage when catastrophes occur. However, prevention is always better than cure and this is where technology comes in.  Better technology leads to better decision-making and minimising avoidable errors. It not only mitigates risk but is also a competitive advantage, giving financial institutions better visibility into what is going on in their business and how to use it to their gain.

Jay Patani

Tech Evangelist,  ITRS

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