Introduction:
For financial services firms’ integration is a watchword. Numerous articles have been written citing the need for better application and system. For many it is ultimate straight through processing dream. Several initiatives have been kicked off by but with limited success – why?
The issues:
The lack of an industry standards body is one issue. A lot financial software available was born out of private necessity and then productized and marketed. Other vendors follow the tried and true software method of “throw and stick”. Let’s throw it out at the market and see how many firms it will stick to.
Bad behavior:
Unbelievable as it may sound in this age of advanced technology, it seems rare that vendors deeply research the market at the user experience level. The user is where the rubber meets the road. It is the user who has to live with the product on a daily basis. Winning the users' heart and mind is as important as winning over the purse string holder. This is a key to producing an industry winning solution. For example, consider Apple Computer. Apple wins consistently in their niche because they build what appeals to their users.
Money can usually find a way around integration issues; however this is not an effective way to solve the issue. Our industry is surrounded by governing bodies and standards. Ubiquitous technology standards such as those governing email, web servers and the Internet itself are launch points for a much higher level of integration.
Today our industry cries out for better data integration. "Why do I have to enter the same information two, three or more times?" There is not one good reason for it. Data hostage taking has long been an effective client retention tool. Times have changed however, and instead of creating retention, a rift is being formed. This method of retention does not result in partnership, it is reduces the relationship to client versus vendor. Your data is your property and you should be able to do whatever you want with it. Vendors are obligated to provide you with access to your data using industry accepted standards.
The way it should be:
Consider the case of integrating CRM, portfolio management, trade order management and a client portal. At the very minimum you would expect that once you populate your CRM system that client data pertinent to the other systems should be immediately available using standards-based published interfaces.
With the appropriate data and messaging available to the discrete systems, we can now identify communications and dataflow requirements. The portfolio management system can now query the CRM system asking to synchronize data. The same holds true for the trading system and so forth and so on. The goal is data sharing between systems from the point of origin thereby benefitting all systems. The technical result is the de-duplication of data, reduction of errors, removal of stale data and so forth leading to a fully integrated system. The end result is a streamlined operation bringing high-impact efficiencies of scale to your business operation.
A solution:
The communications industry and most notably Internet technologies have employed a very successful process is known as the Request For Comments (RFC.) RFCs are presented to the whole panel of members including industry peers and vendors. When enough comments are received a sub panel is elected and the RFC goes into motion as a potential sponsored work. Once details are fleshed out sponsors are sought from within the panel. The sponsors provide resources necessary to bring the technology to life. What has been the result? The very technologies you depend upon every day from email to web browsing and everything that makes it possible. This system works and it can work in our industry. It can make integrated systems a cost-effective reality.
What do you gain:
The gain in efficiency brings benefits to all levels of your business. Reduction of time expended in repetitive and error prone manual data entry opens the doors to new opportunities. Time and opportunity to improve client contact resulting in higher client satisfaction leading to valuable referrals; research to promote new products and services and so on. Each of these benefits bringing greater value to your firm and your clients. Other immediate gains include positive effects on your staff enabling them to engage in satisfying work while improving their skills, boosting morale and thereby bettering your practice.
Thursday, October 01, 2009