The single most important message of this article is that technology does not stand alone outside the influence of its users or its creators. Often the siloed approach of many financial services firms leads to the view that technology is something ‘over there', somehow outside the system, outside the rules that govern everyone else. We are users of technology, ‘they' are the producers of technology and never the twain shall meet. We all sit within the same system. We are all part of the same environment and that environment acts like a self-regulating system with reflexive effects caused by events outside our control as well as those within it.
Our industry will spend over a trillion dollars on technology in the next five years. If we had to categorise that spend in order to figure out what the main technology management issues are, the list might look something like this:
1. Cost reduction
2. Risk mitigation
3. Resilience and disaster recovery
4. Regulatory compliance
5. Product development
6. Customer satisfaction
Some may argue that the order should be different, but with such a wide scope to look at, there will be differences for readers based on where you are in the world, the culture of financial services in that region, your firms' particular history and commercial outlook. So research into the order of such lists is less important in my view than what is actually on the list. What is clear is that technology is, and will remain, at the forefront of innovation in the financial services sector, driving new products and new services. It is also seen as the only way for many firms to remain in the business at all. Even with that level of prewarning, if warnings were needed, many will still fail to innovate or invest enough. Already the separation of the larger financial institutions from the smaller ‘boutique' firms is polarising the community as has, in technology terms, the separation of retail from wholesale banking. The advent of new disruptive technologies such as the semantic web is about to hit the financial services markets in the same way that the Internet did a few years ago.
Financial services is particularly vulnerable to such threats because of its endemic conservatism and resistance to change. It is therefore not only vital, but mission-critical that those who develop and manage technology in the financial services sector have a clear picture of the role of technology and its management in one of the fastest moving environments we face. This creates a dichotomy for financial services which is historically ultra-conservative and resistant to leading-edge change. But those who do not embrace this new approach will increasingly be left with ‘modern' yet obsolete systems. There are three fundamental questions we need to answer in order to begin the process of managing technology:
1. Meaning
2. Principles and
3. Context
We need to know what we mean by the term technology - what it is and just as importantly what it is not. Second we need to have an understanding of the principles underlying the decision to deploy a particular technology; in other words, whether and when to use it and finally we need to understand the context in which any given technology may be acceptable to a financial services company.
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Note: This article was sent to us by: Julie Hayes at 01062010
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