Attractivematter Broker-Dealers Are Competing to Attract Clients with High Performance Electronic Execution and Clearing Across Cash and Derivatives Markets

banking technology

www.bankingtech.com

APRIL 2012 APRIL 2012 Attractivematter Broker-dealers are competing to attract clients with high performance electronic execution and clearing across cash and derivatives markets.

The payments guy VocaLink’s new boss is looking to the future Keep taking the tablets The iPad continues to drive developments New rules for old Forget the regulatory constraints – start servicing the customers On the record FSA rules on recording mobile phone traffic are still causing problems Contents In this issue April 2012

16 28

4 news 28 keep taking the tablets There are other tablets in the retail and commercial 7 news analysis banking space, but the ipad is still leader of the ■ Swift: Going for growth in a borderless world. pack when it comes to new apps.

10 Cover focus: attracting the buy-side risk & regulation Broker-dealers are competing to attract clients with execution and clearing across markets. 30 news 32 news analysis transaCtions & PaYMents ■ AMl: no rest for the wicked – or the righteous …

15 news 33 on the record 16 news analysis Nearly six months after its introduction, the ■ ipS featured a lot of talk about pricing models. requirement to record mobile phone traffic in the trading environment is still the cause of 17 new rules for old controversy. Banks must work with corporate clients to ensure they understand changes in industry dynamics. it & oPs

Markets & investMents 35 news 37 standards Focus 19 news interest is growing in Swift’s MyStandards. 22 news analysis ■ regulatory issues drive sell-side iT spend. 38 interview: David Yates retail The new chief executive of Vocalink talks about the opportunities facing the organisation. 23 news 26 news analysis 41 appointments ■ personal touch key to banks’ future plans. 43 industry columns & comments ■ Grounds for complaint. 48 out of office

www.bankingtech.com I 1 Contents In this issue April 2012

16 28

www.bankingtech.com I 1 eDITORIAL COMMeNT April 2012

editor David Bannister, +44 207 017 4019 [email protected] Future tense People have been telling me about new Regular Contributors Dan Barnes, Sherree things all my life. As a child in the early 1960s DeCovny, Alison Ebbage, Tom Groenfeldt, refrigeration was new, as was having our own Eugene Grygo, Graham Jarvis, Heather McKenzie, Nicholas Pratt, Kristina West phone. At secondary school in the first half of the Production Kosh Naran 1970s, handheld personal electronic calculators were new, ferociously expensive – £500, which Press Releases Send relevant releases to would get you a reasonable amount of ipad today [email protected] – and banned from the exam room. Group Sales Manager Neil Hartley, Just imagine how many new things people +44 203 377 5385 have shown me since i joined the staff of Personal [email protected] Computer World magazine in 1978. Honestly, it’s a lot. Senior Sales executive Leon Thomson, +44 203 377 3493 it used to be earnest young men with beards and boxes that had lots of wires sticking [email protected] out of them, then came polished slightly older men with orthodontic smiles and nice suits. (The wires still seemed to be a problem; they never seemed to have the right one, events Manager especially if printers were involved.) Gemma Healy, +44 207 017 6752 These days they don’t seem to carry boxes, but that’s because they’re carrying [email protected] copies of the books they’re trying to sell – even those who describe printed magazines as “ipad apps that don’t work” still publish hard-back books about the digital future. Marketing and Circulation Kira McKinney, We used to call them Futurologists and you could spot them a mile off because they +44 203 377 3958 [email protected] would start the answer to every question with: “Well, i don’t profess to have a crystal ball ...” Most of them would have been more convincing - and probably a damn sight Subscriptions and Renewals John Browne, more accurate - if they had produced a crystal ball or a copy of the i Ching. +44 207 017 75171 (“paperless office? it’ll happen about the same time as the paperless toilet,” used to [email protected] be a standard response till those canny Japanese invented the paperless toilet.) For Reprints and Web Publishing Rights The old-school futurologist had another stock phrase: “i’m used to being cast in the Please contact Leon Thomson on role of prophet without honour ...”, but this seems to have been replaced by the more +44 203 377 3493 robust “you’ll be hearing from my lawyers”. Bearing that in mind, i’d just like to say that i have have no axe to grind with these ©2012 Banking Technology people - from the working journalist’s point of view they are excellent value: you can All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or report their theses and get a free book into the bargain. Then you can do an end-of year transmitted in any form or by any means, electrical, round up of who got what right, and who didn’t. in a year or two, one of them will be mechanical, photocopying, recording, or otherwise famous and you can re-run the copy. without the prior written permission of the publisher. Trust me, that’s what the digital future means for the majority of media - just look at Banking Technology is published 10 times a year 24-hour rolling news on the television. by Informa Business Information, a trading division However, after a lifetime of new, i reckon i can distill it all into a few points: of Informa UK Ltd, 1-2 Bolt Court, Fleet Street, ■ technology changes things London, EC4A 3DQ, UK. ■ technology change is accelerating ■ businesses will be affected by this, in ways that are not yet clear Printer: Wyndeham Grange, Southwick, UK. ■ there will be winners and losers: which do you want to be? Subscription enquiries: Customer Service Dept, ■ Okay, then: to be a winner, you need to know [insert title of book here] Informa UK Ltd, Sheepen Place, Colchester, CO3 There we are. Strangely comforting, i find. The future will be different: it certainly 3LP. Tel: +44 (0)207 017 5540, Fax: +44 (0)20 seems to be getting shorter. BT 7017 4614, Email: [email protected] Annual Subscription: UK £690, Europe €860, US/ rest of world $1,235.

Member of the Audit Bureau of Circulation Average net circulation for the period 1st July 2010 to 30th June 2011 – 8,171

ISSN 0266-0865

David Bannister, editor

an informa business

www.bankingtech.com I 3 eDITORIAL COMMeNT April 2012

Member of the Audit Bureau of Circulation Average net circulation for the period 1st July 2010 to 30th June 2011 – 8,171

ISSN 0266-0865

David Bannister, editor

an informa business

www.bankingtech.com I 3 Go to www.bankingtech.com for the latest news and comment

NEWS NYSE Euronext clarifies clearing plans April 2012 YSE Euronext has outlined its recognised Clearing House in london to “in addition, new revenue streams will European clearing strategy and be completed, licensed and operational accrue from 2014 from NYSE Euronext Nimplementation plan, detailing by the summer of 2013. The clearing of continental derivatives clearing and Monetise pays Iran sanctions raise questions over how it will use its NYSE liffe derivatives all of NYSE liffe’s london contracts will from other new post-trade business clearing platform to consolidate all of move into the new rCH then. opportunities including OTC clearing.” $173 million to future role for Swift its European derivatives into a single Clearing for NYSE Euronext’s derivatives clearing house, and delivering derivatives business traded in Amsterdam, buy Clairmail Last month, Swift disconnected sanctioned Iranian institutions from its significant operational and margin Brussels, lisbon and paris, currently “The strength of our interbank networks at the instruction of the European Union. David efficiencies for clients. cleared with lCH.Clearnet in paris, will European derivatives onitise, the mobile money Bannister looks at suggestions that this bodes ill for the future of Swift. The move means that it will terminate be transferred to the new rCH in london firm is to acquire US provider its existing agreement with lCH.Clearnet, early in the first quarter of 2014. No change business allows us to MClairmail for $173 million. n the wake of the 9/11 attacks in the currently the subject of an acquisition will be made to the trading of continental deliver meaningful benefits The combined entity will service 13 US, Swift handed over transaction by rival exchange the london Stock derivatives, which will continue to be in the form of capital million registered consumers across Irecords to US agencies looking for Exchange. executed on NYSE Euronext markets in four continents, and will provide mobile the source of terrorist funding and other “Our clients have long asked for a Amsterdam, Brussels, lisbon and paris. efficiencies and savings.” money services to a wide range of intelligence. consolidation of clearing arrangements The aggregation of continental financial institutions in the US. it was widely criticised, not least by and the strength of our European derivatives business with the london A third of the top 50 North American the Belgian Government, which said it derivatives business allows us to deliver derivatives business in the same With respect to the clearing of NYSE financial institutions (including 8 of the had broken local privacy rules. meaningful benefits for them in the form clearing house will release substantial Euronext’s regulated cash markets, NYSE top 13) already use Monetise and/or Then, last month, following a of capital efficiencies and savings,” said capital savings for market participants, Euronext intends to negotiate a new long Clairmail products and services. European Union Council decision, Duncan Niederauer NYSE Euronext chief as a result of margin offsets across term arrangement with lCH.Clearnet, “Clairmail is an undisputed mobile Swift announced it would discontinue executive. “Formalising these steps highly correlated products. Derivatives preserving and strengthening the vital banking leader with a strong roster its communications services to iranian now and communicating them clearly to users will also benefit from substantial role played by paris in the European of financial institutions of all sizes,” financial institutions that are subject to our customers will allow them to more operational synergies, as a result of the financial markets. Subject to appropriate said Alastair lukies, Monitise chief European sanctions. effectively plan their capital allocation single technology platform and common agreement on commercial and governance executive. “Clairmail shares Monitise’s “The new European Council decision, needs and will enhance their operational operating procedures. terms, the new agreement would customer-centric approach and as confirmed by the Belgian Treasury, stability in a highly competitive and fluid in completing the European clearing replace the current arrangements which dedication to bringing the best possible prohibits companies such as Swift to environment.” development, NYSE Euronext expects terminate in December 2013. Entering mobile experience and technology continue to provide specialised financial NYSE will build on the recent to invest around $85m over the next two into a new contractual arrangement with through constant innovation and a messaging services to EU-sanctioned investments made in NYSE liffe Clearing, years, of which approximately 70% will lCH.Clearnet SA answers the strong focus on delivering bank-grade mobile iranian banks. Swift is incorporated the CCp for all trades conducted on the be in the form of capital expenditure. requirement from clients that cash services to their customers. This deal under Belgian law and has to comply with this decision as confirmed by its home NYSE liffe market in london, and will “This investment will realise significant markets clearing is performed under a is transformational for our customers, country government,” it said. now complete the project to bring in annualised net cost savings of around $30 horizontal model, with the potential to our team, our shareholders and our “This EU decision forces Swift to take action” said lázaro Campos, chief executive house all remaining functionality currently million from in-sourcing those clearing allow for more consolidation and the company. it is a compelling combination of Swift (pictured) . “Disconnecting banks is an extraordinary and unprecedented step out-sourced to lCH.Clearnet. services currently provided to NYSE liffe attached economies of scale, in a highly and great news for all those wanting for Swift. it is a direct result of international and multilateral action to intensify financial it expects the fully self-sufficient by lCH.Clearnet,” the exchange reckons. competitive environment. BT to offer bank-grade mobile money sanctions against iran.” services to billions of consumers, not The language employed is interesting, in a Kremlin-watcher sense: Swift was only in the US but worldwide.” “forced”, it “had to comply” and take this “unprecedented and extraordinary” step. For Clairmail, the acquisition brings This is not surprising – criticism was this time coming the other way, and Swift ISITC sees improvements in standards, but “cloudy outlook” the potential to expand the company’s found itself between the proverbial rock and hard place. largely, the criticism can be he banking crisis has prompted financial services firms our industry’s infrastructure and processes, there is still much mobile banking technology to new discounted as anti-American sentiment – Swift is acting as an instrument of US foreign to improve infrastructure and processes, with nearly 90% room for us to improve. iSiTC’s mission is to make the industry customers across new markets. policy, says this argument – but not all of it. Tof participants believing that progress has been made in less ‘cloudy’ and more ‘clear’ through developing industry “This acquisition validates the vision it is certainly being used as an instrument of US policy, and the signs are that it does not improving standards by adopting best practices. best practices and standards. We look forward to facilitating behind both companies’ strategies in like it one bit. At the recent Swift Operations Forum - America in New York, the amount of The results of the annual member survey carried out by critical dialogue at our industry forum and hearing from all of the exploding mobile money market traffic that is coming from China was highlighted see( report, page 7). Swift, and its members, iSiTC showed that while progress has been made, “the vision our constituents.” where Monitise has established a clear are unwilling to jeopardise that traffic, as it might by becoming a tool of governments. for the future is still unclear”. Survey results also showed that: global leadership position,” said pete Campos often describes Swift as the “internet of finance”, and whatever else the The 2012 annual member survey polled executives from ■ The economic outlook is not positive – 45% of respondents Daffern, Clairmail chief executive. “Both Chinese authorities may think of the internet as a conduit for dissidence, they seem investment managers, broker/dealers, custodians and vendors said that the economy is not poised for recovery but for companies have incredible synergy and happy with it as a conduit for financial transactions – the first Chinese member will join on issues ranging from future priorities to iT spending. Findings continued slow growth. A futher 24% were uncertain. are dedicated to offering bank-grade Swift’s board in June, it is understood. revealed uncertainty within the financial services industry, with ■ However, the financial crisis has prompted the industry services that empower consumers to The decision to disconnect iranian institutions is also a rather blunt instrument – 82% of respondents stating that the vision for the future of the to improve infrastructure and processes – with 68% of bank, pay and shop across any mobile illegal transactions are likely to be even harder to identify as they will now be going down industry is “cloudy” and that it’s unclear as to what the market respondents confirming this trend. device. i could not be more proud of the even darker channels, and legitimate organisations such as charities and humanitarian will look like in 2020. ■ Nearly 90% of respondents stated that the industry has made Clairmail team and its accomplishments organisations will suffer. “Our annual member survey has revealed that although some progress towards improving standards by adopting best since founding in 2004, and look That said, the extraterritorial application of laws is unlikely to go away – it is not new, we have emerged from the financial crisis, the future of our practice – however, there is still room for improvement. forward to working with the seasoned after all – but it has some profound implications for the future structure of the “internet industry is still unclear,” said Jan Snitzer, chair of iSiTC. “What ■ 71%of firms expect iT spending at their firms to increase over team behind Monitise.” BT of finance”.BT is clear is that although progress has been made in improving the next two years. BT

4 I www.bankingtech.com www.bankingtech.com I 5 Go to www.bankingtech.com for the latest news and comment

NYSE Euronext clarifies clearing plans

YSE Euronext has outlined its recognised Clearing House in london to “in addition, new revenue streams will European clearing strategy and be completed, licensed and operational accrue from 2014 from NYSE Euronext Nimplementation plan, detailing by the summer of 2013. The clearing of continental derivatives clearing and how it will use its NYSE liffe derivatives all of NYSE liffe’s london contracts will from other new post-trade business clearing platform to consolidate all of move into the new rCH then. opportunities including OTC clearing.” its European derivatives into a single Clearing for NYSE Euronext’s derivatives clearing house, and delivering derivatives business traded in Amsterdam, significant operational and margin Brussels, lisbon and paris, currently “The strength of our efficiencies for clients. cleared with lCH.Clearnet in paris, will European derivatives The move means that it will terminate be transferred to the new rCH in london its existing agreement with lCH.Clearnet, early in the first quarter of 2014. No change business allows us to currently the subject of an acquisition will be made to the trading of continental deliver meaningful benefits by rival exchange the london Stock derivatives, which will continue to be Exchange. executed on NYSE Euronext markets in in the form of capital “Our clients have long asked for a Amsterdam, Brussels, lisbon and paris. efficiencies and savings.” consolidation of clearing arrangements The aggregation of continental and the strength of our European derivatives business with the london derivatives business allows us to deliver derivatives business in the same With respect to the clearing of NYSE meaningful benefits for them in the form clearing house will release substantial Euronext’s regulated cash markets, NYSE of capital efficiencies and savings,” said capital savings for market participants, Euronext intends to negotiate a new long Duncan Niederauer NYSE Euronext chief as a result of margin offsets across term arrangement with lCH.Clearnet, executive. “Formalising these steps highly correlated products. Derivatives preserving and strengthening the vital now and communicating them clearly to users will also benefit from substantial role played by paris in the European our customers will allow them to more operational synergies, as a result of the financial markets. Subject to appropriate effectively plan their capital allocation single technology platform and common agreement on commercial and governance needs and will enhance their operational operating procedures. terms, the new agreement would stability in a highly competitive and fluid in completing the European clearing replace the current arrangements which environment.” development, NYSE Euronext expects terminate in December 2013. Entering NYSE will build on the recent to invest around $85m over the next two into a new contractual arrangement with investments made in NYSE liffe Clearing, years, of which approximately 70% will lCH.Clearnet SA answers the strong the CCp for all trades conducted on the be in the form of capital expenditure. requirement from clients that cash NYSE liffe market in london, and will “This investment will realise significant markets clearing is performed under a now complete the project to bring in annualised net cost savings of around $30 horizontal model, with the potential to house all remaining functionality currently million from in-sourcing those clearing allow for more consolidation and the out-sourced to lCH.Clearnet. services currently provided to NYSE liffe attached economies of scale, in a highly it expects the fully self-sufficient by lCH.Clearnet,” the exchange reckons. competitive environment. BT ISITC sees improvements in standards, but “cloudy outlook” he banking crisis has prompted financial services firms our industry’s infrastructure and processes, there is still much to improve infrastructure and processes, with nearly 90% room for us to improve. iSiTC’s mission is to make the industry Tof participants believing that progress has been made in less ‘cloudy’ and more ‘clear’ through developing industry improving standards by adopting best practices. best practices and standards. We look forward to facilitating The results of the annual member survey carried out by critical dialogue at our industry forum and hearing from all of iSiTC showed that while progress has been made, “the vision our constituents.” for the future is still unclear”. Survey results also showed that: The 2012 annual member survey polled executives from ■ The economic outlook is not positive – 45% of respondents investment managers, broker/dealers, custodians and vendors said that the economy is not poised for recovery but for on issues ranging from future priorities to iT spending. Findings continued slow growth. A futher 24% were uncertain. revealed uncertainty within the financial services industry, with ■ However, the financial crisis has prompted the industry 82% of respondents stating that the vision for the future of the to improve infrastructure and processes – with 68% of industry is “cloudy” and that it’s unclear as to what the market respondents confirming this trend. will look like in 2020. ■ Nearly 90% of respondents stated that the industry has made “Our annual member survey has revealed that although some progress towards improving standards by adopting best we have emerged from the financial crisis, the future of our practice – however, there is still room for improvement. industry is still unclear,” said Jan Snitzer, chair of iSiTC. “What ■ 71%of firms expect iT spending at their firms to increase over is clear is that although progress has been made in improving the next two years. BT

www.bankingtech.com I 5

News News ANALYsIs April 2012 Go to www.bankingtech.com for the latest news and comment April 2012 Swift: going for growth in a borderless world emirates Lebanon Bank has selected the CR2 BankWorld mobile years now, we have seen a standardisation and globalisation of the and internet banking solution. ELBank is a partnership between Bank of back-office processes. The current solutions have grown up and are At its annual Americas conference, Swift set out its view of how banking operations might be able to work Sharjah, UAE and BNP Paribas with the objective of providing banking mature enough to integrate our banking IT environment. Working with on a global basis,writes Sherree DeCovny services to the corporate and private segments. The selection of Finacle gives us more flexibility and let us concentrate our efforts on BankWorld follows ELBank’s strategy to strengthen its operations and the customer’s needs, which is part of our strategy to become the first At the beginning of 2010, the swift in the future, Swift will continue to “We see a lot of institutions that are still improve the level of service provided to its customers while managing universal direct bank.” community was trying to figure out focus on its core business. in addition, it relying on manual processes to screen. its mobile and internet channel from a single platform. how to “navigate the new normal.” is building on its skill set and adding value This is no longer considered acceptable Leumi Private Bank – the swiss private bank resulting of the 2011 was the year in which the Swift by introducing a sanctions screening and for a number of regulators.” Marfin, a european financial group and established Temenos merger of Banque safdié and Bank Leumi (switzerland) – has community tried to define the next testing service and participating in an Swift’s sanctions screening service T24 user in Cyprus, Greece and Romania, has extended its completed the migration for all of the bank’s swift FIN flows generation of financial services. Going effort to increase efficiency in reference will be hosted and managed centrally use of T24 to its Ukrainian subsidiary, Marfin Bank Ukraine. from the sunGard Mint messaging platform. The bank decided for growth in a borderless world was the data. within the Swift environment. Swift is Historically, Marfin Bank Ukraine had multiple and decentralised to migrate from Mint to its designated successor product, theme for this year’s Swift Operations “We are not going away from our core also introducing a testing service. The core banking systems, which over time has led to inefficiencies the Advanced Messaging Hub from Arkelis, a wholly-owned Forum – Americas held in New York in business; we are extending it in areas offering, which is a filtering application across the organisation. The bank required a central flexible subsidiary of financial messaging provider swift. As a multi- March. that make sense,” said Campos. and sanctions list update service, will be core banking system that meets local regulatory requirements network platform, AMH not only offers connectivity for swift Swift chief executive lázaro Campos Governments use sanctions as a launched in mid-April. to streamline its operations and provide rapid delivery of new messaging but also to domestic networks such as sIC and noted that Swift and its member banks method of implementing foreign policy Subscribers’ FiN transactions will products and services. secom in switzerland. have become more agile and efficient over objectives. Banks that fail to block go through a screening engine where the last four years. While it is not simple certain payments run the risk of being they are matched against whichever The international operation of standard Bank, South Africa’s largest Landbouwkrediet, a co-operative financial services institution to become nimble in 210 countries, Swift fined and potentially having criminal sanctions lists the bank chooses to bank, has selected Telstra International as its sole Global Wide Area spanning five banking and insurance brands, has chosen Clear2Pay’s managed to increase efficiency by 30% and civil charges brought them. Yet apply. Swift has a catalogue of 24 lists Network provider ensuring a fully active network with high capacity Open Payment Framework technology for its operations in Belgium to and reduce its cost by 20%. At the same several operations challenges arise when from 16 jurisdictions. if there is a hit, the and high availability services into 32 sites across 13 countries. The migrate accounts from Centea, acquired from KBC last year, into its time, it reduced its prices by 36% last implementing a sanctions program. bank is alerted and the transaction is multi-million dollar three-year deal sees Standard Bank consolidate its banking systems. Clear2Pay’s system will be used as a switch between year while still maintaining its service. According to Scott Kinney, compliance escalated through a case management GWAN requirements from two providers to Telstra in order to realise an the target Landbouwkrediet systems and the KBC systems where the The banking industry is in a much manager at Wells Fargo, managing lists is communication. The bank then needs to anticipated annual cost saving of 50. accounts currently still reside. Critical in this process is the correct better position compared to two years difficult especially for banks that operate decide whether it is a false positive, at routing of the transactions, in particular during the phased transition ago, and Swift’s performance reflects in multiple jurisdictions. OFAC, the UN, which point the transaction is released, state street Corporation has launched its entity exposure stage of these accounts. that. While some experts maintain the EU and Her Majesty’s Treasury all or a true hit, at which point it is blocked. Monitor service, which calculates exposure to particular economic recovery is another five years produce lists, and the banks have lists in the reference data space, the legal entities that asset managers and asset owners either do Callataÿ & wouters, a core banking systems vendor, is to away, there are still opportunities for of their own. Updates are frequent – for industry is making an effort to standardise business with or have within their portfolios. Delivered through work with integrator wincor Nixdorf to implement its Thaler banks. example, OFAC updates its list about identifiers for entities and instruments. state street’s proprietary online client information delivery software platform for Polish retail banking group Bank Polskiej “Compared to two years ago, now every four days, and it sometimes makes The new iSO standard 17442 has been system, my.statestreet.com, entity exposure Monitor service spółdzielczosci.’ BPs is the result of a 2002 merger of five Polish there’s more pragmatism,” said Campos. changes intraday. One banker from india defined for this purpose. iSO 17442 is a includes dashboards that investors can use to drill down into banks. Headquartered in warsaw, it has a network of about “it [the economy] is not likely to change recently told Kinney that he juggles about randomly generated 20-digit code; the information about issuer and counterparty risk across all asset 80 branches that serve consumers, small- to medium-sized radically in the next few years ... we 34 different sanctions lists for trade first 18 digits are alphanumeric and the classes. It also features limit-setting and alerting capabilities businesses as well as corporate clients, with the bulk of its should shake away that nostalgia of the transactions. last two are numeric. that alert investors regarding over exposure to a particular offices located ins outh-eastern Poland. In 2011, BPs decided past, get on with the transformation, and “Even in my own institution, i think The Financial Stability Board, a forum legal entity. state street’s entity exposure Monitor service is to modernize its IT and software infrastructure. try to drive capitalism to a better form i can probably apply 26 different lists of international regulators, was given also designed to help provide investors with comprehensive because some of what we’ve been using to transactions and 23 different lists to the task of creating a framework for the details and advanced analytics such as exposure diversification The US Financial Industry Regulatory Authority has recognised in the past clearly doesn’t work.” customers,” he said. legal Entity identifier at the G20 plenary measures and client universe comparisons. Bloomberg Open Symbology for its Trade Reporting and Compliance regulation and the uncertainty inconsistency is another issue. There meeting that took place in November Engine, TRACE. BSYM gives financial firms, exchanges and data around it remains a top driver for banks are 112 variations in the spelling of Omar 2011 in Cannes. last December, the saxo Bank’s Swiss operation has become the first bank in the country providers an alternative to using proprietary naming conventions. today. Dodd-Frank comprises more Gaddafi’s name that appeared in English standard was voted unanimously. Now the to adopt SunGard’s Ambit Private Banking solution on an application Broker-dealers registered with FINRA are required by the Securities than 400 rules, but only about 90 have language print media. There are eight iSO and the Financial Stability Board are service provider basis. Saxo previously deployed the solution in-house, Exchange Commission to report trades of corporate bonds and been finalised. The operational impact variations within the OFAC list. The UN synchronising the timelines for publishing prior to SunGard establishing a new ASP service in Switzerland last securitised products to the TRACE system in a mandated timeframe. is enormous given the tight margins sanction list only contains one spelling, the standard and releasing the regulators’ year. With this deployment, Saxo has transferred its IT infrastructure The reportable bond-universe tracked by TRACE increased significantly in the banking industry. As a result, it but it is different from the eight on the final recommendations, which will happen and maintenance to SunGard, lowering IT operational and hardware in 2011 when it started accepting data related to asset and mortgage is imperative for banks to ensure that OFAC list. at the June G20 plenary in Mexico. costs, while helping it scale its IT on demand. backed securities in addition to corporate and agency bond information. regulation can be implemented in an The cost of compliance is high. Five work streams have been efficient way. Banks have to purchase computers and defined including governance, funding, Information Builders, a business intelligence and analytics The Qatar exchange has gone live with its new market Campos noted that the exchange of software and hire trained staff to screen operations, implementation and scope. vendor, has teamed with enterprise data management monitoring system, scila surveillance. The system, delivered messages from China to Europe and the transactions. The lists can be obtained All the regulators are on different specialist Goldensource. Information Builders’ webFocus by Cinnober, is customised to the needs of the exchange with US dwarfed all other traffic on the Swift free of charge from the regulators’ timelines, so they need to align their platform will deliver visualisation and analytical insights to new alerts to detect abnormal market behaviour and conditions network, but trade patterns have shifted. web sites, but the quality varies and programs amongst themselves and with complement Goldensource’s eDM solution, providing data that are specific to the exchange’s Rule Book, integration with Traffic has not only increased from China then banks have to consolidate them. the industry. quality, operations, and risk exposure dashboards. the exchange’s trading engine, post-trade system and news to Africa and latin America, but also it Alternatively, banks can buy the lists Swift and the DTCC have produced feed, and new reports and screen features. The implementation is increasing at twice the speed of other from a vendor. Some of the hidden costs the test file. The registration authority ING Belgium has selected Finacle universal banking solution to project was started in March last year when scila was selected message flows. intra-Asian traffic is also include checking for quality assurance has been defined and Sifma is publishing replace its core banking software across multiple lines of the bank’s as the following a competitive bid involving multiple international growing at a rapid pace. To help banks and verifying systems have been provisional lEis. in addition, quality business including savings and current accounts, deposits and loans, vendors. The project involved a team from Qe operations and keep a close watch of these trends, Swift implemented correctly. processes are in place to validate the delivering operational efficiencies and improving customer experience. IT departments working with the scila team in two phases, with is introducing the Swift index to compare “Not everyone progresses at the same legal entity’s name and details with Finacle was chosen by ING following a competitive tender process. an initial standard release being implemented in August 2011, micro-economic metrics with traffic speed,” said Nicolas Stuckens, manager, national registrars and ensure the same Frank Stockx, chief information officer of ING Belgium, said: “For many followed by a fully customised version that is now live. BT patterns. AMl and sanctions initiatives at Swift. lEi is not issued twice. BT

6 I www.bankingtech.com www.bankingtech.com I 7

News ANALYsIs April 2012

Swift: going for growth in a borderless world At its annual Americas conference, Swift set out its view of how banking operations might be able to work on a global basis,writes Sherree DeCovny

At the beginning of 2010, the swift in the future, Swift will continue to “We see a lot of institutions that are still community was trying to figure out focus on its core business. in addition, it relying on manual processes to screen. how to “navigate the new normal.” is building on its skill set and adding value This is no longer considered acceptable 2011 was the year in which the Swift by introducing a sanctions screening and for a number of regulators.” community tried to define the next testing service and participating in an Swift’s sanctions screening service generation of financial services. Going effort to increase efficiency in reference will be hosted and managed centrally for growth in a borderless world was the data. within the Swift environment. Swift is theme for this year’s Swift Operations “We are not going away from our core also introducing a testing service. The Forum – Americas held in New York in business; we are extending it in areas offering, which is a filtering application March. that make sense,” said Campos. and sanctions list update service, will be Swift chief executive lázaro Campos Governments use sanctions as a launched in mid-April. noted that Swift and its member banks method of implementing foreign policy Subscribers’ FiN transactions will have become more agile and efficient over objectives. Banks that fail to block go through a screening engine where the last four years. While it is not simple certain payments run the risk of being they are matched against whichever to become nimble in 210 countries, Swift fined and potentially having criminal sanctions lists the bank chooses to managed to increase efficiency by 30% and civil charges brought them. Yet apply. Swift has a catalogue of 24 lists and reduce its cost by 20%. At the same several operations challenges arise when from 16 jurisdictions. if there is a hit, the time, it reduced its prices by 36% last implementing a sanctions program. bank is alerted and the transaction is year while still maintaining its service. According to Scott Kinney, compliance escalated through a case management The banking industry is in a much manager at Wells Fargo, managing lists is communication. The bank then needs to better position compared to two years difficult especially for banks that operate decide whether it is a false positive, at ago, and Swift’s performance reflects in multiple jurisdictions. OFAC, the UN, which point the transaction is released, that. While some experts maintain the EU and Her Majesty’s Treasury all or a true hit, at which point it is blocked. economic recovery is another five years produce lists, and the banks have lists in the reference data space, the away, there are still opportunities for of their own. Updates are frequent – for industry is making an effort to standardise banks. example, OFAC updates its list about identifiers for entities and instruments. “Compared to two years ago, now every four days, and it sometimes makes The new iSO standard 17442 has been there’s more pragmatism,” said Campos. changes intraday. One banker from india defined for this purpose. iSO 17442 is a “it [the economy] is not likely to change recently told Kinney that he juggles about randomly generated 20-digit code; the radically in the next few years ... we 34 different sanctions lists for trade first 18 digits are alphanumeric and the should shake away that nostalgia of the transactions. last two are numeric. past, get on with the transformation, and “Even in my own institution, i think The Financial Stability Board, a forum try to drive capitalism to a better form i can probably apply 26 different lists of international regulators, was given because some of what we’ve been using to transactions and 23 different lists to the task of creating a framework for the in the past clearly doesn’t work.” customers,” he said. legal Entity identifier at the G20 plenary regulation and the uncertainty inconsistency is another issue. There meeting that took place in November around it remains a top driver for banks are 112 variations in the spelling of Omar 2011 in Cannes. last December, the today. Dodd-Frank comprises more Gaddafi’s name that appeared in English standard was voted unanimously. Now the than 400 rules, but only about 90 have language print media. There are eight iSO and the Financial Stability Board are been finalised. The operational impact variations within the OFAC list. The UN synchronising the timelines for publishing is enormous given the tight margins sanction list only contains one spelling, the standard and releasing the regulators’ in the banking industry. As a result, it but it is different from the eight on the final recommendations, which will happen is imperative for banks to ensure that OFAC list. at the June G20 plenary in Mexico. regulation can be implemented in an The cost of compliance is high. Five work streams have been efficient way. Banks have to purchase computers and defined including governance, funding, Campos noted that the exchange of software and hire trained staff to screen operations, implementation and scope. messages from China to Europe and the transactions. The lists can be obtained All the regulators are on different US dwarfed all other traffic on the Swift free of charge from the regulators’ timelines, so they need to align their network, but trade patterns have shifted. web sites, but the quality varies and programs amongst themselves and with Traffic has not only increased from China then banks have to consolidate them. the industry. to Africa and latin America, but also it Alternatively, banks can buy the lists Swift and the DTCC have produced is increasing at twice the speed of other from a vendor. Some of the hidden costs the test file. The registration authority message flows. intra-Asian traffic is also include checking for quality assurance has been defined and Sifma is publishing growing at a rapid pace. To help banks and verifying systems have been provisional lEis. in addition, quality keep a close watch of these trends, Swift implemented correctly. processes are in place to validate the is introducing the Swift index to compare “Not everyone progresses at the same legal entity’s name and details with micro-economic metrics with traffic speed,” said Nicolas Stuckens, manager, national registrars and ensure the same patterns. AMl and sanctions initiatives at Swift. lEi is not issued twice. BT

www.bankingtech.com I 7 Banking Technology Banking Technology Judged Awards Readers’ Choice Awards

Best Green IT Initiative by a Financial Institution Best Core Banking Product/Service

Best Industry Infrastructure Initiative Best Corporate Actions Automation Product/Service Banking Technology Awards 2012 Best Internet Banking Service Provider Best Enterprise Data Management Product/Service For more than a decade, the Banking Technology Awards have reflected Best Payments System Initiative excellence in the use of IT in financial services. Each year the event has grown Best Financial Crime Prevention Product/Service as an ever-wider pool of entrants vie for the recognition that the Awards confer Best Security Initiative on their efforts – from small regional banks in Central Europe and Africa to Best Governance Risk & Compliance the industry behemoths with multi-million budgets and global projects, all are put under the scrutiny of our expert judging panel. But the judges can only Best Trading Platform or Venue Product/Service consider the entries that are put in front of them – and with several hundred contenders it is a daunting enough task – so it is important that institutions get Best Transaction/Wholesale Banking Initiative Best Payments Product/Service their entries in before the deadline. That’s why this year we are announcing the Banking Technology Awards 2012 now, to give entrants a good opportunity to Best Use of IT in Retail Banking Best Post-trade Processing Product/Service pull their entries together in plenty of time. And for the Readers’ Choice Awards (see opposite page), we will be introducing a new expert panel to oversee the nomination and voting system to make it fairer and more transparent. Best Use of IT in Investment Banking Best Trading System Details of the entry processes and dates for both sets of awards will be published in the next issue – and the starting gun will be fired. Best Use of IT in Wholesale/Transaction Banking Best Risk Management Product/Service David Bannister, editor Best Use of Mobile Technology in Financial Services

CIO of the Year

IT Team of the Year Follow us on Twitter: Outstanding Contribution by a Female in www.twitter.com/bankingtechno Financial Technology

Outstanding Individual Contribution to the Industry Join us on LinkedIn: Go to www.bankingtech.com and click on the button on our home page

Contacts

For sponsorship or table reservations please contact: For general Awards enquiries please contact: Leon Thomson Gemma Healy Tel: +44 203 377 3493 Tel: +44 207 017 6752 [email protected] [email protected] Banking Technology Banking Technology Judged Awards Readers’ Choice Awards

Best Green IT Initiative by a Financial Institution Best Core Banking Product/Service

Best Industry Infrastructure Initiative Best Corporate Actions Automation Product/Service Best Internet Banking Service Provider Best Enterprise Data Management Product/Service Best Payments System Initiative Best Financial Crime Prevention Product/Service Best Security Initiative Best Governance Risk & Compliance Best Trading Platform or Venue Product/Service

Best Transaction/Wholesale Banking Initiative Best Payments Product/Service

Best Use of IT in Retail Banking Best Post-trade Processing Product/Service

Best Use of IT in Investment Banking Best Trading System

Best Use of IT in Wholesale/Transaction Banking Best Risk Management Product/Service

Best Use of Mobile Technology in Financial Services

CIO of the Year

IT Team of the Year Follow us on Twitter: Outstanding Contribution by a Female in www.twitter.com/bankingtechno Financial Technology

Outstanding Individual Contribution to the Industry Join us on LinkedIn: Go to www.bankingtech.com and click on the button on our home page

Contacts

Although the rules are far from written, eager brokers are are less developed and ripe for competition. Futures are already looking to tie down clients with expanded electronic typically traded electronically; according to a recent study services. by research firm Tabb Group, entitledUS Futures Trading “There’s no regulatory certainty about compliance dates 2012: Buy-Side Demands in an Evolving Marketplace, just Attractivematter for any of the G20 requirements,” says David Holcombe, 14% of trading in 2011 by US long-only firms was traded specialist in markets and trading at consultancy Rule by voice, predicted to fall to 11% in 2012. Broker-dealers are competing to attract Financial. “Regulators appear to be struggling with finalising “I have not traded futures strictly by voice for more clients with high performance electronic regulation to fit with compliance dates by the end of 2012, than eight years as it introduces a lot of risk,” says execution and clearing across cash and but that hasn’t stopped the sell side from spending heavily Nanette Buziak, head of equity trading at ING Investment derivatives markets. Dan Barnes looks on developing new derivatives offerings.” Management in the US. at what’s going on. The Tabb Group says that 62% of futures trading for Pushing every button hedge funds is based on alpha generation, a figure that The relationship between the investment and trading sides rises to 90% for commodities trading advisors. The majority of a fund management business is a tricky one. For long- of futures trading for traditional buy-side investors (55%) only firms, trading is seen as a cost centre; for hedge funds is used for the management of cash flows as portfolios it is a source of profit. Research is where brokers provide change and investors come and go. Just 8% of activity is the real alpha for traditional investment managers, but focused on generating alpha. as its value is intangible they have tended to pay for it by As a result the level of sophistication in the execution executing trades with the research provider. technology at long-only firms is not high. In developed markets this model of bundled research “A lot of futures trading at traditional asset management and execution services has been going out of fashion for firms is an offshoot of the equity or the fixed income desk. some time. Commission sharing agreements, used to help They don’t always have a derivatives trading specialist,” asset managers pay for research and execution separately, says Matt Simon, an analyst at Tabb Group and author of were in use by 76% of US fund managers and 83% of UK the report. “They rely on either voice trading or ‘point-and- fund managers in 2011, up from 45% and 70% in 2008, click’ trading on the order management system to access according to research firm Celent. As markets became a sales desk, which is simple to support. However, as their tougher during the financial crisis, asset managers sought use of futures grows, they are looking to trade them as they to ensure they were getting the best level of service across trade other products such as equities.” the board. This meant that excelling in only one of either “We moved our electronic product into futures late last research or execution, and dragging your heels in the other, year,” says Goodman at SocGen. “It’s often the same would no longer be tolerated. trader using both products at the buy-side and if they are “If you are a one-trick pony, you are going to struggle used to pressing a button on equities they want to press a in a market where there is not a lot to go around,” says button for futures.” Mark Goodman, head of quantitative trading services at This is already driving the development of trading French broker Société Générale. “A broker could have the technology in developed derivatives markets, as is the Sell-side ﬁ rms are duking it out for order ﬂ ow, following greatest research in the world but your client wants to pay pressure from passive index products such as exchange- a few arid years in trading. The 2011 Greek crisis, for it through your electronic service and if you don’t have traded funds, which mimic active strategies but at a fraction following hot on the heels of the Great Recession, has the capacity to do that, you aren’t getting paid.” of the cost to the investor. As a result, Simon asserts, thrown cold water over many eager investment managers, “Clearly the wider range of services that an investment asset managers are extending their investment mandates and the bankruptcy of futures commission merchant MF bank can provide to a fund manager are important and to allow increased use of futures so that they are able to Global, just three years after lehman Brothers collapsed, highly valued,” says Richard Balarkas, chief executive of deliver greater returns. has led many to hold back on trading and to re-examine agency broker Instinet. “However research that I’ve seen Kevin White, head of alternatives trading at asset their counterparties. For aggressive sell-side sales traders suggests that supply has diminished significantly and that manager Invesco, says that his team uses customised this has created an opportunity. A buy-side fi rm picks a in any case demand has never been anywhere near as baskets of futures to mimic indices at a fraction of their cost dealer based on its research quality, the amount of leverage great as the supply.” to seek alpha. it can provide (for hedge funds), and its ability to execute As a result, Higgins notes that buy-side firms are asking “If you’re not paying attention to this, you are not only and clear trades. questions about their partners’ trading technology. missing out on potential liquidity, you are also missing out “There are fi rms who will refuse to trade with a broker “They want to know about our execution processes; on knowledge of what is going on in some of the names, because they don’t have natural liquidity as their execution how we prioritise venues, how our smart router works and whether from a top-down index level or a bottom-up, single is not good enough – and that is based on their technology,” how our algorithms perform,” he says. “That is becoming stock level,” he says. says Duncan Higgins of agency broker and technology more important with firms regardless of whether they use As the futures markets become more competitive, provider ITG. unbundled services or not.” Simon says that buy-side firms will start to think about how Execution has become a signifi cantly electronic affair In this hyper-competitive environment, the ability they can get more sophisticated in the ways that they trade, for many asset classes, notably equities and futures. Other to deliver superior execution is a proxy for a dealer’s offering sell-side firms the chance to win clients by beefing products are likely to follow suit, as the global regulatory technology. up their electronic trading offering. drive for transparency industrialises the trading of over-the- “Electronic trading, and therefore technology, is an White agrees. “Algorithms in the derivatives space are counter derivatives, standardising contracts and pushing important part of that but pure technology isn’t an enabler; potentially the next big thing. As firms cotton on to how trading of them on exchange. In 2009, at a meeting in in fact if your clients are aware of your technology it has much order flow across all assets is coming from these Pittsburgh, the Group of 20 countries committed to this, probably gone wrong,” says Goodman. products we will need to be smarter about how we reach along with central clearing for all derivatives trades by the market and what we do once we get there,” he says. the end of 2012, as part of “tougher regulation of OTC Back to the futures derivatives, securitisation markets, credit rating agencies, Although the equities market is nearing saturation with the New lines in the sand and hedge funds”. development of technology-based trading, other markets Still, technology can be hard to differentiate, making its >

10 I www.bankingtech.com www.bankingtech.com I 11 Although the rules are far from written, eager brokers are are less developed and ripe for competition. Futures are already looking to tie down clients with expanded electronic typically traded electronically; according to a recent study services. by research firm Tabb Group, entitledUS Futures Trading “There’s no regulatory certainty about compliance dates 2012: Buy-Side Demands in an Evolving Marketplace, just for any of the G20 requirements,” says David Holcombe, 14% of trading in 2011 by US long-only firms was traded specialist in markets and trading at consultancy Rule by voice, predicted to fall to 11% in 2012. Financial. “Regulators appear to be struggling with finalising “I have not traded futures strictly by voice for more regulation to fit with compliance dates by the end of 2012, than eight years as it introduces a lot of risk,” says but that hasn’t stopped the sell side from spending heavily Nanette Buziak, head of equity trading at ING Investment on developing new derivatives offerings.” Management in the US. The Tabb Group says that 62% of futures trading for Pushing every button hedge funds is based on alpha generation, a figure that The relationship between the investment and trading sides rises to 90% for commodities trading advisors. The majority of a fund management business is a tricky one. For long- of futures trading for traditional buy-side investors (55%) only firms, trading is seen as a cost centre; for hedge funds is used for the management of cash flows as portfolios it is a source of profit. Research is where brokers provide change and investors come and go. Just 8% of activity is the real alpha for traditional investment managers, but focused on generating alpha. as its value is intangible they have tended to pay for it by As a result the level of sophistication in the execution executing trades with the research provider. technology at long-only firms is not high. In developed markets this model of bundled research “A lot of futures trading at traditional asset management and execution services has been going out of fashion for firms is an offshoot of the equity or the fixed income desk. some time. Commission sharing agreements, used to help They don’t always have a derivatives trading specialist,” asset managers pay for research and execution separately, says Matt Simon, an analyst at Tabb Group and author of were in use by 76% of US fund managers and 83% of UK the report. “They rely on either voice trading or ‘point-and- fund managers in 2011, up from 45% and 70% in 2008, click’ trading on the order management system to access according to research firm Celent. As markets became a sales desk, which is simple to support. However, as their tougher during the financial crisis, asset managers sought use of futures grows, they are looking to trade them as they to ensure they were getting the best level of service across trade other products such as equities.” the board. This meant that excelling in only one of either “We moved our electronic product into futures late last research or execution, and dragging your heels in the other, year,” says Goodman at SocGen. “It’s often the same would no longer be tolerated. trader using both products at the buy-side and if they are “If you are a one-trick pony, you are going to struggle used to pressing a button on equities they want to press a in a market where there is not a lot to go around,” says button for futures.” Mark Goodman, head of quantitative trading services at This is already driving the development of trading French broker Société Générale. “A broker could have the technology in developed derivatives markets, as is the greatest research in the world but your client wants to pay pressure from passive index products such as exchange- for it through your electronic service and if you don’t have traded funds, which mimic active strategies but at a fraction the capacity to do that, you aren’t getting paid.” of the cost to the investor. As a result, Simon asserts, “Clearly the wider range of services that an investment asset managers are extending their investment mandates bank can provide to a fund manager are important and to allow increased use of futures so that they are able to highly valued,” says Richard Balarkas, chief executive of deliver greater returns. agency broker Instinet. “However research that I’ve seen Kevin White, head of alternatives trading at asset suggests that supply has diminished significantly and that manager Invesco, says that his team uses customised in any case demand has never been anywhere near as baskets of futures to mimic indices at a fraction of their cost great as the supply.” to seek alpha. As a result, Higgins notes that buy-side firms are asking “If you’re not paying attention to this, you are not only questions about their partners’ trading technology. missing out on potential liquidity, you are also missing out “They want to know about our execution processes; on knowledge of what is going on in some of the names, how we prioritise venues, how our smart router works and whether from a top-down index level or a bottom-up, single how our algorithms perform,” he says. “That is becoming stock level,” he says. more important with firms regardless of whether they use As the futures markets become more competitive, unbundled services or not.” Simon says that buy-side firms will start to think about how In this hyper-competitive environment, the ability they can get more sophisticated in the ways that they trade, to deliver superior execution is a proxy for a dealer’s offering sell-side firms the chance to win clients by beefing technology. up their electronic trading offering. “Electronic trading, and therefore technology, is an White agrees. “Algorithms in the derivatives space are important part of that but pure technology isn’t an enabler; potentially the next big thing. As firms cotton on to how in fact if your clients are aware of your technology it has much order flow across all assets is coming from these probably gone wrong,” says Goodman. products we will need to be smarter about how we reach the market and what we do once we get there,” he says. Back to the futures Although the equities market is nearing saturation with the New lines in the sand development of technology-based trading, other markets Still, technology can be hard to differentiate, making its >

www.bankingtech.com I 11 COVER FOCUS: SEll-SidE StRatEgiES APRIl 2012

value as a sales tool restricted compared to other services “If you’re an algo user, there isn’t really a three-month such as financing terms. period that you can look at over the last year or so where Holcombe, at Rule Financial, has carried out research the markets have been relatively benign or consistent,” into the investment that sell-side firms are making into their he says. “So you can’t easily determine from your recent electronic trading offerings, stemming from the regulatory transaction cost analysis how to change your trading in drive to centralise and standardise OTC derivatives trading. the next period. If you are in a thin liquidity environment The tier-one investment banks, which he says have spent and you have volatility shocks coming in, such as the over $100 million each to soup up their services, are Greek debt crisis, it’s very difficult to determine how building out their prime brokerage business to develop you should nuance your trading style. into a clearing broker offering. Despite the uncertainty over “There’s an awful lot of technology out there but as regulatory deadlines, 70% of banks surveyed had already to how good it is, that is highly questionable. You can completed their offerings. connect a smart router to 28 markets and get a fill, but “They already offer services like margining, and they it’s like firing buck shot into a large flight of ducks; you can operate as an executing broker already, so it’s a natural inevitably hit one, but was it the one you were aiming at point from which to grow,” he says. and was it the biggest, plumpest duck?” Their single dealer platforms, which were previously Research by Intelligent Financial Systems, released used to trade OTC between the client and the broker, will in April last year, showed that Instinet’s smart order now be used to access the electronic marketplaces on router was able to find and trade on best price within which trading must occur. That will mean they must offer 99.9997% of perfection for equity trades in March a greater range of services, including research and market 2011, providing an average of 1.12 basis points in price data, over a pure execution system. improvement and reduction in spreads of 10%. To get Nevertheless they do not expect execution to be a deal that together took the best part of a year, Balarkas breaker; instead they expect to generate the majority of says, just to prove they were aiming and hitting the right their revenues from competing based on advanced client target. services, such as financing and collateral. “For that reason I suspect that asset managers who Proving the value of execution technology is not easy, are trading via multiple steps to market, or using off- says Balarkas, in part due to the exceptional market the-shelf order routers, must have enormous difficulties circumstances which can hamper a scientific analysis. establishing how effective their technology is.” BT Go to www.bankingtech.com for the latest news and comment TRANSACTIONS & PAYMENTS April 2012 Barclays’ joins with Sentenial for SEPA E-invoicing yet to make an impact on SDD mandates businesses says research report arclays Corporate has -invoicing, long touted as a route to greater financial efficiency for business partnered with payment of all sizes, is failing to make an impact, according to research released today Bsystems vendor Sentenial Eby Tradeshift. The global study interviewed over 600 senior financial decision to provide pan-European mandate makers in larger organisations and found that only 8% are very satisfied with their management solutions for the current e-invoicing solution. bank’s SEpA Direct Debit corporate At a time of economic uncertainty – 86% of UK respondents say they are under customers. greater pressure to manage business costs than ever before – the majority of e-invoicing The service will allow customers systems aren’t delivering the cost saving benefits many had hoped for. in fact, invoicing to transition to SEpA Direct Debit, is still a major strain for large businesses, with 48% of invoices received still having to migrating away from the existing in- be scanned or input manually. On average 40 employee hours each week are spent country domestic direct debit services scanning or manually inputting invoices. across Europe as well as being able to The findings of the research are revealed in a report A manifesto for the e-invoicing convert and enrich legacy collection revolution. it shows that large enterprises are generally very eager to adopt e-invoicing files into SEpA-compliant payments. with cost reduction (79%), increased efficiency (77%) and stronger supplier ties (60%) Sentenial’s Origix Corporate service all cited by UK respondents as reasons for making the switch. But, despite the fact that was chosen by Barclays following 60% have tried some form of e-invoicing, only 46% of suppliers have used the systems an extensive market evaluation and that have been put in place. won out based upon the solution’s Nearly half of UK respondents (41%) said it is difficult to get suppliers to adopt comprehensive nature, proven e-invoicing and 36% said it is costly. A quarter (26%) even said that e-invoicing is a track record and the rapid time to financial burden on suppliers. This is particularly problematic, with 47% saying that market offered. e-invoicing is pointless without widespread supplier adoption and 57% agreeing that richard Martin, managing director, e-invoicing adoption would be widespread if it was free to all suppliers. payments & Cash Management On the bright side, the finance department in the enterprise is ready to try new at Barclays Corporate said: “The things – especially when it comes to technology. Nearly two-thirds (60%) of finance Sentenial solution offers both Barclays departments questioned reported that social media functionality is important when and our customers a competitive communicating with customers and suppliers and nearly half (48%) believe p2p advantage. This solution, similar to processes will move to the cloud within two years. Barclays, provides wide pan-European Christian lanng, chief executive and co-founder of Tradeshift, said: “The enterprise coverage with core functionality that has been let down by e-invoicing providers that punish suppliers for using their systems has been tried and tested over many both in terms of cost and time. There’s nothing stopping the move to free e-invoicing years. When selecting a vendor we forever but we’re also asking a new question here: once you have this connection with had to be certain that we chose other businesses, what’s next? it is high time that e-invoicing becomes a beneficial both the right product and the right solution for businesses of all sizes and can then help usher in a new era of financial – partners, so Sentenial’s commitment and business – efficiency.”BT to SEpA and impressive growth in recent years were major factors in our decision.” Clear2Pay launches in Singapore The solution is based around three modules that cover the migration of lear2pay, the provider of next generation payment solutions for financial legacy mandates to SEpA, ongoing institutions has launched its G3 payments Solution for the Singapore financial Mandate Management and the Cservices industry on the back of its SOA Open payment Framework. generation of SEpA Direct Debits. A The company says that this “is a direct follow-on from the partnership Clear2pay market leading eMandate capability is announced with Vocalink on delivering an end- also being rolled out. to-end immediate payments solution for banks”. “This is a direct Sean Fitzgerald, chief executive The G3 scheme will enable Singaporean banks follow-on from of Sentenial said: “Sentenial is very and financial institutions to process low-value pleased to announce this partnership payments in real-time, maximising their ability the partnership with Barclays, a bank with tremendous to deliver innovative and commercially attractive Clear2Pay European coverage and experience. products while minimising settlement risk. Now that the European parliament The G3 immediate payment Solution, announced with has voted to make 1 February 2014 developed by Clear2pay’s ApAC team, which VocaLink” the mandatory deadline for migration is partially based in Singapore, combines the to SEpA, it will be those banks and benefits of global standard payments processing with local requirements, expertise service providers who demonstrate and implementation resources. rather than building a bespoke solution, customers the most value to their customers that can opt for a ready scheme supported solution and deploy this in a short time frame will benefit from this significant market within their environment. BT re-distribution event.” BT

www.bankingtech.com I 15 Go to www.bankingtech.com for the latest news and comment TRANSACTIONS & PAYMENTS April 2012 Barclays’ joins with Sentenial for SEPA E-invoicing yet to make an impact on SDD mandates businesses says research report arclays Corporate has -invoicing, long touted as a route to greater financial efficiency for business partnered with payment of all sizes, is failing to make an impact, according to research released today Bsystems vendor Sentenial Eby Tradeshift. The global study interviewed over 600 senior financial decision to provide pan-European mandate makers in larger organisations and found that only 8% are very satisfied with their management solutions for the current e-invoicing solution. bank’s SEpA Direct Debit corporate At a time of economic uncertainty – 86% of UK respondents say they are under customers. greater pressure to manage business costs than ever before – the majority of e-invoicing The service will allow customers systems aren’t delivering the cost saving benefits many had hoped for. in fact, invoicing to transition to SEpA Direct Debit, is still a major strain for large businesses, with 48% of invoices received still having to migrating away from the existing in- be scanned or input manually. On average 40 employee hours each week are spent country domestic direct debit services scanning or manually inputting invoices. across Europe as well as being able to The findings of the research are revealed in a report A manifesto for the e-invoicing convert and enrich legacy collection revolution. it shows that large enterprises are generally very eager to adopt e-invoicing files into SEpA-compliant payments. with cost reduction (79%), increased efficiency (77%) and stronger supplier ties (60%) Sentenial’s Origix Corporate service all cited by UK respondents as reasons for making the switch. But, despite the fact that was chosen by Barclays following 60% have tried some form of e-invoicing, only 46% of suppliers have used the systems an extensive market evaluation and that have been put in place. won out based upon the solution’s Nearly half of UK respondents (41%) said it is difficult to get suppliers to adopt comprehensive nature, proven e-invoicing and 36% said it is costly. A quarter (26%) even said that e-invoicing is a track record and the rapid time to financial burden on suppliers. This is particularly problematic, with 47% saying that market offered. e-invoicing is pointless without widespread supplier adoption and 57% agreeing that richard Martin, managing director, e-invoicing adoption would be widespread if it was free to all suppliers. payments & Cash Management On the bright side, the finance department in the enterprise is ready to try new at Barclays Corporate said: “The things – especially when it comes to technology. Nearly two-thirds (60%) of finance Sentenial solution offers both Barclays departments questioned reported that social media functionality is important when and our customers a competitive communicating with customers and suppliers and nearly half (48%) believe p2p advantage. This solution, similar to processes will move to the cloud within two years. Barclays, provides wide pan-European Christian lanng, chief executive and co-founder of Tradeshift, said: “The enterprise coverage with core functionality that has been let down by e-invoicing providers that punish suppliers for using their systems has been tried and tested over many both in terms of cost and time. There’s nothing stopping the move to free e-invoicing years. When selecting a vendor we forever but we’re also asking a new question here: once you have this connection with had to be certain that we chose other businesses, what’s next? it is high time that e-invoicing becomes a beneficial both the right product and the right solution for businesses of all sizes and can then help usher in a new era of financial – partners, so Sentenial’s commitment and business – efficiency.”BT to SEpA and impressive growth in recent years were major factors in our decision.” Clear2Pay launches in Singapore The solution is based around three modules that cover the migration of lear2pay, the provider of next generation payment solutions for financial legacy mandates to SEpA, ongoing institutions has launched its G3 payments Solution for the Singapore financial Mandate Management and the Cservices industry on the back of its SOA Open payment Framework. generation of SEpA Direct Debits. A The company says that this “is a direct follow-on from the partnership Clear2pay market leading eMandate capability is announced with Vocalink on delivering an end- also being rolled out. to-end immediate payments solution for banks”. “This is a direct Sean Fitzgerald, chief executive The G3 scheme will enable Singaporean banks follow-on from of Sentenial said: “Sentenial is very and financial institutions to process low-value pleased to announce this partnership payments in real-time, maximising their ability the partnership with Barclays, a bank with tremendous to deliver innovative and commercially attractive Clear2Pay European coverage and experience. products while minimising settlement risk. Now that the European parliament The G3 immediate payment Solution, announced with has voted to make 1 February 2014 developed by Clear2pay’s ApAC team, which VocaLink” the mandatory deadline for migration is partially based in Singapore, combines the to SEpA, it will be those banks and benefits of global standard payments processing with local requirements, expertise service providers who demonstrate and implementation resources. rather than building a bespoke solution, customers the most value to their customers that can opt for a ready scheme supported solution and deploy this in a short time frame will benefit from this significant market within their environment. BT re-distribution event.” BT

www.bankingtech.com I 15 Payments: IPs RePORt TRANSACTION & PAYMENTS: TREASURY MANAGEMENT April 2012 April 2012

If the price is right ...

The International Payments Summit 2012 featured a lot of talk about pricing issues as banks struggle to understand new business models, writes Heather McKenzie.

One of the recurring themes at this Once again at ipS, it seemed the most year’s International Payments summit interesting innovations were those coming was pricing: financial institutions appear out of the non-bank sector. This could to be struggling over what to charge be a reason that the Clear survey found for payments processing and related only 13% of consumers wanted to use services in a variety of areas. This doubt the UK’s big four high street banks in the about pricing is exacerbated by fears that future; they view the banks as boring and new competitors will come into the market very undesirable. paypal was the 25th and disintermediate the banks. most desirable brand across all sectors Decreasing margins in the payments in the UK – the highest ranked high street business, driven in part by regulation, bank was NatWest at 211th. has led to pricing taking on more Dissatisfaction with banks is not significance. The pricing question was limited to the UK, of course. in March the very closely tied to another theme of Australian Bankers’ Association mounted New rules for old the summit: that the information that a stout defence of its members when a comes with a payment is becoming more newspaper suggested that the Australian Despite the many regulatory, budgetary and technological pressures on banks, they must important than the payment itself. Some bank customers could defect in droves to banks were gouging “near record levels work with their corporate clients to ensure that they understand the dynamics of the organisations recognise this, as Daniel new rivals such as Google and Apple in of fees from ATMs”. The Association industry and what is possible and what is not, writes Sherree DeCovny. Marovitz, founder of Buzzumi, a video the future. Clear’s chief executive, James said banks had not increased ATM direct chat and webinar hosting company, Osmond, said: “We are at the start of a charges at ATMs that they owned. illustrated. Organisations such as Google revolution in how people interact with This, of course, brings us back to Business is being transformed by globalisation, of payments go straight through while still complying see online purchases as an expression money. Banks that fail to lead the agenda the question of pricing, something that technology and regulation. Emerging markets such with OFAC rules. But when checking names in a local of preference, whereas banks see them will struggle to survive. Having a mobile consumer and corporate customers as China and india are capturing a larger percentage language, false positive rates can be quite high. in as individual amounts of money. He said app and a digital guru isn’t enough – it’s are very sensitive to. Some banks have of world trade, forcing companies in Europe and North instances such as this, more resources need to be digital goods totalled $6 billion last year about reinventing the experience of how responded. For example iNG Direct America to redefi ne their strategies. Advances in allocated to adapt systems to comply with regulations, in the US and were expected to reach $12 people manage their money. The choice in Canada made much recently of its technology have led to an explosion in data volumes. and that is happening at the expense of developing billion this year. in this arena, paypal is the is simple: change now, or get left behind.” Thrive Chequing account, which does Meanwhile, new regulations are not only forcing banks innovative products and services for customers. top choice as a payments provider. The Over at the summit, Osmond’s warning not impose fees. peter Aceto, president to do business differently, they are also putting pressure in most jurisdictions, new regulations have not yet idea that similar competition would occur was repeated by a number of speakers. and chief executive, iNG Direct said on their profi t margins. been fi nalised, and the uncertainty is making it diffi cult in the business-to-business space would ian Sherratt, director of corporate strategy the success of Thrive Chequing was These trends are having an impact on the relationship for banks to make commitments. While corporate be considered by some to be ludicrous, at iT infrastructure company SCC, testament to the frustration he hears from between banks and their corporate customers. Banks treasurers acknowledge this, it limits their ability to but Marovitz wasn’t so sure. “Banking in said people are increasingly expecting many Canadians who are “fed up with want to help corporate customers take advantage of understand what is driving the banks’ pricing and how the digital slipstream means leveraging information on demand. These so-called ever-rising bank fees for even the most business opportunities through innovative product and to manage the group of banks they use. As corporate what you know about the client to make digital natives or generation Y consumers basic transactions”. More than 100,000 services offerings, but they also have to ensure that treasurers assess their banking relationships, they their life easier and to try to make your want to be dealt with in a way they feel people are using the service, which iNG customers understand the demands and constraints recognise that some smaller and medium sized banks relationship more profitable,” he said. comfortable with. Direct claims has saved them more than being placed on industry participants. may not be able to afford to offer some services, but Maarten Mol, chief operating officer, These people are also joining the C$18 million in unnecessary bank fees. The past four years has been a period of constant they are unsure which ones will be eliminated. commercial and merchant banking at ABN workforce and are bringing their own One of the speakers at ipS, Jacques change for banks, and it is not over yet. Soon they “You all may not be talking to us as upfront and Amro, highlighted one reason there could be digital technologies with them into the Belissent, head of data initiatives at Mint. will have to comply with the global Basel iii capital as open and as honestly as we would like,” admitted such confusion over pricing. He said there office environment. “Companies such as com, gave an insight into how a free-of- adequacy and liquidity ratios as well as Dodd-Frank Sharon petrey, assistant treasurer at The Coca-Cola was strong resistance by financial institutions Tesco, O2 and Virgin are expanding into charge service can actually deliver value. in the US, MiFiD ii and EMir in Europe and similar Company, while speaking at SOFA. “it’s not that you’re to run payments as a business. “Banks need the banks’ markets,” he said. “These Mint’s online service provides free financial regulations elsewhere. Moreover, governments have trying to hold out: you’re still trying to fi gure it out. But to get rid of the cross-subsidies in payments companies know everything about management advice to customers because stepped up their efforts to combat money laundering i think the risk for corporates is that we could end up between retail and business lines. They also their customers because they offer it can pull together all of a user’s financial and other fi nancial crimes, and banks play an important being surprised.” need to be careful about what they invest in, loyalty cards. people want simple and information into one place. Such a service role in implementing sanctions against countries that And these folks do not like being surprised. because many innovations will not survive in convenient, low-cost solutions.” it is would help financial institutions to gain new support terrorism. Treasurers are responsible for implementing a their current form into the future,” he said. not too late for the banks to play a part customers, he said. According to Ather Williams iii, managing director funding and investment programme as well as hedging Much of the focus was on retail because at the moment there is no clear in such a turbulent environment, financial and head of global payments and FX, Global Treasury foreign exchange and other risks in an effi cient, banking, indicating that this is where a lot leader in digital payments, he said. For institutions are seeking partners such as Mint Solutions, at Bank of America Merrill lynch, regulation cost-effective manner. Often they are involved in of interest and innovation is taking place. those delegates who felt that there were to improve their attractiveness to customers. is putting pressure on profi t margins. Speaking at the commodities, trade fi nance and leasing as well, so it is also the area where new entrants such areas that simply could not be digitised, it is likely that future ipS events will feature Swift Operations Forum Americas event in New York they need information to support those functions too. as Google and Facebook are hovering. he cited the example of Hailo, a mobile more speakers from non-bank companies in March, he illustrated his point with this scenario: Several challenges and risks are associated On the day the summit started, UK application that enables users to hail a that are innovating in the payments space banks can block payments from certain countries, with these operations. A corporate treasury may be brand consultancy Clear released a survey black cab in london and to also pay the and that banks will turn to as partners, so organisations and individuals without compromising responsible for hundreds of business units and bank of 6,000 consumers that suggested UK fare at the end of the trip. they can remain in this space. BT straight-through processing. At BAMl, more than 90% accounts around the world. They need to be able >

16 I www.bankingtech.com www.bankingtech.com I 17 TRANSACTION & PAYMENTS: TREASURY MANAGEMENT April 2012

New rules for old Despite the many regulatory, budgetary and technological pressures on banks, they must work with their corporate clients to ensure that they understand the dynamics of the industry and what is possible and what is not, writes Sherree DeCovny.

Business is being transformed by globalisation, of payments go straight through while still complying technology and regulation. Emerging markets such with OFAC rules. But when checking names in a local as China and india are capturing a larger percentage language, false positive rates can be quite high. in of world trade, forcing companies in Europe and North instances such as this, more resources need to be America to redefi ne their strategies. Advances in allocated to adapt systems to comply with regulations, technology have led to an explosion in data volumes. and that is happening at the expense of developing Meanwhile, new regulations are not only forcing banks innovative products and services for customers. to do business differently, they are also putting pressure in most jurisdictions, new regulations have not yet on their profi t margins. been fi nalised, and the uncertainty is making it diffi cult These trends are having an impact on the relationship for banks to make commitments. While corporate between banks and their corporate customers. Banks treasurers acknowledge this, it limits their ability to want to help corporate customers take advantage of understand what is driving the banks’ pricing and how business opportunities through innovative product and to manage the group of banks they use. As corporate services offerings, but they also have to ensure that treasurers assess their banking relationships, they customers understand the demands and constraints recognise that some smaller and medium sized banks being placed on industry participants. may not be able to afford to offer some services, but The past four years has been a period of constant they are unsure which ones will be eliminated. change for banks, and it is not over yet. Soon they “You all may not be talking to us as upfront and will have to comply with the global Basel iii capital as open and as honestly as we would like,” admitted adequacy and liquidity ratios as well as Dodd-Frank Sharon petrey, assistant treasurer at The Coca-Cola in the US, MiFiD ii and EMir in Europe and similar Company, while speaking at SOFA. “it’s not that you’re regulations elsewhere. Moreover, governments have trying to hold out: you’re still trying to fi gure it out. But stepped up their efforts to combat money laundering i think the risk for corporates is that we could end up and other fi nancial crimes, and banks play an important being surprised.” role in implementing sanctions against countries that And these folks do not like being surprised. support terrorism. Treasurers are responsible for implementing a According to Ather Williams iii, managing director funding and investment programme as well as hedging and head of global payments and FX, Global Treasury foreign exchange and other risks in an effi cient, Solutions, at Bank of America Merrill lynch, regulation cost-effective manner. Often they are involved in is putting pressure on profi t margins. Speaking at the commodities, trade fi nance and leasing as well, so Swift Operations Forum Americas event in New York they need information to support those functions too. in March, he illustrated his point with this scenario: Several challenges and risks are associated banks can block payments from certain countries, with these operations. A corporate treasury may be organisations and individuals without compromising responsible for hundreds of business units and bank straight-through processing. At BAMl, more than 90% accounts around the world. They need to be able >

www.bankingtech.com I 17 TRANSACTION & PAYMENTS: TREASURY MANAGEMENT Go to www.bankingtech.com for the latest news and comment April 2012 MARKETS & INVESTMENTS to collect bank balance information from multiple management system offering this capability enables April 2012 banks and combine it with other information such treasurers to adjust the market value of instruments FPL launches best as forecasted payables, receipts and exposures. on the basis of counterparty credit risk and ensures Technology is critical to this process. compliance with FAS 157 and iFrS 9. practice guidelines Banks can help them aggregate account data Further, the focus on counterparty risk Euroclear and BNP join up for tripartite across all their banks and pool their cash through management is driving eBAM, because it enables for swaps trading electronic bank account management. in addition, visibility of counterparty relationships and exposures, collateral management iX protocol limited has developed large corporates can participate in Swift’s Standardised and promotes cash visibility and efficient account uroclear Bank and BNp paribas Securities Services are to enable their mutual best practice recommendations Corporate Environment programme. This is a closed mandate administration. clients to benefit from access to a larger pool of collateral for triparty transactions. Fto support the trading of Credit user group, administered by Swift, where corporates The flipside of the counterparty risk issue is that E The agreement will enable the two organisations’ mutual clients to use fixed- Default Swaps and interest rate Swaps. can interact with financial institutions. banks have capital constraints and they have to income and equity assets held with BNp paribas Securities Services as collateral in Working with a group of investment Moreover, banks have set up money market portals manage deposits differently. That said, it is possible for triparty managed transactions at Euroclear Bank. banks “keen to encourage the adoption that offer interoperability so corporate treasurers do banks and their customers to benefit in an environment Client securities to be used as collateral will flow freely between the two organisations, of standards by existing and emerging not have to go to several platforms to do a transaction. where interest rates are low and the sensitivity to while BNp paribas Securities Services always remains the local custodian of the assets. fixed income market venues”, Fpl has These platforms may be perfectly suitable when doing counterparty risk is high. When client securities are no longer needed as collateral by Euroclear Bank, they will developed best practices for the trading a foreign exchange transaction to settle a landing fee “We’re trying to look at ways to lengthen the be reinstated into the main client account held at BNp paribas Securities Services. of CDS and irS products. “Written by for a corporate plane, for instance. But treasurers duration of certain liability products,” said Christopher The initiative consists of a multi-market industry experts, these recommendations would be reluctant to use them when they are putting Foskett, managing director and global head of sales collateral programme to be rolled-out in the provide guidelines to trading venues together a highly structured trade. at Jp Morgan Treasury Services. “That will allow us to next few months, delivering much-needed on how FiX can be implemented in a “i like to know that if i buy an pay our clients some more return and then also get us collateral flexibility and optimisation. “It will offer even greater standardised manner to deliver maximum interest rate product my bank benefit from a Basel capital ratio standpoint.” Frederic Hannequart, chairman of optimisation of collateral industry-wide benefit,” the organisation is behind the curtain, and that i Given the complexity of the landscape, treasury Euroclear Bank, said: “Together, BNp to our mutual clients” said in a statement. “Additionally, “You all may not be have a way to work through that management systems have become more paribas and Euroclear Bank will help our the evolving business needs of these particular product,” said petrey. sophisticated. in the past, the software focused on clients achieve greater risk protection and asset classes have been reviewed and talking to us as up “i want to know i can reach the deal processing, and some systems were essentially a smarter use of their assets as collateral. This enhancements added to FiX, to ensure it front and as open bank ... because maybe there’s database of treasury deals. But today, solutions such is particularly important as demand for collateral increases. By joining forces, we will can comprehensively meet all business credit to be gained in that direct as iT2 enable treasurers to implement best practices alleviate one of the challenges of collateral fragmentation by making the transfer of needs as effectively as possible.” and as honestly as we relationship.” and establish controls and reporting processes. Using collateral to the right place at the right time as seamless and operationally simple as As Dodd–Frank reforms seek to would like.” Today, many companies key performance indicators, treasurers can not only possible. We are delighted to be partnering with BNp paribas in this regard.” achieve greater market transparency by Sharon Petrey, The are cash rich, but as petrey measure their performance in cash management, Alain pochet, head of clearing, settlement and custody at BNp paribas Securities requiring most types of OTC derivatives said: “Cash is a great problem foreign exchange, funding and investments, but can Services, said: “This type of partnership is key for both organisations. it will offer even to be cleared through clearing houses Coca-Cola Company to have, but it’s also one that ensure they are in compliance with policy. greater optimisation of collateral to our mutual clients by accessing the Euroclear Bank and traded on swaps execution facilities keeps you up at night.” A treasurer may have a policy of hedging 75% of triparty platform – in addition to BNp paribas’ in-house collateral management offering.” BT (SEFs), a surge in new market venues is Coca-Cola operates in 200 foreign exchange exposures within a 60-day period. expected within the US. Similar reforms countries and has billions of They may be required to secure a certain percentage are also expected to emerge from the dollars in cash offshore, so she needs to know where of their funding portfolio in fixed rate instruments. On Clearstream and Deutsche partner to upcoming MiFiD ii regulations in Europe. the cash is and how it is invested. interest rates are low the operational side, they need to ensure they make Encouraging adoption of FiX by new and the yield curve is flat, so petrey has to do her best payments on time because late payments can incur facilitate market access to Russia and existing venues will significantly to take advantage of interest rate differentials across interest costs and jeopardise trading relationships. iT2 increase efficiencies and cost savings for the globe. software provides automated management reporting learstream and Deutsche Bank, partners in the russian market for six years, all participants within the fixed-income Since capital preservation is the primary goal, tools to monitor and report on compliance. continue to develop new services the region. Clearstream, via its russian markets, reckons Fpl. BT counterparty risk has become a major concern. For some corporate treasuries it is more efficient to Cagent Deutsche Bank Moscow, now has successfully settled its first domestic When lehman Brothers collapsed in 2008, corporate identify the risks and set the policy for managing them, government bond transaction on an over-the-counter basis. ■ www.fixprotocol.org treasurers were worried that their deposits would be but then outsource the management and execution This type of transaction represents a significant step forward in the liberalisation of safe and their foreign exchange hedges would remain functions to a third party. To meet this demand, the russian government bond market: Clearstream customers can now “safekeep” NYSE Technologies, the commercial intact. More recently, as Europe plunged into economic BAMl works with iT2 software to offer its Managed russian government bonds (OFZ bonds) in addition to russian equities. The technology division of NYSE Euronext, turmoil, many US companies pulled their money back Treasury and liquidity Services. The bank collects and expansion of the service for russia has been made possible by recent changes in is extending its Secure Financial into US-based financial institutions. Currently, treasury consolidates forecasts, cash positions and exposures the local securities market regulation. The changes were developed through close Transaction Infrastructure (SFTI) policies tend to mandate that investments are spread and reports on them, and it executes hedges according collaboration between local market participants and regulators. network to the Singapore Exchange across a diverse range of banks and asset classes to the customer’s policy. Mark Gem, member of the executive board and head of business management data centre in Singapore. With the including bank deposits and money market funds. Microsoft’s Bill Gates once said: “We always at Clearstream, said: “Clearstream was the first iCSD to establish a service for SFTI network in SGX’s data centre, To this end, treasurers need to measure, monitor and overestimate the change that will occur in the next two russian equities. We have now again demonstrated our ongoing commitment to all 1,600 SFTI clients world-wide manage counterparty risk in real time. years and underestimate the change that will occur in the market and the region: The fact that rouble-denominated bonds are eligible for can access SGX’s derivatives and “They’re focused on having good counterparty risk the next 10; don’t let yourself be lulled into inaction.” tripartite collateral use shows that we are taking a holistic approach to the evolution securities markets. Qualified investors policies in place and ensuring the cash is invested His comment is clearly relevant for banks and how of the russian bond market. We will continue to implement the positive market in Singapore can also seamlessly within those policies,” says patrick Coleman, regional they handle their corporate customer relationships. developments in russia that will be phased in during the course of 2012.” access NYSE Liffe the European-based general manager, Central Europe, Middle East & Africa, Globalisation, technology and regulation are already Thibaud de Maintenant, global head of direct securities services at Deutsche Bank, derivatives exchange of NYSE Euronext, at iT2 Treasury Solutions. having a fundamental impact on business and in said: “We are very pleased to partner with Clearstream and to provide a robust and by establishing a local connection from User-defined counterparty credit risk indicators, a decade the world will look much different than it comprehensive settlement link to the russian market. This is an important moment for their Order Management Systems to including market sensitive indicators such as equity does today. Through an open dialogue, banks can the russian economy and we are very happy to facilitate access to the local government the SGX data centre. SGX co-location price volatility and CDS spreads, are now more understand how they can meet the evolving needs bond market for a renowned international market participant such as Clearstream. We are customers will also be able to connect commonly used as a reliable indicator for many of their corporate customers while managing their delighted about this cooperation as it clearly demonstrates our strength in Eastern Europe to NYSE Liffe through the SFTI network treasuries’ purposes than credit ratings. A treasury expectations given the constraints on the industry. BT and our dedication and commitment to the russian market.” BT access point. BT

18 I www.bankingtech.com www.bankingtech.com I 19 Go to www.bankingtech.com for the latest news and comment MARKETS & INVESTMENTS April 2012 FPL launches best practice guidelines Euroclear and BNP join up for tripartite for swaps trading collateral management iX protocol limited has developed uroclear Bank and BNp paribas Securities Services are to enable their mutual best practice recommendations clients to benefit from access to a larger pool of collateral for triparty transactions. Fto support the trading of Credit E The agreement will enable the two organisations’ mutual clients to use fixed- Default Swaps and interest rate Swaps. income and equity assets held with BNp paribas Securities Services as collateral in Working with a group of investment triparty managed transactions at Euroclear Bank. banks “keen to encourage the adoption Client securities to be used as collateral will flow freely between the two organisations, of standards by existing and emerging while BNp paribas Securities Services always remains the local custodian of the assets. fixed income market venues”, Fpl has When client securities are no longer needed as collateral by Euroclear Bank, they will developed best practices for the trading be reinstated into the main client account held at BNp paribas Securities Services. of CDS and irS products. “Written by The initiative consists of a multi-market industry experts, these recommendations collateral programme to be rolled-out in the provide guidelines to trading venues next few months, delivering much-needed on how FiX can be implemented in a collateral flexibility and optimisation. “It will offer even greater standardised manner to deliver maximum Frederic Hannequart, chairman of optimisation of collateral industry-wide benefit,” the organisation Euroclear Bank, said: “Together, BNp said in a statement. “Additionally, paribas and Euroclear Bank will help our to our mutual clients” the evolving business needs of these clients achieve greater risk protection and asset classes have been reviewed and smarter use of their assets as collateral. This enhancements added to FiX, to ensure it is particularly important as demand for collateral increases. By joining forces, we will can comprehensively meet all business alleviate one of the challenges of collateral fragmentation by making the transfer of needs as effectively as possible.” collateral to the right place at the right time as seamless and operationally simple as As Dodd–Frank reforms seek to possible. We are delighted to be partnering with BNp paribas in this regard.” achieve greater market transparency by Alain pochet, head of clearing, settlement and custody at BNp paribas Securities requiring most types of OTC derivatives Services, said: “This type of partnership is key for both organisations. it will offer even to be cleared through clearing houses greater optimisation of collateral to our mutual clients by accessing the Euroclear Bank and traded on swaps execution facilities triparty platform – in addition to BNp paribas’ in-house collateral management offering.” BT (SEFs), a surge in new market venues is expected within the US. Similar reforms are also expected to emerge from the Clearstream and Deutsche partner to upcoming MiFiD ii regulations in Europe. Encouraging adoption of FiX by new facilitate market access to Russia and existing venues will significantly increase efficiencies and cost savings for learstream and Deutsche Bank, partners in the russian market for six years, all participants within the fixed-income continue to develop new services the region. Clearstream, via its russian markets, reckons Fpl. BT Cagent Deutsche Bank Moscow, now has successfully settled its first domestic government bond transaction on an over-the-counter basis. ■ www.fixprotocol.org This type of transaction represents a significant step forward in the liberalisation of the russian government bond market: Clearstream customers can now “safekeep” NYSE Technologies, the commercial russian government bonds (OFZ bonds) in addition to russian equities. The technology division of NYSE Euronext, expansion of the service for russia has been made possible by recent changes in is extending its Secure Financial the local securities market regulation. The changes were developed through close Transaction Infrastructure (SFTI) collaboration between local market participants and regulators. network to the Singapore Exchange Mark Gem, member of the executive board and head of business management data centre in Singapore. With the at Clearstream, said: “Clearstream was the first iCSD to establish a service for SFTI network in SGX’s data centre, russian equities. We have now again demonstrated our ongoing commitment to all 1,600 SFTI clients world-wide the market and the region: The fact that rouble-denominated bonds are eligible for can access SGX’s derivatives and tripartite collateral use shows that we are taking a holistic approach to the evolution securities markets. Qualified investors of the russian bond market. We will continue to implement the positive market in Singapore can also seamlessly developments in russia that will be phased in during the course of 2012.” access NYSE Liffe the European-based Thibaud de Maintenant, global head of direct securities services at Deutsche Bank, derivatives exchange of NYSE Euronext, said: “We are very pleased to partner with Clearstream and to provide a robust and by establishing a local connection from comprehensive settlement link to the russian market. This is an important moment for their Order Management Systems to the russian economy and we are very happy to facilitate access to the local government the SGX data centre. SGX co-location bond market for a renowned international market participant such as Clearstream. We are customers will also be able to connect delighted about this cooperation as it clearly demonstrates our strength in Eastern Europe to NYSE Liffe through the SFTI network and our dedication and commitment to the russian market.” BT access point. BT

www.bankingtech.com I 19 MarkET & INvESTMENTS: NEWS April 2012

Omgeo sees fixed income players adopt automation mgeo, the global post-trade Omgeo added To Be Announced – TBA in fixed income volumes, including notable transaction processor, has seen – coverage to support basic processing, growth in both money market securities O“significant” growth in fixed with additional functionality, including and TBAs. Money market securities income volume across its transaction the electronic matching of trade delivery volumes grew by 62% while TBAs saw services, including Omgeo Central Trade stipulations, to be rolled out by end of a 152% increase, demonstrating the Manager and Omgeo Oasys. in 2011, 2012. increased demand for low-risk fixed Omgeo’s total fixed income transaction income products in a volatile market. volumes exceeded the previous year’s by Other products experiencing strong 21% globally, with 9.9 million fixed income growth in 2011 included convertible transactions in 2011 compared to 8.2 “Factors such as market bonds (42% growth), mortgage-backed million in 2010. This growth confirms the volatility and regulatory securities (30% growth) and federal increased number of market participants agency securities (29% growth). embracing and adopting automated uncertainty are pushing Omgeo Alert, a web-based global solutions in this area. firms to adopt automated database for settlement and account Specifically, Omgeo CTM, a central instructions (Si), automatically enriches matching service for cross-border and middle- and back-office Omgeo CTM and Omgeo Oasys with non-US domestic trade processing, processes in instruments accurate and compliant Sis. As a result experienced a 38% increase in fixed beyond equities.” of the increased use of Omgeo CTM income volumes overall, highlighting and Omgeo Oasys for fixed income increased demand for automated central transactions, Alert also experienced trade matching in a key asset class for a significant increase in fixed income firms globally. regionally, the Americas “TBAs encompass a significant instructions. Today, over half of all Alert experienced the highest growth rate in proportion of the US fixed income market settlement instructions are fixed income. Omgeo CTM fixed income volumes at 85% and are second only to treasuries in terms According to Arthur: “Omgeo’s strong year-on-year, which was closely followed of average daily trading volume,” said fixed income growth in 2011 underscores by Asia at 69%. Europe continued to Kevin Arthur, director of Fixed income at how factors such as market volatility and lead the way in total volume, processing Omgeo. “it is vital for firms like Omgeo regulatory uncertainty are pushing firms almost 1.5 million fixed income allocations to support the continued growth of to adopt automated middle- and back- on Omgeo CTM in 2011 alone. the fixed income markets by providing office processes in instruments beyond During the past year, Omgeo further fully automated post-trade processing equities. We anticipate the global fixed strengthened its fixed income capabilities solutions that allow companies to scale income markets will only continue to grow in Omgeo CTM by adding support for while standardising their operations.” in 2012. As a result, these increased trade specified mortgage-backed securities Omgeo Oasys, the company’s US volumes will continue to push the case for that were issued by Fannie Mae, Freddie domestic trade allocation and acceptance greater levels of automation and reduced Mac and Ginnie Mae. in addition, service, saw a 25% year-on-year increase risk.”BT

Orc Group, a provider of technology and TRG in partnership with UnaVista services for the global financial industry, rG post Trade Services and UnaVista, the london Stock Exchange’s is to separate three operating companies compliance and post-trade services platform, have partnered to combine to allow them to “better focus on their TTrG’s consultancy and implementation services with UnaVista’s suite of respective product and customer niches. operational risk solutions to offer a comprehensive suite of services. Orc, Neonet and CameronTec will continue Mark Husler, head of business development at the exchange said: “We are very its operations as before. Thomas Bill, chief excited by our new partnership with TrG. By combining UnaVista’s cutting edge executive of the group, has decided to matching, reconciliation and reporting technology with the excellent regulatory leave the company, following the separation expertise, remedial and implementation services of TrG, we now offer our client and once a successor has been installed. community of over 500 companies a complete solution with access to a wide range of regulatory compliance advice and consultancy.” Post-trade provider Traiana has been Kiri Self, chief executive of TrG said: “Both parties are fully committed to certified to provide real-time connectivity improving operational efficiency, reducing risk and ensuring regulatory compliance. to IntercontinentalExchange, an operator Consequently, we believe that by leveraging our unparalleled depth of post- of global OTC markets, clearing houses trade expertise and aligning this with UnaVista’s client solutions and our shared and regulated futures exchanges. The commitment, we can achieve these goals.” addition of ICE to Traiana Harmony Through the partnership, TrG is able to offer UnaVista clients consultancy services CCP Connect now gives prime brokers, to address a broad range of operational risk, reconciliation and regulatory challenges executing banks and buy-side firms and issues. These include post trade audits and operational compliance reviews, access to every clearing house that has operational risk assessments, regulatory impact and change analysis, solution announced support for clearing of foreign design and implementation support. BT exchange derivatives. BT

www.bankingtech.com I 21 MarkET & INvESTMENTS: NEWS April 2012

www.bankingtech.com I 21 Market & InvestMents: news analysIs Go to www.bankingtech.com for the latest news and comment April 2012 RETAIL Regulatory issues drive sell-side IT spend April 2012 A new report from Rule Financial shows that sell-side firms are spending more in the face of regulation, but the buy-side is relying on them to make the transition Datamonitor: customers paying more for banking services sell-side firms are making large changes awareness reinforces the assumption that Impact of collateral charging on to their operations and It, investing the buy-side views the consequences of returns: reating more direct revenue earnings growth remain impressive if which benefits packaged accounts can heavily in client execution and clearing Dodd-Frank as a regulatory burden, rather ■ 67% of buy-side respondents believe streams from current accounts will providers prove capable of overcoming bring to specific customer groups and propositions that will become operational than as a positive driver to instigate a collateral charging will have an impact on Cbe vital to banks, especially given key challenges. then create products targeted at these in 2012. The buy-side is taking a different change in their business model. their returns, with 43% of the respondents the onus on cost control in 2012, says a “The new report details a number groups. To do this, banks must leverage approach, placing a heavy reliance on the “The sheer scale of change to the classing the impact as ‘significant’. new report from Datamonitor. of challenges that must be overcome industry customer research and their own sell-side to provide a solution to the problems global OTC derivatives markets agreed Decision making process: The free-if-in-credit model remains if the packaged account market is to customer level information. created by the new regulation. Whilst 70% by the G20 has overwhelmed many of the ■ 55% of the sell-side have already dominant in the UK but earnings from fulfil its potential,” says Mays. “The of the sell-side claim to have finalised their regulatory bodies. Despite the G20 target completed their ‘build or buy’ decisions, packaged accounts have increased construction of the package on offer Report Highlights and Key Messages ‘to-be’ business process design, only 20% being the end of 2012, there is still no and by the end of Q2 2012, 89% will have significantly in the last five years. is the single biggest limitation on the ■ The packaged account is already of buy-side firms have done so. finalised regulatory landscape, no specific done so, whereas only 17% of the buy- Datamonitor’s new Willingness to pay for size of the market. packaged account earning a significant amount of revenue The findings come from a study into compliance dates, and no completion side have already made these decisions, UK Current Accounts report shows that providers are also failing to differentiate for the UK retail banking market but with the impact of the Dodd-Frank Act on the of the rules mandating clearing in any with 50% planning to reach a decision in there has been a growth in packaged their offerings, exacerbating the problem growth in both the total size of the market buy and sell-sides carried out by iT and jurisdiction. it is not, therefore, surprising Q1/Q2 2012. account uptake since 2006, from 15.0% of “fit.” Travel insurance, car breakdown and the monthly fee per account, the business consultancy rule Financial. therefore that confusion reigns,” said timelines for offering client services: to 17.8% of those consumers with current cover, and enhanced overdraft facilities opportunities are impressive. On average, spending by sell-side David Holcombe, specialist in markets ■ 70% of sell-side banks already offer accounts. This represents a current are the most likely features to be found on ■ The construction of the package on banks with aggressive OTC strategies and trading at rule Financial. client clearing of OTC derivatives, with market total of 9.65 million packaged a UK packaged account. These features offer is the single biggest limitation on has been in the order of $10-50 million “This uncertainty has not stopped the 20% planning to offer this by the end of accounts. This modest market growth appear again and again in the packaged the size of the market for packaged annually since 2010. At the other end of sell-side in making a significant investment in 2012; 10% have no plans to offer this has been accompanied by a more account market and, although useful for accounts. This is the clear message that the spectrum, those banks planning to new systems and processes, which become service. dramatic increase in the average price some consumer groups, limit the scope emerges from the customer responses to adopt a ‘franchise protecting’ minimum operational in 2012. These institutions have ■ 60% of sell-side banks claim to already point. According to Office of Fair Trading of demand as they fail to appeal to Datamonitor’s FSCi Survey. day-1 offering have spent less than $5 ambitions to thrive in the new landscape, offer cross-asset margin calls, with 20% data the average monthly fee was only many other potentially profitable ■ Too few UK current account providers million annually over the same period. so they are not waiting for completed rules planning to offer this service within 12 GBp5.34 in 2006, compared to GBp12.85 consumer segments.” have attempted to create packaged As expected, buy-side spend has been from the regulators to launch their client months; 10% plan to offer this service in 2011 as per Datamonitor’s Financial The marketing approach taken with products geared towards consumers’ negligible in comparison, and is estimated clearing propositions. The ‘golden circle’ beyond 12 months, and 10% have no Services Consumer insight Survey 2011. packaged accounts must also change if lifestyles. rather than aiming to create a to be in the order of $1 million to $2 million of large banks seeking high market share plans to offer this service. “Fee-based packaged accounts are banks wish to seek wider adoption, says package that suits a particular consumer for each participant this year. have, on average, spent over $100 million ■ 60% of sell-side banks already offer already earning a significant amount of the report. Current account providers segment, most providers have instead The regulatory onslaught hitting the each in building their propositions, to date. indicative margins (predicted margin by revenue for UK retail banks,” says Will should look beyond outdated affluence relied on a price point scale alongside full OTC lifecycle has forced the sell-side The cost to the buy-side of trading OTC CCp), and 30% plan to offer this service Mayne, senior analyst and author of models and instead create packaged a roughshod premium version of the to appraise their operating models. The derivatives will certainly increase, with the within 12 months; 10% have no plans to the report. “Despite growth in both the products that are designed to appeal product. BT research finds that banks are converging expectation being that charges for collateral offer this service. total size of the market and the monthly to their target consumer segments. OTC, exchange, prime and collateral will have a significant impact on their returns. ■ 35% of sell-side banks already offer fees per account, the opportunities for providers need to really think about www.datamonitor.com businesses into a single organisational Consequently, buy-side firms are looking to collateral upgrades / transformation, and entity. Due to its significance on p&l, clearing brokers and futures commission 55% plan to offer this service within the the collateral management department merchants to minimise the increase in next 12 months. 10% have no plans to Innovation fuels is gaining in importance and receiving cost of the central counterparty model, via offer this service. Lloyds to deploy Europe’s largest heightened attention and investment. collateral optimisation and pricing. Organisational structure changes: growth for retail Basel iii is driving closer integration of the Key findings of the research: ■ 65% of sell-side banks have made complaint handling solution securities lending and repo units. Competitive differentiation: organisational changes to address loyds Banking Group is developing what will eventually be Europe’s largest bank leaders The survey highlighted that sell-side ■ Advanced client service (e.g. financing OTC clearing, with 35% creating new complaints handling technology deployment. The bank is working with Charter here is a growing polarisation banks are taking a pragmatic approach to and collateral) is considered to be roles specifically for the OTC clearing. LUK, aprovider of enterprise complaint and feedback management software. between banks replacing core execution support, choosing to support the differentiating factor in each sell- 70% of sell-side banks have made The system, known as Charter Continuum, will eventually be deployed across all Tsystems to remain profitable and their clients at any venue required. side bank’s proposition, with 78% key appointments to improve trade of the bank’s branches, call centres and other customer-facing business units. grow, and those who are not, according However the research indicates that the of respondents planning to compete processing, affirmation and confirmation Martin Dodd, Customer Services Director at lloyds Banking Group, said: “At to an iDC Financial insights White paper – buy-side is overwhelmingly in favour with their peers on this point. This is processes. lloyds Banking Group, we’re committed to delivering the highest levels of customer sponsored by vendor Temenos. of Bloomberg, with the majority of unsurprising, given that OTC business Definition of target application service. We are introducing the Charter system to help us manage complaints in the Renovate to Innovate: The Time Is respondents identifying it as the execution models are moving towards charging for infrastructure’s logical architecture: most effective and efficient way.” Now for European Retail Banking finds venue of choice, trailed by Tradeweb and these services. ■ 70% of sell-side banks have already Charter chief executive paul Clark said: “lloyds will benefit from having a single that retail banks need to review and iCE, both with just over half the support ■ Sell-side and buy-side opinions differ defined their target application complaints management system running across its entire group. The consolidated update their business models and iT that Bloomberg received. There appears greatly on the perceived importance of infrastructure’s logical architecture, with approach will allow for greater consistency and improved efficiency across the infrastructures to remain profitable in the to be little appetite to use the inter-dealer cost efficiencies, with the sell-side placing the remaining 30% planning to complete bank’s operations – ensuring that all complaints are dealt with in exactly the same face of regulations and competition from brokers that are currently readying their lower importance on cost efficiency than this before H2 2012. Only 20% of buy- way and to the same standard. ” new entrants. The research also finds that swap execution facility platforms. the buy-side, who ranked it as the highest side firms have conducted this definition Firm-specific complaints data published by the Financial Services Authority 75% of the fastest-growing retail banks The buy-side displayed much competition factor. 33% of sell-side firms process already; 45% are intending to every six months since 2010 was aimed at increasing transparency and to push have replaced their legacy architecture. confusion over the mandated OTC clearing surveyed state cost efficiency is a high carry out this work before H2 2012, 25% complaints up the business agenda within management. John liver, EMEA global rachel Hunt, research director at iDC timelines, with respondents citing a range differentiator in their offering, whereas are planning to undertake this in Q3/Q4 regulatory reform leader at Ernst & Young said: “Firms have grasped the importance said: “Those retail banks who complete of deadlines from 1 September 2012, 65% of buy-side firms plan to use this as 2012, and the remaining 10% are unsure of this issue at the highest level, and all firms now have chief executive or senior core system renovation early will reap through to 1 September 2015. This lack of a key measure in their dealer selection. when this work will be done. BT management engagement with complaints.” BT benefits from their ability to innovate.”BT

22 I www.bankingtech.com www.bankingtech.com I 23 Go to www.bankingtech.com for the latest news and comment RETAIL April 2012

Datamonitor: customers paying more for banking services reating more direct revenue earnings growth remain impressive if which benefits packaged accounts can streams from current accounts will providers prove capable of overcoming bring to specific customer groups and Cbe vital to banks, especially given key challenges. then create products targeted at these the onus on cost control in 2012, says a “The new report details a number groups. To do this, banks must leverage new report from Datamonitor. of challenges that must be overcome industry customer research and their own The free-if-in-credit model remains if the packaged account market is to customer level information. dominant in the UK but earnings from fulfil its potential,” says Mays. “The packaged accounts have increased construction of the package on offer Report Highlights and Key Messages significantly in the last five years. is the single biggest limitation on the ■ The packaged account is already Datamonitor’s new Willingness to pay for size of the market. packaged account earning a significant amount of revenue UK Current Accounts report shows that providers are also failing to differentiate for the UK retail banking market but with there has been a growth in packaged their offerings, exacerbating the problem growth in both the total size of the market account uptake since 2006, from 15.0% of “fit.” Travel insurance, car breakdown and the monthly fee per account, the to 17.8% of those consumers with current cover, and enhanced overdraft facilities opportunities are impressive. accounts. This represents a current are the most likely features to be found on ■ The construction of the package on market total of 9.65 million packaged a UK packaged account. These features offer is the single biggest limitation on accounts. This modest market growth appear again and again in the packaged the size of the market for packaged has been accompanied by a more account market and, although useful for accounts. This is the clear message that dramatic increase in the average price some consumer groups, limit the scope emerges from the customer responses to point. According to Office of Fair Trading of demand as they fail to appeal to Datamonitor’s FSCi Survey. data the average monthly fee was only many other potentially profitable ■ Too few UK current account providers GBp5.34 in 2006, compared to GBp12.85 consumer segments.” have attempted to create packaged in 2011 as per Datamonitor’s Financial The marketing approach taken with products geared towards consumers’ Services Consumer insight Survey 2011. packaged accounts must also change if lifestyles. rather than aiming to create a “Fee-based packaged accounts are banks wish to seek wider adoption, says package that suits a particular consumer already earning a significant amount of the report. Current account providers segment, most providers have instead revenue for UK retail banks,” says Will should look beyond outdated affluence relied on a price point scale alongside Mayne, senior analyst and author of models and instead create packaged a roughshod premium version of the the report. “Despite growth in both the products that are designed to appeal product. BT total size of the market and the monthly to their target consumer segments. fees per account, the opportunities for providers need to really think about www.datamonitor.com

Lloyds to deploy Europe’s largest Innovation fuels complaint handling solution growth for retail loyds Banking Group is developing what will eventually be Europe’s largest bank leaders complaints handling technology deployment. The bank is working with Charter here is a growing polarisation LUK, aprovider of enterprise complaint and feedback management software. between banks replacing core The system, known as Charter Continuum, will eventually be deployed across all Tsystems to remain profitable and of the bank’s branches, call centres and other customer-facing business units. grow, and those who are not, according Martin Dodd, Customer Services Director at lloyds Banking Group, said: “At to an iDC Financial insights White paper – lloyds Banking Group, we’re committed to delivering the highest levels of customer sponsored by vendor Temenos. service. We are introducing the Charter system to help us manage complaints in the Renovate to Innovate: The Time Is most effective and efficient way.” Now for European Retail Banking finds Charter chief executive paul Clark said: “lloyds will benefit from having a single that retail banks need to review and complaints management system running across its entire group. The consolidated update their business models and iT approach will allow for greater consistency and improved efficiency across the infrastructures to remain profitable in the bank’s operations – ensuring that all complaints are dealt with in exactly the same face of regulations and competition from way and to the same standard. ” new entrants. The research also finds that Firm-specific complaints data published by the Financial Services Authority 75% of the fastest-growing retail banks every six months since 2010 was aimed at increasing transparency and to push have replaced their legacy architecture. complaints up the business agenda within management. John liver, EMEA global rachel Hunt, research director at iDC regulatory reform leader at Ernst & Young said: “Firms have grasped the importance said: “Those retail banks who complete of this issue at the highest level, and all firms now have chief executive or senior core system renovation early will reap management engagement with complaints.” BT benefits from their ability to innovate.”BT

www.bankingtech.com I 23 ReTaiL: News ReTaiL: News April 2012 April 2012

Cybercrime a growing threat says PwC report Saxo targets UK retail investors Olympics to boost ybercrime has risen up the ranks over the last year to When a cybercrime incident occurs, the first few hours are axo Bank, the online trading and investment specialist, has launched its new mobile banking become the second most commonly reported economic crucial. it is particularly important to react quickly and decisively, as Modern Wealth Management platform for retail investors in the UK. Ccrime affecting companies in the financial services sector the consequences of not doing so can be severe in terms of both s Coinciding with the launch, Saxo commissioned a survey of more than he mobile banking and mobile after asset misappropriation (which remains the traditional and most financial and non-financial damage. 500 retail investors which found that over 78% of respondents already manage at payments battleground in the popular way of defrauding an organisation), according to the latest Clark said: “We expected most organisations to have cybercrime least some of their investments online. 71% would feel confident to make decisions TUK is heating up as industry findings from pwC’s global economic crime survey. incident response mechanisms in place. To our surprise, only 18% themselves if they had all relevant information available. When asked about fees players manoeuvre to take advantage Cybercrime accounted for 38% of economic crime incidents of FS respondents said they had in place all five measures specified 25% of respondents said they have no clear understanding of the fees they pay or of the opportunities according to a compared to 16% for other industries in the survey which in total in our survey. it appears that some FS organisations are complacent are prepared to pay for managing their wealth. At the same time cost is the most report commissioned by digital banking analysed 3,877 responses spanning 78 countries, with 23% of about the risks that cybercrime poses, in spite of serious concerns important factor for investors, followed by good advice and transparency. provider intelligent Environments, which those ( 878 respondents) coming from the FS sector. about potential damage arising from cyber threats. Karsten Henriksen, head of Modern Wealth Management for the UK market said: investigated the views of mobile strategists While FS organisations have historically taken significant steps “This is an important market for us, and we can see from our survey that MWM within companies such as O2, Microsoft to control and safeguard their customers’ data, the survey shows Only 18% of respondents said they had fits right into the requirements and expectations of today’s investors. The wealth and lloyds Banking Group. they are nevertheless concerned about the growing threat. Half of management space in the UK is well developed and investors are sophisticated, and participants said that with significant FS respondents perceive the risk of cybercrime to have increased in in place all five measures specified in the MWM meets their needs by providing simple, easy to use tools and offers transparent investment going into the mobile banking the last 12 months, compared with 36% for other industries. survey. It appears that some organisations fees and guidance for those who are just beginning to take their wealth into their and mobile payments infrastructure for Some of the developing technologies such as using ‘apps’ to own hands.” the 2012 london Olympics, the games access banking services and mobile phones to make payments are are complacent about the risks that The platform was developed with a focus on usability and simplicity to provide are poised to provide a pivotal moment likely to increase, rather than decrease these risks. cybercrime poses. guidance to self-directed investors and make wealth management as straight- in the delivery and adoption of mobile Some 45% of FS respondents suffered frauds in the last year, a forward and transparent as possible. The platform features integrated Morningstar financial services in the UK. much higher figure than the 30% reported by other industries. This “Overall responsibility for managing cybercrime risks rests tools and data for funds and ETFs. A new tool called ideator helps clients determine Banks such as Barclays, NatWest and is an indicator that the sector remains very attractive to criminals due with senior management. it is therefore essential that senior their general risk profile and get started with model portfolios of either funds or ETFs lloyds have been making waves in this space, to the significant amount of cash, assets and sensitive client data management understand the potential risks and opportunities the independently selected by Morningstar investment Consultants to match each of the but on the whole financial institutions have that is available to them as well as the nature of the industry. cyber world can present and ensure that there is clear accountability profiles. Clients can individually change weightings or entirely remove funds or ETFs been somewhat behind the pace. However, Andrew Clark, forensic services partner at pwC, said: “The and responsibility within the organisation for dealing with these risks from the model portfolio before investing. investors can also manage their iSA and despite the roll out of recent mobile banking rise in cybercrime is not so surprising given the sector holds large and opportunities.” Sipp investments through the platform, and invest in the UK and overseas equity and mobile offerings such as Barclays pingit, volumes of the type of data cybercriminals are interested in and in addition to the growth in cybercrime, asset misappropriation markets, gilts and corporate bonds, a wide range of ETFs and over 2,400 managed only one respondent believes that to date there is an established underground economy servicing the needs and accounting fraud were the other two types of economic crime funds. Costs for using MWM are fully transparent, upfront fees on fund purchases are the UK has been faring well in its delivery of of the market for stolen and compromised data. However, our that increased over the last year, according to survey respondents. zero and equity and ETF trades cost £9.95 for orders up to £75,000. BT mobile financial services.BT survey shows cybercrime accounts for a much greater proportion of The rise in accounting fraud from 19% in 2009 to 26% in 2011 economic crime in the FS sector than in other industries. differs from other industries where it fell significantly from 38% in “Cybercrime puts the FS sector’s customers, brand and 2009 to 22% in 2011. Mobile handsets are weak link in online banking reputation at significant risk. regulators are increasingly viewing “The FS sector’s increase in accounting fraud may be partly due cybercrime as a key area of focus and financial institutions are to greater incentives for staff to hit targets, together with other factors ecurity specialist Trusteer has recently uncovered two impersonates the victim using their stolen personal information expected to have appropriate systems and controls in place to fight such as personal pride in being seen as a success and meeting a online banking fraud schemes designed to defeat one (e.g., name, address, phone number, etc.). This allows the this growing threat. ” myriad of stakeholders’ expectations,” said Clark. stime password (OTp) authorisation systems used by many fraudster to acquire a police report that lists the mobile device Asked what aspects of cybercrime they were most concerned The survey also showed there has been a 50% increase in senior banks. Unlike a previous attack Trusteer discussed that involved as lost or stolen. about, FS respondents had greater concern around all of the management fraud in FS organisations in the last two years. “This changing the victim’s mobile number to redirect OTps to the The criminal then calls the victim to notify them that their categories of collateral damage listed when compared to other suggests that the ’tone at the top’ and overall senior management fraudster’s phone, in these new scams the criminals are stealing mobile phone service will be interrupted for the next 12 hours. industries. More than half said their greatest concern was around attitude to fighting fraud is worsening, and presents an increasing the actual mobile device SiM card. in the meantime, the criminal presents the police report at one reputational damage. challenge for non-executive board members,” said Clark. BT in the first attack, the Gozi Trojan is used to steal iMEi of the wireless service provider’s retail outlets. The SiM card (international mobile equipment identity) numbers from account reported as lost or stolen is deactivated by the mobile network holders when they log-in to their online banking application. operator, and the criminal gets a new SiM card that receives all Hungary gets ATM cash deposits Once they have acquired the iMEi number, the criminals contact incoming calls and OTps sent to the victim’s phone number. This the victim’s wireless service provider, report the mobile device allows the fraudster authorise the fraudulent transactions he/she niCredit Bank Hungary has the pilot, the bank ordered 25 additional to personalize their ATM experience and as lost or stolen, and request a new SiM card. With this new SiM executes. launched a service that enables terminals with ENA modules. The bank extend the bank’s brand. UniCredit Bank card, all OTps intended for the victim’s phone are sent to the Since accounts protected by OTp systems typically have Ucustomers to deposit cash plans to continue the deployment of is the first financial institution in Hungary fraudster-controlled device. higher transfer limits and are less scrutinised, they are more through an automated teller machine to additional modules, with the goal to to implement Diebold’s Agilis Campaign in the Gozi configuration file Trusteer obtained, the malware lucrative. This explains why criminals are willing to go to great their bank accounts and selected Diebold increase the number to 60 by the end of Office one-to-one marketing solution. uses a web page injection that prompts the victim to enter their lengths to gain access to them. as exclusive ATM provide. The new ATMs 2012. These cash deposit-enabled ATMs “When we started envelope-free iMEi number before they can access their online bank account. The one common thread in both schemes is that they are are the first in Hungary offering automated will help the bank improve efficiencies and deposit transactions in February 2011 The fraudulent injection explains how to retrieve the iMEi made possible by compromising the web browser with a deposit services. provide new services for its customers. it was clear during the pilot period number, which can be found on the phone’s battery or accessed MitB attack to steal the victim’s credentials. By combining A successful pilot of envelope-free The agreement also includes that customer demand is significant by dialing *#06# on the device keypad. stolen personally identifiable information with clever social transactions that authenticated and maintenance and professional services for this kind of service,” said Gyula The second attack combines online and physical fraud to engineering techniques, criminals using these attacks don’t validated deposit of banknotes in real- for approximately 180 Opteva ATMs Bunna, managing director of the retail achieve the same goal. Trusteer discovered this scheme in need to trick users into verifying fraudulent transactions. They time on approximately 10 Diebold Opteva deployed across the country. Additionally, marketing and segments, UniCredit. an underground forum. First, the fraudster uses a Man in the are able to bypass out of band authentication mechanisms ATMs was completed in early 2011. These UniCredit Bank is deploying personalised “Branches where these new types of Browser (MitB) or phishing attack to obtain the victim’s bank like SMS-delivered OTps by authorising these transactions ATMs were equipped with Diebold’s Agilis ATM marketing which will enable it to ATMs are installed reported an increased account details, including credentials, name, phone number, etc. themselves. BT multi-vendor software application and deliver targeted marketing campaigns percentage of terminal usage instead of Next, the criminal goes to the local police department to enhanced banknote acceptor. Following to its customers, empower customers cash-desk.” BT report the victim’s mobile phone as lost or stolen. The criminal ■ www.trusteer.com

24 I www.bankingtech.com www.bankingtech.com I 25 ReTaiL: News April 2012

Saxo targets UK retail investors Olympics to boost axo Bank, the online trading and investment specialist, has launched its new mobile banking Modern Wealth Management platform for retail investors in the UK. s Coinciding with the launch, Saxo commissioned a survey of more than he mobile banking and mobile 500 retail investors which found that over 78% of respondents already manage at payments battleground in the least some of their investments online. 71% would feel confident to make decisions TUK is heating up as industry themselves if they had all relevant information available. When asked about fees players manoeuvre to take advantage 25% of respondents said they have no clear understanding of the fees they pay or of the opportunities according to a are prepared to pay for managing their wealth. At the same time cost is the most report commissioned by digital banking important factor for investors, followed by good advice and transparency. provider intelligent Environments, which Karsten Henriksen, head of Modern Wealth Management for the UK market said: investigated the views of mobile strategists “This is an important market for us, and we can see from our survey that MWM within companies such as O2, Microsoft fits right into the requirements and expectations of today’s investors. The wealth and lloyds Banking Group. management space in the UK is well developed and investors are sophisticated, and participants said that with significant MWM meets their needs by providing simple, easy to use tools and offers transparent investment going into the mobile banking fees and guidance for those who are just beginning to take their wealth into their and mobile payments infrastructure for own hands.” the 2012 london Olympics, the games The platform was developed with a focus on usability and simplicity to provide are poised to provide a pivotal moment guidance to self-directed investors and make wealth management as straight- in the delivery and adoption of mobile forward and transparent as possible. The platform features integrated Morningstar financial services in the UK. tools and data for funds and ETFs. A new tool called ideator helps clients determine Banks such as Barclays, NatWest and their general risk profile and get started with model portfolios of either funds or ETFs lloyds have been making waves in this space, independently selected by Morningstar investment Consultants to match each of the but on the whole financial institutions have profiles. Clients can individually change weightings or entirely remove funds or ETFs been somewhat behind the pace. However, from the model portfolio before investing. investors can also manage their iSA and despite the roll out of recent mobile banking Sipp investments through the platform, and invest in the UK and overseas equity and mobile offerings such as Barclays pingit, markets, gilts and corporate bonds, a wide range of ETFs and over 2,400 managed only one respondent believes that to date funds. Costs for using MWM are fully transparent, upfront fees on fund purchases are the UK has been faring well in its delivery of zero and equity and ETF trades cost £9.95 for orders up to £75,000. BT mobile financial services.BT Mobile handsets are weak link in online banking ecurity specialist Trusteer has recently uncovered two impersonates the victim using their stolen personal information online banking fraud schemes designed to defeat one (e.g., name, address, phone number, etc.). This allows the stime password (OTp) authorisation systems used by many fraudster to acquire a police report that lists the mobile device banks. Unlike a previous attack Trusteer discussed that involved as lost or stolen. changing the victim’s mobile number to redirect OTps to the The criminal then calls the victim to notify them that their fraudster’s phone, in these new scams the criminals are stealing mobile phone service will be interrupted for the next 12 hours. the actual mobile device SiM card. in the meantime, the criminal presents the police report at one in the first attack, the Gozi Trojan is used to steal iMEi of the wireless service provider’s retail outlets. The SiM card (international mobile equipment identity) numbers from account reported as lost or stolen is deactivated by the mobile network holders when they log-in to their online banking application. operator, and the criminal gets a new SiM card that receives all Once they have acquired the iMEi number, the criminals contact incoming calls and OTps sent to the victim’s phone number. This the victim’s wireless service provider, report the mobile device allows the fraudster authorise the fraudulent transactions he/she as lost or stolen, and request a new SiM card. With this new SiM executes. card, all OTps intended for the victim’s phone are sent to the Since accounts protected by OTp systems typically have fraudster-controlled device. higher transfer limits and are less scrutinised, they are more in the Gozi configuration file Trusteer obtained, the malware lucrative. This explains why criminals are willing to go to great uses a web page injection that prompts the victim to enter their lengths to gain access to them. iMEi number before they can access their online bank account. The one common thread in both schemes is that they are The fraudulent injection explains how to retrieve the iMEi made possible by compromising the web browser with a number, which can be found on the phone’s battery or accessed MitB attack to steal the victim’s credentials. By combining by dialing *#06# on the device keypad. stolen personally identifiable information with clever social The second attack combines online and physical fraud to engineering techniques, criminals using these attacks don’t achieve the same goal. Trusteer discovered this scheme in need to trick users into verifying fraudulent transactions. They an underground forum. First, the fraudster uses a Man in the are able to bypass out of band authentication mechanisms Browser (MitB) or phishing attack to obtain the victim’s bank like SMS-delivered OTps by authorising these transactions account details, including credentials, name, phone number, etc. themselves. BT Next, the criminal goes to the local police department to report the victim’s mobile phone as lost or stolen. The criminal ■ www.trusteer.com

www.bankingtech.com I 25 ReTAil: News ANAlysis REtAil: NEwS ANAlYSiS ApRIl 2012 APrIL 2012

Personal touch should be key to banks’ future plans Grounds for complaint Research by BT Global Services and Avaya finds consumers want multichannel interactions with THE publication of complaints data has improved standards in the industry, but according to financial services companies to feel local and personal Ernst & Young, it is now being used for purposes for which it is not fit.

Banking customers around the service he once provided albeit Ernst & Young’s survey of nine major complaint but only one of these applies it “The financial services industry is under world are cautious of social across different and often retail financial services firms in the UK, strictly, with all of the others varying their pressure to restore public confidence media when dealing with multiple channels. Mobile and Under the microscope, shows that the application of the definition in practice. in the role that it plays in society and it personal finance matters and smartphone apps offer financial FSA‘s drive to publish complaints data Three firms regard ‘any expression of recognises that improving the quality of prefer personalised services services companies levels of has succeeded in raising the complaints handling and wider to be at the centre of their contact unparalleled in the profile of complaints handling customer experience is integral to relationship, according to a new history of the sector. It is a very and that financial services firms this process,” said Liver. study by BT and Avaya. personal medium and each have pushed complaints up the As the consumer protection The study found that, despite interaction is an opportunity to agenda. agenda moves forward under the the growing use of telephone, engage a customer but is also an However, the published data is FCA, and firms seek to engage mobile and internet banking in opportunity to fail, especially if now being used by the public and with the customer through new recent years, almost three quarters the consumer switches from one the media to compare and contrast channels, complaint handling will (73%) of customers in the UK – channel to another and receives firms when it is not consistent have to change rapidly. and a similar number in Germany, inconsistent information and enough for this purpose – not all Social media is influencing the Spain and the US – see their local service.” customer complaints are captured, way firms engage with customers, branch as the most vital link with The research exposed further firms’ definition of a reportable however the survey showed that their bank in the future – second only to “The days of the traditional cultural trends, which suggests that complaint differs significantly the majority of firms do not yet cash machines. the more technologically advanced we and some firms include invalid use social media as a channel and The results suggest that customers local bank manager become as consumers, the less tolerant PPI complaints, which distort that those who do look to engage want the same personalised service might be behind us but we’re going to be of poor customer the data they report. As a result with customers but not to manage that local branches deliver, regardless of service in personal finance. the published data is creating complaints via social media. whether the interaction with their financial customers are very clear Spanish consumers are using mobile a misleading benchmark of the A banking executive who was services provider is taking place in person, that they still want the level browsers, smartphone apps, email and industry the firm says. interviewed for the survey highlighted on the phone or using the internet. text messaging for banking more than The Financial Services Authority the challenges: “Inclusion of social The findings of the survey present a of personal service he most – but they have to wait the longest has published firm-specific media within the complaints model particular opportunity for the UK financial once provided.” to apply for a new account 49% of complaints handling data every brings its own challenges. What are services sector as it looks to strengthen consumers in Spain want to be notified by six months since 2010. This was aimed at dissatisfaction’ as a complaint and one the legal implications of creating dialogue its relationship with customers. The multichannel contact centre and deliver email, text or phone when a better deal increasing transparency on how individual uses a bespoke definition. There is also where the data sits outside the bank? How study found that just over a third (34%) of the service their customers demand.” is available (compared to 39% in the UK, firms handle complaints and to push a wide range of processes for producing do firms ensure the right dialogue is taking British consumers said they have a strong The research also found that banking 33% in Germany, and 28% in the US) complaints up the business agenda within the official numbers that are reported to place when the customer identity may be relationship with their bank. This compares customers around the world remain 40% of Spanish consumers say they firms’ management. the FSA and the way in which that data is unknown and asking for it brings security to 40% in Spain, over half (55%) in the US cautious of social media when dealing often or sometimes have to wait too long John Liver, EMEIA global regulatory validated before submission also varies.” risks?” and two thirds (64%) in Germany. with personal finance matters. The study to apply for a new account, (compared to reform leader at Ernst & Young said: “The She gives a hypothetical example: “If “The changing nature of consumers Tom Regent, president global banking reveals that only five% of consumers see 22% in the UK, 24% in the US and 22% FSA’s move to bring complaints handling we compare a firm that applies the full FSA who wish to express dissatisfaction & financial markets and sales & marketing, social media as an appropriate forum for in Germany) up the agenda appears to have worked. definition, and so only counts complaints with ease, coupled with how quickly BT Global Services, said: “Despite this financial conversations and some 60% Germans seem more focussed on getting Firms have grasped the importance that have caused customers ‘material this dissatisfaction can go viral when being a tough time for financial services said they wouldn’t use Twitter, Facebook the best possible deal than quality of service of this issue at the highest level, and distress or inconvenience’, to a firm that not addressed, raises an interesting organisations, these results show they or similar sites to resolve customer service 66% of German consumers agreed, ‘I like to all firms now have chief executive or applies ‘any expression of dissatisfaction’ challenge for firms who must decide how can strengthen trust and build stronger issues in banking. constantly review my financial products to senior management engagement with throughout the process, the firm using the to accommodate complaints raised within relationships with their customers by A telephone call to the contact centre check I am getting the best deal’ (compared complaints.” FSA definition would, in theory, record these channels and firms are going to delivering truly local and personalised remains the first stop for resolving a to Spain 58%, UK 52%, US 56%). Whilst Jenny Clayton, EMEIA consumer fewer complaints,” she said. have to start looking at their complaints services through every channel they complaint or issue. However, customers 56% of German consumers are more likely protection leader at Ernst & Young, “Equally, if we compare a firm that handling as a whole, not just through the have. Innovations in customer service are interested in new ways of dealing to switch banks due to bad customer service said: “The FSA rules and definitions does not remove invalid PPI complaints lens of the FSA definition,” said Clayton. technology can help them achieve this. with their finances and expect web-chat, than to get a slightly better deal (compared are important for supervisory purposes generated by claims management She added: “We know that there Whether it’s in the branch or through co-browsing and video-chat with their with 59% in the US, 59% in the UK and 45% and for creating grounds for referral companies to a firm that does, the is industry appetite for more accurate remote channels such as mobile banking, financial services provider to grow. Mobile in the Spain) to the FOS, but do not create a clear reportable numbers would look very benchmarking of complaints handling technologies now exist that can link up banking is also gaining popularity, with The US has the most competitive picture of complaints handling standards different. Additionally, if we compare – this study was undertaken at the customers to the right people and the almost a quarter (24%) having already tried market and US consumers seem the most for the customer or the industry. The the firms that theoretically use the ‘FSA request of a client and firms were keen to right information in a cost-effective way. it and more than one in three consumers satisfied with service and interactions combination of the way in which firms definition’ but apply it in different ways, participate. A more accurate anonymous “We know financial services (34%) keen to make mobile payments. Only 32% in the US say they often or define a complaint, apply that definition it is again not possible to compare benchmarking system would put the organisations want to give their customers In the branch, 41% want access to free sometimes have to wait too long in the and report numbers, limits the validity complaint numbers accurately.” FSA and FOS figures in context and the most rewarding and enjoyable wi-fi, suggesting a desire to interact with queue at a bank branch (compared with of using FSA data to undertake a ‘firm As an industry financial services are help to make sure that best practice is experience possible, but banks in multiple channels simultaneously. 59% in the UK, 56% in Spain and 40% in by firm’ comparison. Not all customer committed to improving, the research shared, which will ultimately be to the particular are facing some of the toughest Mario DiMascio vice president, sales Germany). Similarly, 27% in the US have complaints are included in the published found. The general consensus of those benefit of consumers. Without sharing challenges of any sector and they have to EMEA, Avaya, said: “The days of the to often or sometimes wait too long to data, as firms do not have to report surveyed was that a minimum threshold best practice, firms risk being pulled in prioritise investments that deliver to the traditional local bank manager might be have their complaint resolved (compared complaints that are satisfactorily dealt for a fair outcome should be set at 95% different directions and overall progress bottom line. BT can help them achieve behind us but customers are very clear to 49% in Spain, 34% in the UK and 31% with by the next working day. Five of the with many firms looking to exceed this in this area could be piecemeal for some this at the branch level as well as in the that they still want the level of personal in Germany). BT firms surveyed use the FSA definition of a figure. time to come.” BT

26 I www.bankingtech.com www.bankingtech.com I 27 REtAil: NEwS ANAlYSiS APrIL 2012

Grounds for complaint THE publication of complaints data has improved standards in the industry, but according to Ernst & Young, it is now being used for purposes for which it is not fit.

Ernst & Young’s survey of nine major complaint but only one of these applies it “The financial services industry is under retail financial services firms in the UK, strictly, with all of the others varying their pressure to restore public confidence Under the microscope, shows that the application of the definition in practice. in the role that it plays in society and it FSA‘s drive to publish complaints data Three firms regard ‘any expression of recognises that improving the quality of has succeeded in raising the complaints handling and wider profile of complaints handling customer experience is integral to and that financial services firms this process,” said Liver. have pushed complaints up the As the consumer protection agenda. agenda moves forward under the However, the published data is FCA, and firms seek to engage now being used by the public and with the customer through new the media to compare and contrast channels, complaint handling will firms when it is not consistent have to change rapidly. enough for this purpose – not all Social media is influencing the customer complaints are captured, way firms engage with customers, firms’ definition of a reportable however the survey showed that complaint differs significantly the majority of firms do not yet and some firms include invalid use social media as a channel and PPI complaints, which distort that those who do look to engage the data they report. As a result with customers but not to manage the published data is creating complaints via social media. a misleading benchmark of the A banking executive who was industry the firm says. interviewed for the survey highlighted The Financial Services Authority the challenges: “Inclusion of social has published firm-specific media within the complaints model complaints handling data every brings its own challenges. What are six months since 2010. This was aimed at dissatisfaction’ as a complaint and one the legal implications of creating dialogue increasing transparency on how individual uses a bespoke definition. There is also where the data sits outside the bank? How firms handle complaints and to push a wide range of processes for producing do firms ensure the right dialogue is taking complaints up the business agenda within the official numbers that are reported to place when the customer identity may be firms’ management. the FSA and the way in which that data is unknown and asking for it brings security John Liver, EMEIA global regulatory validated before submission also varies.” risks?” reform leader at Ernst & Young said: “The She gives a hypothetical example: “If “The changing nature of consumers FSA’s move to bring complaints handling we compare a firm that applies the full FSA who wish to express dissatisfaction up the agenda appears to have worked. definition, and so only counts complaints with ease, coupled with how quickly Firms have grasped the importance that have caused customers ‘material this dissatisfaction can go viral when of this issue at the highest level, and distress or inconvenience’, to a firm that not addressed, raises an interesting all firms now have chief executive or applies ‘any expression of dissatisfaction’ challenge for firms who must decide how senior management engagement with throughout the process, the firm using the to accommodate complaints raised within complaints.” FSA definition would, in theory, record these channels and firms are going to Jenny Clayton, EMEIA consumer fewer complaints,” she said. have to start looking at their complaints protection leader at Ernst & Young, “Equally, if we compare a firm that handling as a whole, not just through the said: “The FSA rules and definitions does not remove invalid PPI complaints lens of the FSA definition,” said Clayton. are important for supervisory purposes generated by claims management She added: “We know that there and for creating grounds for referral companies to a firm that does, the is industry appetite for more accurate to the FOS, but do not create a clear reportable numbers would look very benchmarking of complaints handling picture of complaints handling standards different. Additionally, if we compare – this study was undertaken at the for the customer or the industry. The the firms that theoretically use the ‘FSA request of a client and firms were keen to combination of the way in which firms definition’ but apply it in different ways, participate. A more accurate anonymous define a complaint, apply that definition it is again not possible to compare benchmarking system would put the and report numbers, limits the validity complaint numbers accurately.” FSA and FOS figures in context and of using FSA data to undertake a ‘firm As an industry financial services are help to make sure that best practice is by firm’ comparison. Not all customer committed to improving, the research shared, which will ultimately be to the complaints are included in the published found. The general consensus of those benefit of consumers. Without sharing data, as firms do not have to report surveyed was that a minimum threshold best practice, firms risk being pulled in complaints that are satisfactorily dealt for a fair outcome should be set at 95% different directions and overall progress with by the next working day. Five of the with many firms looking to exceed this in this area could be piecemeal for some firms surveyed use the FSA definition of a figure. time to come.” BT

www.bankingtech.com I 27 ReTaIl: mobIle APRIL 2012

password as long as the phone number is already registered, while a transfer of funds would require more Keep taking the tablets authentication. “We are entering a post-PC era. Already 40% of Apple’s iPad is leading the way for financial applications, UK residents use a mobile device as their primary but developers will have to be careful as other devices internet tool, and the numbers are growing. In banking, proliferate in the consumer space, writes Tom Groenfeldt. consumer apps are deploying on the iPhone and commercial apps on the iPad.” In just about 18 months iPads have moved from Geoff Knapp, vice president for online banking at curiosities or threats in the eyes of bankers (and Fiserv, said his company plans to support multiple more specifically their IT departments) to must- devices through its platform in a write-once, deploy have tools. on multiple device approach. Fiserv sees two common Standard Chartered Bank, which was one of the demands in business – the capability to offer mobile first banks to deploy the iPhone, has also become a authorisation of transactions such as payments by leader in deploying the iPad. The bank’s relationship a traveling executive, and tools to support a small managers find it improves their interactions with clients business owner, such as a contractor, who needs to by providing a large screen that can easily be shared. have his office functionality with him in his car or van. “iPad redefines the way our relationship managers He too sees the iPad as the dominant player. connect with their customers,” says Mary Huen, head “Our primary devices right now are iPads. We are of consumer banking at Standard Chartered Bank in a big partner of Microsoft, so we work with them on Hong Kong. “With iNeeds, they’re able to introduce prototypes, but the demand isn’t there.” He also sees products in a more engaging way, while deepening a lot of Android devices, but added that “in the tablet their understanding of that customer’s needs at that space right now the iPad is the 800-pound gorilla.” point in time. Together they can work on customised Verivo, formerly Pyxis, solutions on the spot. Everything becomes very has developed a platform simple, effective, and user-friendly.” The bank has its that allows users to deliver own App Centre with more than a dozen iPhone apps applications across multiple and a growing number of iPad apps. mobile platforms including To develop its internal apps, the bank relies on iPad, Android and BlackBerry. a small team of programmers, graphic designers, Originally a company aimed and interface experts – and the tools and guidelines exclusively at finance, since the included in the Apple iOS Software Development Kit. crisis in 2008 it has pursued “The SDK is very standardised, which means that our run through a browser rather than a native app like the any business that needs to put apps are more stable and consistent across many Apple version. “Our primary devices right now technology into the hands of different apps,” says Todd Schofield, global head of “There are pros and cons to native apps vs. are iPads. We are a big partner of users outside an office. enterprise mobility at the bank. browsers, but other banks and vendors I have talked Microsoft, so we work with them Tablets are taking off faster RBS Citizens Bank in the US has also found the to in the space think it will be very difficult to keep up than any new technology since Apple tools helpful in developing its accessMOBILE native apps on multiple operating systems.” Too many on prototypes, but the demand email, says TL Neff, executive app; it took just eight months from the initial concept corporations have Android or BlackBerry as the only isn’t there.” vice president at the company. to the day Apple made it available in its App Store. devices they support for RBS Citizens to stick with Investment bankers are placing “That is fast for any software project, but it is Apple alone. Geoff Knapp, Fiserv their entire pitch books on remarkable for a project in a new channel,” said At a meeting of a bank advisory committee, the iPads, he added, and financial Matt Richardson, senior vice president and head of development team asked the 15 members which of Sybase also has a small business range that hits advisors are loading customer product solutions for global them was using the Apple app: 12 of them said they a perfect sweet spot for mobile, he adds. A small information, from accounts to transaction services at the bank. weren’t allowed to use Apple technology at work. business person, whether an estate agent or a home birthdays. And the bank expects future Developing a moble commerical banking app repair specialist, can use a tablet to fill out invoices, Unlike a mobile phone where only a limited amount development to be faster. had full support from top executives at the bank, deposit money or order supplies. of information can be shown on each screen, tablets With its commercial banking says Richardson. In a mature business like cash Online banking programs written for a PC that have space for text, graphs and video. tool, accessMOBILE, RBS Citizens management, it is very difficult fora bank to differentiate were designed for a mouse and keyboard don’t work “IPads are just rampant throughout finance was second only to Wells Fargo in its services. well with a tablet, Mallon says: “You need a mobile services.” he added. “We see iPad, iPad, iPad ... only rolling out an app on the iPad. At One senior corporate treasury officer told the bank interface.” on consumer apps do other tablets come into the RBS Citizens, the app is for both he had been able to approve some transactions even Mobile development also has to move fast and it picture. The enterprise is saying it will support tablets, the iPhone, and then with a 2x as he was on a Friday road trip taking his daughter to should be iterative, he says. CIBC in Canada launched but only on the iPad because it has good technology expansion it can also run on the visit a college. an app with good design and thought behind it, but for security.” iPad as well. It has not written a “A situation came up at work where we had to get they wanted it out out fast and to then expand its David Albertazzi, senior analyst at Aite Group, said specifically for the tablet. these wire transfers done. Normally I would have had functionality based on customer feedback. By contrast, many vendors are in their second or third generation “We have die-hard early to be at my desk, but thanks to the app I was able to some of the software vendors seem to be on a relatively of mobile solutions, so now they are taking a strategic adopters, said Richardson. do it from the road,” he told Richardson. leisurely development cycle more appropriate for a view. “People who use it really like it.” Diarmuid Mallon, senior product marketing manager mainframe era than for the age of Apple and Android. The tablet, with its large touch screen and high The bank, which worked with at Sybase 365, says that is the way bankers want to Because Sybase connects to core banking systems, resolution provides a unique user experience, he says. Sybase 365 on the Apple version, work. The back office staff will sit at computers and it can deliver financial functionality over any channel Among the market leaders in iPad applications are is now planning versions for prepare transactions, but the senior executives want with appropriate rules for that specific channel, Mallon Citi, with CitiTablet, USAA and Bank of America, he Android and BlackBerry that will to be able to authorise them from wherever they are. says. An SMS balance enquiry may not require a added. BT

28 I www.bankingtech.com www.bankingtech.com I 29 password as long as the phone number is already registered, while a transfer of funds would require more authentication. “We are entering a post-PC era. Already 40% of UK residents use a mobile device as their primary internet tool, and the numbers are growing. In banking, consumer apps are deploying on the iPhone and commercial apps on the iPad.” Geoff Knapp, vice president for online banking at Fiserv, said his company plans to support multiple devices through its platform in a write-once, deploy on multiple device approach. Fiserv sees two common demands in business – the capability to offer mobile authorisation of transactions such as payments by a traveling executive, and tools to support a small business owner, such as a contractor, who needs to have his office functionality with him in his car or van. He too sees the iPad as the dominant player. “Our primary devices right now are iPads. We are a big partner of Microsoft, so we work with them on prototypes, but the demand isn’t there.” He also sees a lot of Android devices, but added that “in the tablet space right now the iPad is the 800-pound gorilla.” Verivo, formerly Pyxis, has developed a platform that allows users to deliver applications across multiple mobile platforms including iPad, Android and BlackBerry. Originally a company aimed exclusively at finance, since the crisis in 2008 it has pursued any business that needs to put “Our primary devices right now technology into the hands of are iPads. We are a big partner of users outside an office. Microsoft, so we work with them Tablets are taking off faster than any new technology since on prototypes, but the demand email, says TL Neff, executive isn’t there.” vice president at the company. Investment bankers are placing Geoff Knapp, Fiserv their entire pitch books on iPads, he added, and financial Sybase also has a small business range that hits advisors are loading customer a perfect sweet spot for mobile, he adds. A small information, from accounts to business person, whether an estate agent or a home birthdays. repair specialist, can use a tablet to fill out invoices, Unlike a mobile phone where only a limited amount deposit money or order supplies. of information can be shown on each screen, tablets Online banking programs written for a PC that have space for text, graphs and video. were designed for a mouse and keyboard don’t work “IPads are just rampant throughout finance well with a tablet, Mallon says: “You need a mobile services.” he added. “We see iPad, iPad, iPad ... only interface.” on consumer apps do other tablets come into the Mobile development also has to move fast and it picture. The enterprise is saying it will support tablets, should be iterative, he says. CIBC in Canada launched but only on the iPad because it has good technology an app with good design and thought behind it, but for security.” they wanted it out out fast and to then expand its David Albertazzi, senior analyst at Aite Group, said functionality based on customer feedback. By contrast, many vendors are in their second or third generation some of the software vendors seem to be on a relatively of mobile solutions, so now they are taking a strategic leisurely development cycle more appropriate for a view. mainframe era than for the age of Apple and Android. The tablet, with its large touch screen and high Because Sybase connects to core banking systems, resolution provides a unique user experience, he says. it can deliver financial functionality over any channel Among the market leaders in iPad applications are with appropriate rules for that specific channel, Mallon Citi, with CitiTablet, USAA and Bank of America, he says. An SMS balance enquiry may not require a added. BT

www.bankingtech.com I 29 Go to www.bankingtech.com for the latest news and comment RISK & REGULATION April 2012 The Financial Services Authority is to SunGard adds CVA capability to Adaptiv issue new guidance on anti-bribery and corruption systems and controls to all firms unGard has extended its Adaptiv The solution can run over one million following its thematic review into investment FS firms struggle to upgrade systems in face of software with a new module that valuations per second per processor banks. Sallows users to actively manage core, helping customers achieve greater From August 2011, the FSA visited compliance burden says JWG study for Interxion Credit Valuation Adjustment. Adaptiv CVA accuracy in their valuations by avoiding 15 firms, including eight major global Studio helps traders hedge their CVA approximation techniques. Adaptiv CVA investment banks and a number of smaller ome 71% of financial institutions requirements, as defined by Basel iii and exposure, minimise earnings volatility and Studio can accurately calculate multiple operations. do not believe that legacy system Solvency ii, and reforms such as MiFiD ii understand the direct impact of CVA on risk measures on a CVA book to help It found that, despite a long-standing Supgrades required to meet and the European Market infrastructure p&l, the company claims. manage volatility, including CVA, Debt requirement to mitigate financial crime compliance objectives will be complete regulation (EMir) that will significantly Basel iii’s CVA mandate will require Valuation Adjustment and Funding Valuation risk, the majority of firms had more work 2015, and an overwhelming 90% think affect firms’ systems, controls, reporting banks to hold more capital for counterparty Adjustment, sensitivities, stress scenarios, to do to implement effective anti-bribery that penalties for non-compliance by the and record keeping ability. These regulations credit risk. This is expected to reduce the p&l attribution and p&l predict. Accurate and corruption systems and controls. In end of this year will run into the tens of require major upgrades starting in 2012 and return on equity and therefore have a direct CVA calculations help banks improve their particular, it found that most firms had not millions of dollars. rippling across industry sectors for the rest impact on the profitability of the over- selection of counterparties by helping them properly taken account of rules covering With 40% of respondents saying of the decade. the-counter business lines within many more precisely assess counterparty risk. bribery and corruption, either before the they lacked confidence in the ability pJ Di Giammarino, chief executive financial services firms, from global banks Juerg Hunziker, president of SunGard’s implementation of the Bribery Act 2010 or of their overall iCT infrastructure to of JWG (right) said: “Many financial to regional franchise banks. Adaptiv CVA Front Arena and Adaptiv business units, after, and nearly half the firms did not have comply with upcoming regulations, 30% institutions are trying to run services on Studio helps traders dynamically hedge said” “As the impact of Basel iii on both an adequate ABC risk assessment, among said they would need third-party data disparate systems whose complexity and CVA volatility by offering the ability to profitability and earnings volatility is better other failings. centres to fulfil compliance and security inflexibility make it difficult to respond to calculate and view sensitivities, manage understood, banks are establishing CVA The FSA is considering whether further requirements, whilst also being able to regulatory demands. But non-compliance and hedge credit risk on their books, and functions to support compliance and regulatory action is required in relation to reduce operational risk capital buffers. could lead to significant fines or even cost calculate p&l and p&l predict. improve how they manage p&l. Adaptiv certain firms. Tracey McDermott, acting The figures come from an independent firms their licence to practice.” Building internal data centres is no longer an Adaptiv CVA Studio includes a Monte CVA Studio can help by providing a director of enforcement and financial crime, study and whitepaper by financial He added: “The accountability for option for many firms due to capital restraints Carlo calculation engine for measuring complete view of CVA and transparency said: “Overall, despite the high profile of the industry think-tank, JWG, carried out on compliance will most likely lie with iT and emanating from Basel iii and Solvency ii and risk and a trading-style interface to display into credit risk using technology that can issue, the investment banking sector has behalf of data centre operator interxion. operations, but there is no evidence that the prevalence of legacy systems. Therefore counterparty and hedge positions in a be quickly rolled out to traders and CVA been too slow and too reactive in managing The research is focused on the impact they are engaging with the regulators banks and insurers are increasingly re- single view of p&l and key risk metrics. managers across the organisation.” BT bribery and corruption risks. BT of anticipated regulation of the financial to set the right standards. There is a thinking their data centre strategies and services industry on the iCT infrastructure clear disconnect between infrastructure considering the externalisation of their requirements of banking and insurance practitioners and compliance experts facilities.” firms across Europe. which needs to be resolved fast if firms He added: “This research from JWG The research – based on interviews want to maintain their competitive highlights the role suppliers can play in with select industry practitioners, a pan- advantage as well as comply.” better supporting industry requirements European industry survey of iT decision Kevin Dean, chief marketing officer and in helping banks and insurance firms makers within banking and insurance firms at interxion, commented: “The impact navigate the vast terrain of legislation. and a review of more than 4,000 pages of the G20 regulatory reform on financial interxion is committed to understanding of regulation stipulated by the G20 in the institutions’ iCT infrastructure requirements the impact of regulation on our customers aftermath of the financial crisis. These will be significant and it is clear that firms in detail and to offering the appropriate include the implementation of new capital need to invest in the ‘correct’ technology. solutions.” BT

Swift outlines steps for SEPA migration step-by-step plan for achieving Single Euro payment Area already clearing, where – channel by channel, transaction type compliance within the tight timeframe set by the SEpA end by transaction type Adate regulation is set out by Swift in a new white paper. ■ Create a ‘SEpA checklist’ detailing what exactly you need to The SEpA Migration End Data regulation passed by the migrate to SEpA compliance European parliament sets 1 February 2014 as the deadline for ■ Determine the business value for you of achieving compliance: migration to SEpA credit transfers and direct debit transactions does it support your overall strategy for clearing? in euros. ■ Select the right messaging provider to support you Now there is a clear deadline for migrating domestic payments “The time has come to take concrete actions to achieve SEpA instruments on to SEpA standards, stepping up to the migration compliance,” says Marc pomes Bordedebat, senior market challenge must become a priority for both banks and corporates manager payments, EMEA at Swift. alike, the Swift paper argues, saying that 24 months to move to “Swift can help market participants analyse their payments full SCT and SDD usage is “a serious challenge for all institutions traffic across all of their banking communication channels to ... even those that are fully operational and have complete identify what they will need to migrate, and by when. Based on migration plans will have to refine and scale up their processes this, we can then assist with building a roadmap for migration, and applications to meet their obligations. give recommendations on priorities and help customers The paper proposes a series of preparatory steps to be taken reconsider their clearing strategy,” he said. BT in building a migration plan. These include: ■ Start by building a clear picture of the instruments you are ■ The white paper is available for download at www.swift.com

30 I www.bankingtech.com The Financial Services Authority is to SunGard adds CVA capability to Adaptiv issue new guidance on anti-bribery and corruption systems and controls to all firms unGard has extended its Adaptiv The solution can run over one million following its thematic review into investment software with a new module that valuations per second per processor banks. Sallows users to actively manage core, helping customers achieve greater From August 2011, the FSA visited Credit Valuation Adjustment. Adaptiv CVA accuracy in their valuations by avoiding 15 firms, including eight major global Studio helps traders hedge their CVA approximation techniques. Adaptiv CVA investment banks and a number of smaller exposure, minimise earnings volatility and Studio can accurately calculate multiple operations. understand the direct impact of CVA on risk measures on a CVA book to help It found that, despite a long-standing p&l, the company claims. manage volatility, including CVA, Debt requirement to mitigate financial crime Basel iii’s CVA mandate will require Valuation Adjustment and Funding Valuation risk, the majority of firms had more work banks to hold more capital for counterparty Adjustment, sensitivities, stress scenarios, to do to implement effective anti-bribery credit risk. This is expected to reduce the p&l attribution and p&l predict. Accurate and corruption systems and controls. In return on equity and therefore have a direct CVA calculations help banks improve their particular, it found that most firms had not impact on the profitability of the over- selection of counterparties by helping them properly taken account of rules covering the-counter business lines within many more precisely assess counterparty risk. bribery and corruption, either before the financial services firms, from global banks Juerg Hunziker, president of SunGard’s implementation of the Bribery Act 2010 or to regional franchise banks. Adaptiv CVA Front Arena and Adaptiv business units, after, and nearly half the firms did not have Studio helps traders dynamically hedge said” “As the impact of Basel iii on both an adequate ABC risk assessment, among CVA volatility by offering the ability to profitability and earnings volatility is better other failings. calculate and view sensitivities, manage understood, banks are establishing CVA The FSA is considering whether further and hedge credit risk on their books, and functions to support compliance and regulatory action is required in relation to calculate p&l and p&l predict. improve how they manage p&l. Adaptiv certain firms. Tracey McDermott, acting Adaptiv CVA Studio includes a Monte CVA Studio can help by providing a director of enforcement and financial crime, Carlo calculation engine for measuring complete view of CVA and transparency said: “Overall, despite the high profile of the risk and a trading-style interface to display into credit risk using technology that can issue, the investment banking sector has counterparty and hedge positions in a be quickly rolled out to traders and CVA been too slow and too reactive in managing single view of p&l and key risk metrics. managers across the organisation.” BT bribery and corruption risks. BT Risk & RegulaTion: news analysis RISK & REGULATION: MOBILE RECORDING APRIL 2012 April 2012 No rest for the wicked – or the righteous rd The price of compliance is eternal vigilance, writes Sherree DeCovny. o Financial institutions play a central role the panels. FATF is an intergovernmental or transactions in a particular time frame. c in combating money laundering and policy making body that assists countries In securities, the financial institution has to e other crimes. This is getting tougher, in developing regimes to fight money factor in volumes, the type of product and r however, as criminals become more laundering and terrorist financing. market volatility. sophisticated and regulations become Bank of America’s Michelle Neufeld, The third element is to establish ongoing e more strict. Panelists discussed these and managing director and AML risk monitoring and additional customer due other challenges at Sifma’s recent Anti- management executive for global AML diligence as appropriate. h Money Laundering and Financial Crimes and economic sanctions, explained that “There is a risk-based component to this, t Conference in New York. the FATF 40 recommendations are now and it could be trigger based,” said Santos. David Cohen, Under Secretary for organized by subject matter. Nine special “It could be the volume of alerts that a Nearly six months after its introduction, the Terrorism and Financial Intelligence at the recommendations have been embedded, client has generated. It could be a change requirement to record mobile phone traffic in n US Department of the Treasury gave the and more content has been included in the of control. It could be unusual suspicious the trading environment is still the cause of opening keynote address. In it, he gave interpretive notes. The recommendations set activity, for example red flags.” controversy, finds Graham Jarvis. O kudos to financial institutions for supporting out an approach to customer due diligence The fourth element addresses beneficial the government’s anti-terrorism campaigns and beneficial ownership. They also address ownership along the same lines as the FATF Since November 2011 companies working in the operational issues. and sanctions programs against Libya, Syria cross-border wires, legal entities, as well recommendations. equity, bond, financial and commodity derivatives Mobile comms still and Iran. He also highlighted the importance as issues related to foreign and domestic The proposed rule pertains only to markets have had to comply with the Financial present a challenge. of customer due diligence, monitoring Politically Exposed Persons. new customers, but FinCen requested Services Authority’s rules that require them to record “The technical for suspicious activity and establishing One of the major developments is the comments on how to implement them for all ‘relevant communications’ and store them for challenge with beneficial ownership. acceptance of a risk-based approach existing customer accounts. Moreover, it six months to prevent any professional misconduct mobile calls is When the US government began to whereby financial institutions use their initially applies to banks, broker-dealers, or illegal activities like insider trading from taking how to intercept, prepare to impose sanctions against Libya available resources to address their mutual funds, futures commission place. The definition of what is relevant includes all record, store and in mid-February 2011, the US Department assessed risks. merchants and introducing brokers in telephone calls and electronic communications that then retrieve the call of the Treasury thought a broad-based “There’s a stark reality that we have to commodities, but it may be expanded to involve “the receipt of client orders and negotiating, securely without any program might capture about $100 million deal with when the examiners come in others in the future. agreeing and arranging transactions”, says the FSA interruption being in Libyan assets. That amount was grossly or when audit comes in and looks at your Arlene Semaya, senior vice president in its Consultation paper 10/7 Taping: Removing the caused to the call underestimated. After embassy personnel program,” said Neufeld. “We’re not about and compliance managing director at mobile phone exemption of March 2010. itself,” says Stuart and other US citizens were evacuated on risk elimination: we’re about risk mitigation JPMorgan Chase, talked about a national Yet when the regulations (pS08/1) were first rye, associate director February 25, compliance teams at financial and management ... things are going to get exam risk alert issued by the Office of published in March 2008, and which came into force of financial services at firms moved swiftly to freeze more than $30 through systems.” Compliance Inspections and Examinations. a year later, there was no requirement to record Fujitsu UK and ireland. billion in assets under US jurisdiction. This Financial institutions are expected to Under the master/sub account model, a mobile phone calls. it was felt that the technology for He says that with landline total swelled over the next several months implement a three-prong approach to brokerage account can be subdivided and recording them was insufficiently developed, and the calls it is possible to record to more than $37 billion dollars. identify and verify the beneficial owners of used by individuals or groups of traders. regulator decided to review the feasibility of removing every call that passes through Securities firms here and abroad played accounts. The first prong is determine the The regulators are concerned about several this exemption at the end of 2009. it also sought to a switchboard, and as it’s part of a central role. Many frozen Libyan assets percentage of ownership: 25% seems to be risks including money laundering, insider encourage technology suppliers, trade associations the firm’s infrastructure it is under were held in securities ranging from blue the magic number. If that is not possible, the trading, market manipulation, account and economic consultants to provide their feedback its control. Yet with mobile calls chip stocks and corporate bonds to more second prong is identify the person or entity intrusions, information security breaches, on the removal of the mobile phone and device and SMS messages control is largely sophisticated investments and private funds. that has control over the account such as an unregistered broker-dealer activity and exemption. transferred to a mobile virtual network “Administering the sanctions program authorised signatory. If the controller cannot excessive leverage. To this end, master/sub As a result of this process the FSA felt that the operator as the communication tends to go involving such sophisticated global be identified, the third prong is to look for the accounts will be scrutinised to ensure these technology was now available to record any relevant more directly to and from the mobile device. investments presented multiple novel and person or entity that manages the account. risks have been addressed. communications being made or received by these So the network carrier has historically tended to difficult challenges both for OFAC and for Renata Santos, executive director, head The Office of Compliance Inspections devices. it only applies to mobiles that are specifically have control over it and not the business customer the industry,” said Cohen. “For instance, of AML, Institutional Securities Americas, and Examinations suggested a few ways to issued by firms for business use. roger Aitken, who found it hard to intercept the relevant mobile many of Libya’s securities were held in at Morgan Stanley, discussed FinCen’s limit the risks. One measure is to have written associate analyst at BiSS research, says that 22,000 communications. complex structures that masked beneficial Advance Notice Of Proposed Rulemaking descriptions of the controls and procedures mobile devices in the UK were expected to be affected rye suggests that this has left the banks and ownership information, making it difficult on customer due diligence, which was for sub account due diligence monitoring. prior to the removal of this exemption in the FSA’s financial institutions with two choices: the first involves to determine whether the government of released on February 29. This document Others include obtaining and maintaining new policy Statement pS10/17. Yet this figure could in banning the use of mobile phones for business calls, Libya or members of the Gaddafi family proposes that four elements should be part the names of traders authorised to use fact be much higher if one looks beyond the frontline which sounds impractical for an organisation that maintained an interest. Confirming this of the customer due diligence program. the master account; verifying the identities traders and considers the back-office functions that might have a mobile workforce. The second option is fact was further complicated because The first element is verification of the through background checks, interviews and support them. to implement a technological solution. There are two some of the investments spanned multiple customer’s identity. This can be a challenge fingerprints; physically securing customer The FSA has also sought to discourage the use ways to do this: on-net by using a solution that runs jurisdictions, including some that do not since most information financial institutions client systems and technology; and of private mobile devices which might enable an over a network and stores the data in-house or at a regularly collect, or they protect, certain have is provided by the customer, not an monitoring trading patterns. employee to circumvent the regulations. it was keen data centre, or by using a mobile device that has a client information. Nonetheless, the global independent source. “I think it’s for firms to figure out whether to ensure that the technology is user friendly, tamper- compliant SiM card and which uses an application to efforts to freeze Gaddafi’s and Libya’s assets The second element is to understand it’s appropriate depending on the risks of proof and therefore secure. it’s early days and there is record the communications. was hugely successful.” the purpose, intended nature and expected their relationships,” said Semaya. much to learn about how to prevent any infringements, John ryan, compliance officer for technology The changes to the Financial Action activity associated with the account. Compliance professionals clearly have and compliance requires much careful thought about projects at BNp paribas, adds that the banks also need Task Force recommendations announced In banking, anticipated activity may be their work cut out for them to ensure crime due diligence on many fronts – including how to to consider taking reasonable steps to create policies in February was a hot topic discussed by determined by the number of wires, cheques does not pay. BT overcome or prevent any technological, workforce and that enforce pS10/17. This includes staff training and >

32 I www.bankingtech.com www.bankingtech.com I 33 RISK & REGULATION: MOBILE RECORDING April 2012 rd co e r e h t

Nearly six months after its introduction, the requirement to record mobile phone traffic in n the trading environment is still the cause of controversy, finds Graham Jarvis. O Since November 2011 companies working in the operational issues. equity, bond, financial and commodity derivatives Mobile comms still markets have had to comply with the Financial present a challenge. Services Authority’s rules that require them to record “The technical all ‘relevant communications’ and store them for challenge with six months to prevent any professional misconduct mobile calls is or illegal activities like insider trading from taking how to intercept, place. The definition of what is relevant includes all record, store and telephone calls and electronic communications that then retrieve the call involve “the receipt of client orders and negotiating, securely without any agreeing and arranging transactions”, says the FSA interruption being in its Consultation paper 10/7 Taping: Removing the caused to the call mobile phone exemption of March 2010. itself,” says Stuart Yet when the regulations (pS08/1) were first rye, associate director published in March 2008, and which came into force of financial services at a year later, there was no requirement to record Fujitsu UK and ireland. mobile phone calls. it was felt that the technology for He says that with landline recording them was insufficiently developed, and the calls it is possible to record regulator decided to review the feasibility of removing every call that passes through this exemption at the end of 2009. it also sought to a switchboard, and as it’s part of encourage technology suppliers, trade associations the firm’s infrastructure it is under and economic consultants to provide their feedback its control. Yet with mobile calls on the removal of the mobile phone and device and SMS messages control is largely exemption. transferred to a mobile virtual network As a result of this process the FSA felt that the operator as the communication tends to go technology was now available to record any relevant more directly to and from the mobile device. communications being made or received by these So the network carrier has historically tended to devices. it only applies to mobiles that are specifically have control over it and not the business customer issued by firms for business use. roger Aitken, who found it hard to intercept the relevant mobile associate analyst at BiSS research, says that 22,000 communications. mobile devices in the UK were expected to be affected rye suggests that this has left the banks and prior to the removal of this exemption in the FSA’s financial institutions with two choices: the first involves new policy Statement pS10/17. Yet this figure could in banning the use of mobile phones for business calls, fact be much higher if one looks beyond the frontline which sounds impractical for an organisation that traders and considers the back-office functions that might have a mobile workforce. The second option is support them. to implement a technological solution. There are two The FSA has also sought to discourage the use ways to do this: on-net by using a solution that runs of private mobile devices which might enable an over a network and stores the data in-house or at a employee to circumvent the regulations. it was keen data centre, or by using a mobile device that has a to ensure that the technology is user friendly, tamper- compliant SiM card and which uses an application to proof and therefore secure. it’s early days and there is record the communications. much to learn about how to prevent any infringements, John ryan, compliance officer for technology and compliance requires much careful thought about projects at BNp paribas, adds that the banks also need due diligence on many fronts – including how to to consider taking reasonable steps to create policies overcome or prevent any technological, workforce and that enforce pS10/17. This includes staff training and >

www.bankingtech.com I 33 RISK & REGULATION: MOBILE RECORDING Go to www.bankingtech.com for the latest news and comment April 2012

the implementation of order lifecycle testing. This is who underlines the importance of having a high level IT & OPS Iomega offers because it is crucial to have the ability to demonstrate of authentication and tightly controlled user policies. April 2012 to the regulator that a company is compliant with the ryan suggests that much also depends on whether personal cloud for new regulations. “it is my understanding that you had a bank or financial institution decides to opt for a private to be compliant from day one, but i understand that the cloud solution with a provider that offers six months of branches technology market is still immature,” he says. storage capacity to meet the compliance requirements IBM certifies BPC for DB2 The problem is that of the regulations. The pC Banking Technologies, a provider of Open System e-payment systems, has torage specialist iomega is the solutions providers advantage of a hosted had the on-line applications within its SmartVista product certified by iBM as positioning its StorCenter range that offer the technology solution is that it is quicker B“ready for DB2” after two months of testing. Sof network storage devices as the required to enforce “All of the major firms to deploy in his view. The SmartSwitch provides a real-time transaction engine to manage the end-to-end basis of what it calls the personal Cloud, compliance with pS10/17 that we know about have other benefits include requirements of payments switching by delivering three core areas of functionality which it says will appeal to bank branches – the regulations that came the fact that the ongoing including interface support, authorisation routing, and stand-in authorisation. and regional centres. into force in November one solution or another – but costs are fixed and he As the ATM channel has grown increasingly important to banks, BpC created The push is the latest phase of a last year – are very small. very few would regard this as likes the fact that support SmartATM, a sophisticated system that allows banks to automate, service and monitor restructuring of products and marketing This presents a risk that is only one call away. it’s their ATM network management. following the acquisition of iomega by they might not have the final solution.” also important to work The SmartGuard solution combines the advantages of online and offline fraud storage giant EMC in 2008. iomega sufficient quality controls, Stuart Rye, Fujitsu with a cloud provider that prevention and detection, and enables both card issuers and acquirers to track 100% products are now fully integrated into finances, support or meets all of the necessary of transactions coming from traditional and emerging delivery channels such as ATMs, the EMC range, allowing the companies ongoing research and security standards to pOS, e-commerce, and m-commerce. to provide options spanning from the development in place. “i enable compliance with “This certification demonstrates again BpC’s commitment to working within industry smallest to the largest operations. expect the same level of the FSA’s regulations. standards to ensure our clients always benefit from the best technology available. We The StorCenter and personal Cloud service that you would want from any platform that’s in comparison he says the in-house option requires are a long term partner with iBM and “ready for DB2” is an important step in further approach provide local back-up and going to be used by a sales or trading function, and so some consideration about an array of costs like licences, building our worldwide cooperation,” added Vasily Gri goriev, chief executive of BpC data replication, remote access and the solution has to be tier one and fit for purpose,” he storage capacity, infrastructure and interoperability Banking Technologies. BT desktop virtualisation capabilities to explains. This includes making sure that any outbound with any existing voice recording platform. Yet the smaller operation of up to around 250 and incoming calls suffer minimal delays to maintain a decision about which route to take must be dependent employees, as well as being capable of good user experience. on the business model of the organisation. He stresses SAS claims low-cost entry to high-end BI being integrated with other systems such Most organisations that have made the effort to be the importance of having the correct policies, training, as ip video surveillance systems. compliant with the new regulations have opted to go compliance awareness programmes and ongoing new in-memory business intelligence solution from SAS uses a highly visual Because of the EMC ownership, the down the mobile application route. Neil Hammerton, control measures in place. interface to bring analytics to a broader class of users. SAS Visual Analytics, the iomega NAS systems are also compatible CEO of Natterbox, says this is because 70% of the This is achieved by having the operational end of Anewest product in the SAS High-performance Analytics family. with EMC data management software banks have applications stored on their mobile phones. the business working collaboratively with the telecoms SAS Visual Analytics combines analytics, in-memory architecture, data exploration, such as the Atmos cloud service, allowing Yet because it is possible to lose a device, swap the iT to ensure that stringent security standards are Hadoop support and information-delivery options, including the ipad. it is the only in- local offices to move data automatically SiM card for a non-compliant one or put it into a non- established. There should also be some front-office memory engine designed specifically for business visualisation of big data on inexpensive, to private or public clouds offered by compliant device, or for a plethora of other reasons field testing. He thinks it’s also crucial to use a solution non-proprietary hardware, the company claims. Atmos service providers. Similarly, the that can prevent the communications being recorded, that provides easily accessible audit trails and reporting “The speed of in-memory architecture offers tremendous benefit. Organisations can EMC Avamar software can be used for they are now opting for the on-net alternative. functions. He also recommends a targeted approach to explore huge data volumes and get answers to critical questions in near-real time,” de-duplication of data shared between The applications can create a call delay, making compliance, which requires the business to determine said Dan Vesset, programme vice president of iDC’s business analytics research. “SAS remote offices and for business continuity it harder for someone to get through to a trader, whose customers’ interactions must be recorded. Visual Analytics offers a double bonus: the speed of in-memory analytics plus self- purposes. and costs are increased because 3G data and a The best way to prevent anyone circumventing service eliminates the traditional wait for iT-generated reports. Businesses today must For desktop virtualisation the storage conferencing facility is used. Banks are therefore the regulations is by deploying an on-net solution. base decisions on insight gleaned from data, and that process needs to be close to devices can support up to 50 virtual taking away much of the functionality that the device Natterbox, for example, can also stop this happening instantaneous.” desktops backed up by rAiD storage to users require – preventing them, for example, from when someone diverts a call from a mobile device A core component of SAS Visual Analytics, the SAS lASr Analytic Server, uses provide local redundancy, as well as to being able to access any conferencing facilities. “There to another telephone. it will record the diverted call. Hadoop as local storage at the server for fault tolerance. SAS lASr Analytic Server has the cloud for off-site storage. BT is also a reliance on the network operator, which can “With Natterbox’s solution those diverted calls would been tested on billions of rows of data and is scalable, bypassing the known column become problematic when employees are roaming, to still be captured and it is impossible to circumvent limitations of many relational database management systems (rDBMS). ■ www.iomega-personal-cloud.com have these capabilities made available to them,” says the recording; so this makes it tamper proof in The package includes: Hammerton. On the other hand he claims that there a way that adheres to the FSA’s requirements,” ■ SAS lASr Analytic Server - clients communicate with SAS lASr Analytic Server for are no downsides to an on-net solution in comparison he explains. calculations on the data resident in-memory, producing remarkably fast results Messaging specialist Sterci has opened because the user experience is not diminished and it rye concludes: “Everyone should be compliant by ■ The Hub – a central location to launch the various elements of SAS Visual Analytics an office in New York as part of its doesn’t add on any additional costs. He adds that it’s now; all of the major firms that we know about have ■ Mobile – a tool for viewing reports, connecting to servers and downloading information strategy to strengthen its position in also a completely transparent solution. one solution or another – but very few would regard on the go North America after the opening of Sterci To prevent any hacking, ryan recommends that it’s this as the final solution because they are looking for ■ Explorer – an ad hoc data discovery and visualisation tool to explore and analyse data Canada in 2010. The company already important to collaborate with “a reputable company new ones that are easier to use, simpler to manage ■ Designer – used to create standard and custom reports and dashboards has US clients among the 300 it has in 20 that will allow your iT security team to do penetration and which meet their demanding needs for a good ■ Environment Administration – used by administrators to manage users, security countries.Based on modular components, tests, due diligence and pass ongoing audits”. Data is customer and user experience.” Given this, one and data Sterci’s GTSuite products deliver multi- secured by using an encryption key, which is specific would expect them to be shouting out that they are Server components run on red Hat or SUSE linux, and the mobile client is available for network messaging with GTExchange, to a user’s business unit at the point of capture. “To compliant. The trouble is that, when the deadline was the ipad from the iTunes App Store. Other mobile devices will be supported in the future. reconciliation with GTMatch, and format prevent hacking and any unintended sharing of fast approaching last year, BiSS did some research While the high end is not limited, SAS lASr Analytic Server reference configurations transformation with GTFrame, replacing stored files with unauthorised parties, the basic and that left Aitken, for one, feeling that some organisations begin with an eight-blade server with 96 processor cores, 768 gigabytes memory and Swift interfaces, combined with tools that robust rules of security must be applied throughout were resisting its encroachment, and they didn’t 4.8 terabytes of disk storage. The upper end of the reference configurations is 96 blades ensure interoperability between legacy, the process; from the moment calls are intercepted feel happy about discussing the issue. The same with 1,152 cores, 9.2 TB memory and 57.6 TB of disk storage, enough disk space to national, proprietary, Swift MT, DTCC, through to archiving, retrieval and disposal,” adds rye feeling remains. BT store the entire library of Congress six times.BT SEPA, MX and XML messaging standards.

34 I www.bankingtech.com www.bankingtech.com I 35 Go to www.bankingtech.com for the latest news and comment IT & OPS April 2012 Iomega offers personal cloud for IBM certifies BPC for DB2 branches pC Banking Technologies, a provider of Open System e-payment systems, has torage specialist iomega is had the on-line applications within its SmartVista product certified by iBM as positioning its StorCenter range B“ready for DB2” after two months of testing. Sof network storage devices as the SmartSwitch provides a real-time transaction engine to manage the end-to-end basis of what it calls the personal Cloud, requirements of payments switching by delivering three core areas of functionality which it says will appeal to bank branches including interface support, authorisation routing, and stand-in authorisation. and regional centres. As the ATM channel has grown increasingly important to banks, BpC created The push is the latest phase of a SmartATM, a sophisticated system that allows banks to automate, service and monitor restructuring of products and marketing their ATM network management. following the acquisition of iomega by The SmartGuard solution combines the advantages of online and offline fraud storage giant EMC in 2008. iomega prevention and detection, and enables both card issuers and acquirers to track 100% products are now fully integrated into of transactions coming from traditional and emerging delivery channels such as ATMs, the EMC range, allowing the companies pOS, e-commerce, and m-commerce. to provide options spanning from the “This certification demonstrates again BpC’s commitment to working within industry smallest to the largest operations. standards to ensure our clients always benefit from the best technology available. We The StorCenter and personal Cloud are a long term partner with iBM and “ready for DB2” is an important step in further approach provide local back-up and building our worldwide cooperation,” added Vasily Gri goriev, chief executive of BpC data replication, remote access and Banking Technologies. BT desktop virtualisation capabilities to smaller operation of up to around 250 employees, as well as being capable of SAS claims low-cost entry to high-end BI being integrated with other systems such as ip video surveillance systems. new in-memory business intelligence solution from SAS uses a highly visual Because of the EMC ownership, the interface to bring analytics to a broader class of users. SAS Visual Analytics, the iomega NAS systems are also compatible Anewest product in the SAS High-performance Analytics family. with EMC data management software SAS Visual Analytics combines analytics, in-memory architecture, data exploration, such as the Atmos cloud service, allowing Hadoop support and information-delivery options, including the ipad. it is the only in- local offices to move data automatically memory engine designed specifically for business visualisation of big data on inexpensive, to private or public clouds offered by non-proprietary hardware, the company claims. Atmos service providers. Similarly, the “The speed of in-memory architecture offers tremendous benefit. Organisations can EMC Avamar software can be used for explore huge data volumes and get answers to critical questions in near-real time,” de-duplication of data shared between said Dan Vesset, programme vice president of iDC’s business analytics research. “SAS remote offices and for business continuity Visual Analytics offers a double bonus: the speed of in-memory analytics plus self- purposes. service eliminates the traditional wait for iT-generated reports. Businesses today must For desktop virtualisation the storage base decisions on insight gleaned from data, and that process needs to be close to devices can support up to 50 virtual instantaneous.” desktops backed up by rAiD storage to A core component of SAS Visual Analytics, the SAS lASr Analytic Server, uses provide local redundancy, as well as to Hadoop as local storage at the server for fault tolerance. SAS lASr Analytic Server has the cloud for off-site storage. BT been tested on billions of rows of data and is scalable, bypassing the known column limitations of many relational database management systems (rDBMS). ■ www.iomega-personal-cloud.com The package includes: ■ SAS lASr Analytic Server - clients communicate with SAS lASr Analytic Server for calculations on the data resident in-memory, producing remarkably fast results Messaging specialist Sterci has opened ■ The Hub – a central location to launch the various elements of SAS Visual Analytics an office in New York as part of its ■ Mobile – a tool for viewing reports, connecting to servers and downloading information strategy to strengthen its position in on the go North America after the opening of Sterci ■ Explorer – an ad hoc data discovery and visualisation tool to explore and analyse data Canada in 2010. The company already ■ Designer – used to create standard and custom reports and dashboards has US clients among the 300 it has in 20 ■ Environment Administration – used by administrators to manage users, security countries.Based on modular components, and data Sterci’s GTSuite products deliver multi- Server components run on red Hat or SUSE linux, and the mobile client is available for network messaging with GTExchange, the ipad from the iTunes App Store. Other mobile devices will be supported in the future. reconciliation with GTMatch, and format While the high end is not limited, SAS lASr Analytic Server reference configurations transformation with GTFrame, replacing begin with an eight-blade server with 96 processor cores, 768 gigabytes memory and Swift interfaces, combined with tools that 4.8 terabytes of disk storage. The upper end of the reference configurations is 96 blades ensure interoperability between legacy, with 1,152 cores, 9.2 TB memory and 57.6 TB of disk storage, enough disk space to national, proprietary, Swift MT, DTCC, store the entire library of Congress six times.BT SEPA, MX and XML messaging standards.

www.bankingtech.com I 35 STANDARDS FOCUS APRIL 2012

Swift gears up for NY launch of MyStandards in May The online standards management and customer service tool from Swift is ready to go live. A collaborative web platform to better manage David Bannister reports on why it has been attracting so much attention. your standards defi nitions and usage MyStandards, the new web-based management and communications • Reduce time, effort and risk to manage and tool developed jointly between implement your standards Swift and a group of pilot users will officially be launched in New York at • Increase effi ciency and accuracy the beginning of next month. The service is intended to provide a • Centralise all of your standards-related information comprehensive mechanism for financial • Compare and analyse new & old versions of institutions to communicate service standards defi nitions and guidelines fast information with their customers, as • Share, comment and defi ne well as improve internal management of usage guidelines together standards and market practices. Bank of New York Mellon, Citi, • Generate and share Clearstream, JP Morgan, RBC Dexia, documentation SIX, T2S and the UK Payments • Generate schemas for implementation Council, have been collaborating on and use them for additional add-ons MyStandards in a closed pilot, and are such as GUIs and on-line help now expected to be joined by others as the launch date approaches. Discover MyStandards today: Initial reports from the closed trial www.swift.com/MyStandards emerged in a session at the Sibos event My Standards has exceeded its original brief and become more than a simple tool in Toronto last year, where it became clear that it will go beyond its original addresses the problems of change Practice Group, said capturing of market brief of being a simple management tool, management. practice is also greatly facilitated by the thanks in large part to the interactive Typically, within Citi, for example, MyStandards tool. By collaborating on this, rapid development methodology that this is done manually using Excel institutions will be able to concentrate on was used to develop it. spreadsheets to capture the information, more competitive issues. “We should not Speaking at a session in the and the spreadsheets have to be be competing on standards – we should Standards Forum part of Sibos, Bernard transformed into actionable change compete on services and MyStandards can Lenelle, senior vice-president, product requirement projects as new products communicate what those services are to management for core products and and services are added. “This can be customers.” business strategy at Clearstream, said a very heavy process,” said Crabtree. The launch of MyStandards has the process had meant that “we have For Citi, the main direction is to “make been a classic soft launch – as well as been very close and had a constant that effort easier to manage, and to the trails at Sibos last year, the Swift interaction with the developers”. improve sales and implementation with Standards people have been actively Veronique Peters, project manager new customers as well as for internal promoting it and seeking participation at Bank of New York Mellon, agreed: “It dissemination of all information”. ahead of the “official” launch. has been really comfortable – Swift has Lenelle said MyStandards acts as a Before the May launch event in New been asking for feedback all through, “single repository of all data, which is York, there will be an opportunity to and we’ve been getting the results of something we have been looking for for discuss the service at the Swift London that come back to us.” a long time”. The ease of contribution Business Day at the end of April, a The success of the development means that there is a risk that the repeat of last year’s sucessful event. methodology has already seen it database could become cluttered by In the meantime, interested parties adopted in a number of other projects, some users adding or amending data, can sign up to look at the service observed Brian Crabtree, director of so it will still require a disciplined for themselves at www.swift.com/ market practices standards and Swift at management approach. MyStandards where free trials are Citi, who described it as a “very effective, Asked if this meant that there was available till the end of April. collaborative, iterative approach”. a danger that the standards approach Essentially, MyStandards is a wiki, a could itself be debased by users adding ■ Banking Technology and Swift have web-based method of collaborating on endless work-arounds and “quick- teamed up to host a roundtable event the creation and sharing of information, fixes” of their own, BNY Mellon’s with some of the initial pilot participants the most famous example of which is Peeters said: “Within the boundaries of and other interested parties. This will Wikipedia. Financial institutions can use the standard, there is freedom in terms appear online to coincide with the New MyStandards to capture information of the information you are propagating York launch event, as well as in a later about their use of standards and – that is part of your business process issue of Banking Technology. their business and market practices. and it is important to know about that.” To make sure that you are registered Internally this improves documentation Lenelle, who is co-chair of the corporate to receive a complimentary issue go to of this kind of information, and actions sub-group of the Securities Market www.bankingtech.com/register. BT

www.bankingtech.com I 37 STANDARDS FOCUS APRIL 2012

Swift gears up for NY launch of MyStandards in May The online standards management and customer service tool from Swift is ready to go live. David Bannister reports on why it has been attracting so much attention.

MyStandards, the new web-based management and communications tool developed jointly between Swift and a group of pilot users will officially be launched in New York at the beginning of next month. The service is intended to provide a comprehensive mechanism for financial institutions to communicate service information with their customers, as well as improve internal management of standards and market practices. Bank of New York Mellon, Citi, Clearstream, JP Morgan, RBC Dexia, SIX, T2S and the UK Payments Council, have been collaborating on MyStandards in a closed pilot, and are now expected to be joined by others as the launch date approaches. Initial reports from the closed trial emerged in a session at the Sibos event My Standards has exceeded its original brief and become more than a simple tool in Toronto last year, where it became clear that it will go beyond its original addresses the problems of change Practice Group, said capturing of market brief of being a simple management tool, management. practice is also greatly facilitated by the thanks in large part to the interactive Typically, within Citi, for example, MyStandards tool. By collaborating on this, rapid development methodology that this is done manually using Excel institutions will be able to concentrate on was used to develop it. spreadsheets to capture the information, more competitive issues. “We should not Speaking at a session in the and the spreadsheets have to be be competing on standards – we should Standards Forum part of Sibos, Bernard transformed into actionable change compete on services and MyStandards can Lenelle, senior vice-president, product requirement projects as new products communicate what those services are to management for core products and and services are added. “This can be customers.” business strategy at Clearstream, said a very heavy process,” said Crabtree. The launch of MyStandards has the process had meant that “we have For Citi, the main direction is to “make been a classic soft launch – as well as been very close and had a constant that effort easier to manage, and to the trails at Sibos last year, the Swift interaction with the developers”. improve sales and implementation with Standards people have been actively Veronique Peters, project manager new customers as well as for internal promoting it and seeking participation at Bank of New York Mellon, agreed: “It dissemination of all information”. ahead of the “official” launch. has been really comfortable – Swift has Lenelle said MyStandards acts as a Before the May launch event in New been asking for feedback all through, “single repository of all data, which is York, there will be an opportunity to and we’ve been getting the results of something we have been looking for for discuss the service at the Swift London that come back to us.” a long time”. The ease of contribution Business Day at the end of April, a The success of the development means that there is a risk that the repeat of last year’s sucessful event. methodology has already seen it database could become cluttered by In the meantime, interested parties adopted in a number of other projects, some users adding or amending data, can sign up to look at the service observed Brian Crabtree, director of so it will still require a disciplined for themselves at www.swift.com/ market practices standards and Swift at management approach. MyStandards where free trials are Citi, who described it as a “very effective, Asked if this meant that there was available till the end of April. collaborative, iterative approach”. a danger that the standards approach Essentially, MyStandards is a wiki, a could itself be debased by users adding ■ Banking Technology and Swift have web-based method of collaborating on endless work-arounds and “quick- teamed up to host a roundtable event the creation and sharing of information, fixes” of their own, BNY Mellon’s with some of the initial pilot participants the most famous example of which is Peeters said: “Within the boundaries of and other interested parties. This will Wikipedia. Financial institutions can use the standard, there is freedom in terms appear online to coincide with the New MyStandards to capture information of the information you are propagating York launch event, as well as in a later about their use of standards and – that is part of your business process issue of Banking Technology. their business and market practices. and it is important to know about that.” To make sure that you are registered Internally this improves documentation Lenelle, who is co-chair of the corporate to receive a complimentary issue go to of this kind of information, and actions sub-group of the Securities Market www.bankingtech.com/register. BT

www.bankingtech.com I 37 INTERVIEW: DAVID YATES, VOCALINK APRIL 2012

The VocaLink mobile project attracted his attention Curriculum Vitae: David Yates because it addresses what he sees as an opportunity that was missing from the mobile space. Current: chief executive, VocaLink “People have been working hard to make mobile and August 2010-December 2011: president, Western Union cards function together, but actually they are not the most April 2010-December 2011: operating partner, Advent International natural partners, in the sense that the endpoints that you January 2004-March 2010: EVP & president international, First Data can create with a mobile phone are greatly more ubiquitous Corporation than the endpoints you can connect with point-of-sale,” 1998-2003: SVP and managing director, Europe, AMS he says. “If you really want to have a business for person- 1996-1998: geschäftsführer, GE Information Services to-person payments our ubiquity of accounts combined 1992-1996: managing director, Hogan Systems/CSC with the ubiquity of mobile phones gives you a fantastic 1988-1992: director, Sema Group coverage. That’s what made me most excited. I felt it was 1983-1988: sales, IBM a phenomenal building point.” Yates says that the ability to move money from Education person-to-person simply by using their mobile phone 1980-1983: Oxford University MA, Law number is only the beginning of what can be done. “You can start to imagine more use-cases, for instance to enable very small business who can’t justify a point- which will form the basis of a strategy review that is of-sale terminal – even using the Square technology scheduled for completion by the end of May. that is being deployed in the US – to be able to issue Other areas are identity, the economics of ATMs, an invoice, and for you to authorise the payment,” and how as a central utility VocaLink can reduce costs he says. “Or next time you receive a cheque, just for its members through shared capabilities. photograph it and deposit it. Why not? If you have a “We are going to spend a lot of time on the subject phone number connected to a bank account, and you of identity authentication. It goes hand-in-hand with The have an agreement about truncating cheques …” mobile payments, and the more we can provide value Ah yes, cheque replacement: when the UK Payments to the industry the better it will be for everyone,” he Council suggested that cheques be dropped by 2017, says. “Like all these things, there is an inverse relation Payments there was a great outcry in the land, and the proposal between the solidity of the authentication and the ease was shelved. P2P mobile payments might well prove of use for the consumer, so what you need to think the acceptable method for replacing them. about is how to make your easy services easy to “There were really two groups of people that were access, if I can put it that way, and have a gradation Guy perceived as being impacted,” says Yates. “First of services depending on the value to the consumer.” were those smaller merchants whom, it was naïvely As the operator of the UK ATM network, VocaLink assumed, would all be happy with a PoS terminal, is in a position to exploit the “insights this gives us The new chief executive at VocaLink is steeped in the payments world.He tells and the other part of the demography that was not into the cash business in the UK”, he says. “We are well served was older people. If you’ve got those two going to look to see how we can help our customers David Bannister why now is such a pivotal time in the development of the industry. problems, what can you do with technology to solve in that space, with more data and more transparency. In the time between the announcement of his Yates is a long-term payments industry veteran, them? A European version of Square that can deal with What we want them to understand is the level of appointment as chief executive of payment with a career that goes back 30 years to working with chip cards would be one way; another would be to ask, deployment, for instance, and we also need to review processing specialist VocaLink at the end of 2011, IBM setting up Visa in the UK, through what became why does it need to be a card payment at all? Why cost structures, because there is some stranded and actually talking the reins earlier this year, David Atos, implementing systems in European and Asia. can’t it be a mobile bank-to-bank payment?” technology sitting inside some of the banks that we Yates decided to take a bit of a break. For the past 10 years he segments his career into Underneath all of this is the Faster Payments engine could easily pick up. We also want to add a lot more He went driving in the Namibian desert for a three “chunks”, starting with First Data, where he built that the company developed, and which is the basis functionality to the ATMs than is currently out there month, an experience he describes as “interesting”. its non-US business from $300 million to “almost” $2 for a number of the plans it is currently working on. – mostly in software – for example cardless ATM There aren’t many built-up roads in an area the size billion. After six years there, he left when the WorldPay It is actively marketing it overseas under the brand withdrawals, starting remittances, different forms of of Western Europe, so this involved “driving incredibly business was put up for sale by RBS, and he became Immediate Payments, and this is something that Yates top-up, and bill payment.” fast for hours and hours”. part of the private equity team that acquired it. sees as being a signi cant development for the global That could be considered to be one thread in There’s probably a metaphor in there, struggling to That done, he was asked by former First Data payments industry – increasing interconnectedness VocaLink’s positioning of itself as the underlying get out: the payments market is not fully developed, colleagues to join Western Union, developing its between domestic ACH systems, along the lines of the shared utility for the UK banking industry and the wider and it is going through a time of incredibly fast change? business offerings in m- and e-commerce as well as card payments networks. One of the terms of licencing economy. “How can we enable the industry to share Certainly in the two months that Yates has been pre-paid cards, globally. the Immediate Payments technology from VocaLink more infrastructure where that infrastructure doesn’t at the helm of VocaLink, it has made a number of His decision to leave WU and return to Europe is a reciprocal link. “Today, in general terms, ACH need to be implemented individually?” asks Yates. announcements that place it rmly at the centre of coincided with the opportunity at VocaLink. “It wasn’t networks are not particularly connected, but tomorrow, Perhaps more pertinently, how can it do that and these changes: its creation of a proxy database through love at rst sight, but when you look at the company I would expect that they should be,” he says. “Moving please the range of parties that have an interest in what which the UK banks will be able to use mobile phones it has some extremely powerful capabilities and some money around is not convenient for people, and I think it is doing, from the public to the politicians? for the person-to-person transfer of money was the very useful assets,” he says. Among these is the there is a growing expectation from the point of view “We have a lot of constituents. We’re the National most public, but its role in the overhaul of the way in insight the company derives from being the channel of the modern consumer that they should be able to sit Grid of payments for the banks, but the Treasury is which account switching is to be streamlined may have through which the great majority of UK payments at their desk in London and send money to wherever interested, HMRC is interested, the Of ce of Fair even more profound effects for those banks. ow. “Payments are all about ubiquity, it is a network they want to send it to, so there is a an expectation Trading, the Payments Council the Bank of England …” Both of those, however, were underway before he business, and the more endpoints you have for that the money transmission networks will integrate says Yates. “One of the jobs we have to do is to ensure took the job – indeed, he cites the mobile payments commencing and terminating a payment the better it with companies like ours, and vice versa.” that we align our constituencies and the market well, project as being one of the things that attracted him is. That’s why, as a payments person, this company Along with mobile and other alternative payment and really drive for innovation. If I have an ambition for to the position in the rst place, along with a desire to interested me. All the more so in the context of mobile mechanisms, this international connectivity is one of the company it would be to be an active proponent of return to Europe after spending time overseas. phones and mobile payments.” a number of areas that Yates has focused on, and innovation rather than a passive consumer.” BT

38 I www.bankingtech.com www.bankingtech.com I 39 The VocaLink mobile project attracted his attention Curriculum Vitae: David Yates because it addresses what he sees as an opportunity that was missing from the mobile space. Current: chief executive, VocaLink “People have been working hard to make mobile and August 2010-December 2011: president, Western Union cards function together, but actually they are not the most April 2010-December 2011: operating partner, Advent International natural partners, in the sense that the endpoints that you January 2004-March 2010: EVP & president international, First Data can create with a mobile phone are greatly more ubiquitous Corporation than the endpoints you can connect with point-of-sale,” 1998-2003: SVP and managing director, Europe, AMS he says. “If you really want to have a business for person- 1996-1998: geschäftsführer, GE Information Services to-person payments our ubiquity of accounts combined 1992-1996: managing director, Hogan Systems/CSC with the ubiquity of mobile phones gives you a fantastic 1988-1992: director, Sema Group coverage. That’s what made me most excited. I felt it was 1983-1988: sales, IBM a phenomenal building point.” Yates says that the ability to move money from Education person-to-person simply by using their mobile phone 1980-1983: Oxford University MA, Law number is only the beginning of what can be done. “You can start to imagine more use-cases, for instance to enable very small business who can’t justify a point- which will form the basis of a strategy review that is of-sale terminal – even using the Square technology scheduled for completion by the end of May. that is being deployed in the US – to be able to issue Other areas are identity, the economics of ATMs, an invoice, and for you to authorise the payment,” and how as a central utility VocaLink can reduce costs he says. “Or next time you receive a cheque, just for its members through shared capabilities. photograph it and deposit it. Why not? If you have a “We are going to spend a lot of time on the subject phone number connected to a bank account, and you of identity authentication. It goes hand-in-hand with have an agreement about truncating cheques …” mobile payments, and the more we can provide value Ah yes, cheque replacement: when the UK Payments to the industry the better it will be for everyone,” he Council suggested that cheques be dropped by 2017, says. “Like all these things, there is an inverse relation there was a great outcry in the land, and the proposal between the solidity of the authentication and the ease was shelved. P2P mobile payments might well prove of use for the consumer, so what you need to think the acceptable method for replacing them. about is how to make your easy services easy to “There were really two groups of people that were access, if I can put it that way, and have a gradation perceived as being impacted,” says Yates. “First of services depending on the value to the consumer.” were those smaller merchants whom, it was naïvely As the operator of the UK ATM network, VocaLink assumed, would all be happy with a PoS terminal, is in a position to exploit the “insights this gives us and the other part of the demography that was not into the cash business in the UK”, he says. “We are well served was older people. If you’ve got those two going to look to see how we can help our customers problems, what can you do with technology to solve in that space, with more data and more transparency. them? A European version of Square that can deal with What we want them to understand is the level of chip cards would be one way; another would be to ask, deployment, for instance, and we also need to review why does it need to be a card payment at all? Why cost structures, because there is some stranded can’t it be a mobile bank-to-bank payment?” technology sitting inside some of the banks that we Underneath all of this is the Faster Payments engine could easily pick up. We also want to add a lot more that the company developed, and which is the basis functionality to the ATMs than is currently out there for a number of the plans it is currently working on. – mostly in software – for example cardless ATM It is actively marketing it overseas under the brand withdrawals, starting remittances, different forms of Immediate Payments, and this is something that Yates top-up, and bill payment.” sees as being a signi cant development for the global That could be considered to be one thread in payments industry – increasing interconnectedness VocaLink’s positioning of itself as the underlying between domestic ACH systems, along the lines of the shared utility for the UK banking industry and the wider card payments networks. One of the terms of licencing economy. “How can we enable the industry to share the Immediate Payments technology from VocaLink more infrastructure where that infrastructure doesn’t is a reciprocal link. “Today, in general terms, ACH need to be implemented individually?” asks Yates. networks are not particularly connected, but tomorrow, Perhaps more pertinently, how can it do that and I would expect that they should be,” he says. “Moving please the range of parties that have an interest in what money around is not convenient for people, and I think it is doing, from the public to the politicians? there is a growing expectation from the point of view “We have a lot of constituents. We’re the National of the modern consumer that they should be able to sit Grid of payments for the banks, but the Treasury is at their desk in London and send money to wherever interested, HMRC is interested, the Of ce of Fair they want to send it to, so there is a an expectation Trading, the Payments Council the Bank of England …” that the money transmission networks will integrate says Yates. “One of the jobs we have to do is to ensure with companies like ours, and vice versa.” that we align our constituencies and the market well, Along with mobile and other alternative payment and really drive for innovation. If I have an ambition for mechanisms, this international connectivity is one of the company it would be to be an active proponent of a number of areas that Yates has focused on, and innovation rather than a passive consumer.” BT

www.bankingtech.com I 39 PeoPle April 2012

SponSored comment APrIL 2012 Appointments Building a credit value adjustment system into a bank Lloyds picks England to head transaction banking unit SunGard Adaptiv’s Andrew Hudson examines the hidden complexities of building a CVA system and the importance of making it flexible and scalable. lloyds Bank Wholesale Banking and Markets has appointed Andrew england as head of transaction banking. England will report to Andrew Géczy, chief executive of Credit Value Adjustment (CVA) is the market value of counterparty that are found within most organisations. Netting and collateral Wholesale Banking and Markets. Under England’s leadership, the transaction banking credit risk, a calculation of the difference between the risk-free agreements, which are rarely stored in the same system as the team will “continue to build upon lloyds’ transaction banking proposition and evolve its valuation of a portfolio and a portfolio value incorporating the trade data, must also be pulled into the calculation. product offering which supports the activities of corporate customers”. England joined possibility of the counterparty’s default. It originated within banks at the end of March. He is based in london. as an accounting measure and the introduction of accounting Basic versus state-of-the-art England has spent his entire career in banking, which began more than 30 years standard IAS39 in 2000 required banks to provide a CVA number Of course, building a state-of-the-art system with complete ago with lloyds Bank which he joined as a trainee. primarily working in the bank’s every three months. support for all possible functionality is a daunting proposition, international divisions, England spent almost 10 years with lloyds before joining Citi especially if a bank is starting from scratch. Consequently, many in 1990. Whilst at Citi, England held a number of roles, with a particular focus on cash For years there was little demand on CVA systems. Bank credit banks may feel that they can address only their current CVA and trade management in paris and Madrid. He then joined Deutsche Bank in 1998, spreads showed little volatility and P&L swings due to CVA needs and employ a rigid point solution that uses basic Monte initially with responsibility for global product management, before becoming part of the changes were relatively small. However, following the Lehman Carlo simulation rather than taking a scalable and real-time management team responsible for Deutsche’s transaction banking unit. Brothers default in 2008 and the ensuing credit chaos, P&L enabled CVA approach. Most recently, England has worked at Unicredit Group, which he joined in 2008. swings were measured in billions of dollars and interest in CVA Whilst there he was its Head of CEE Global Transaction Banking, responsible for began to grow. Many banks are now moving towards calculating This model is not sustainable. A bank’s CVA requirements may establishing a transaction bank across 19 countries in the region and building its market CVA on a daily and even intra-day basis. be simple now but they will quickly become more complex. Any share and revenue in Corporate and Fi products. cost saved in the initial investment will be squandered as soon England will take over from richard Dallas, who has held the role for the last Building a new CVA system is a notoriously complicated as the system is no longer able to keep up. For example, CVA is three years, and who has decided to pursue other opportunities outside lloyds process, especially if it is intended to produce daily rather a cross-asset, portfolio level calculation, and banks should not Banking Group. than monthly calculations. Consequently banks must be clear be seduced into thinking that these analytics can be added to a about their objectives when building a new CVA system. This system built to run single deal valuations. They will have to build is not always as straightforward as it sounds. The level of a whole new solution. Georg Schubiger is leaving his position projects, Beck implemented a global His experience in exchange-related sophistication a bank wishes to pursue will shape the system’s as chief operating officer and member of risk management and control system, start-ups includes roles in establishing design and associated workflow. Or consider the example of an incremental pre-deal CVA pricing the executive board of Danske Bank to and participated in the design and the Spanish CO2 emissions exchange tool. A system that is fast enough to calculate CVA on the FX join Vontobel Group, a Swiss bank, as a implementation of a global iT platform for SENDECO2, as well as MTS Spain, For example, in the early days of CVA, some banks got by with and rates books may be good enough right now. However, next member of its executive management investment banking at UniCredit. While at the Spanish government debt market simple approximations. Nowadays, a full Monte Carlo approach year it may need to include equities and credit, calculate 100 team. Schubiger is leaving because UniCredit he was also in charge of several owned by the london Stock Exchange is commonplace. Admittedly, building a basic Monte Carlo Greeks overnight, and capture wrong-way risk and funding value he wants to return to Switzerland after application management areas, including Group. per-Anders Häll-Bedman, who simulation engine that can turn out raw CVA numbers for standard adjustments too. 12 years working abroad. Schubiger middle and back-office, accounting and has been acting chief executive since trades is not overly challenging. However, the additional features joined Sampo Bank in Finland in 2002 product control systems, at its branches November 2011, will return to his position and optional extras can cause difficulty. An end-of-day system Banks need to consider this issue at the outset and future and became part of the Danske Bank in london, Vienna, Milan, New York and of Deputy chief executive and assume needs workflow to marshal and initialise the calculation. Banks proof systems wherever possible. They may decide to design a Group when it acquired Sampo Bank Asia. the operational leadership for the drive wishing to hedge CVA to reduce P&L volatility need an interface system that can be constructed in phases, starting with essential in 2006. Since 2010, as chief operating towards the new growth objectives. to view the CVA greeks aggregated across their counterparties. functionality and followed by more sophisticated processes as officer, he has been a member of Javier Tordable has been appointed as the project gains momentum. Even banks that want to install the Danske Bank Group’s Executive chief executive of technology provider TRG Post Trade Services has And what if a bank decides to exert some control over traders’ a state-of-the-art system from the outset will find that CVA Board, with responsibility for business Cinnober Financial Technology. hired Steven Ramsay as director of behaviour by employing CVA numbers as part of the front-office is an evolving concept. As practice and regulation evolve, development, operations, iT, marketing Tordable has worked at a number of implementation services. He previously pre-deal pricing? Its system must support real-time incremental new techniques will emerge, and technology will become and procurement. He will continue with exchanges and trading companies, held senior roles with linklaters and CVA calculations and be capable of calculating, for every deal, more accessible. his current responsibilities until he resigns including Deutsche Börse, Eurex and the Jp Morgan and will be responsible for a CVA price that captures the effects of the whole portfolio. That no later than at the end of July. Danske london Stock Exchange’s MTS division developing and managing TrG’s services price must then be returned to the trading system in seconds. Banks should see the development of a CVA system as akin to has not yet made a decision on a possible over the past 15 years. in the last 18 to support and aid clients and partners climbing a ladder. Different banks will be on different rungs as they successor. months, Tordable has been working at to manage and deliver their change The number of valuations required when calculating CVA pick the point that best suits their capability and capacity. But they pAVE, which was intended to be Spain’s portfolios including client on-boarding, sensitivities can run into the tens of millions – for every trade. must also ensure that they are able to progress up that ladder by integrated banking systems developer first MTF, to attract international traders project lifecycle management, resourcing Speed and scalability are therefore critical components and adopting a framework and architecture that is scalable and allows Avaloq has hired Thomas Beck as its and increase liquidity in Spanish equities, and iT delivery. any enterprise-wide system must be able to scale well with for further development in both performance and sophistication. head of innovation development. Beck but the venture was put on hold due increasing hardware while performing accurate valuations many joins from UniCredit Global information to the “challenging market and harsh Asset management specialist BI-SAM has times faster than a traditional front-office pricing system. There are still a number of uncertainties around CVA. Some of the Services and succeeds Simon Kauth, who financial environment”, not least in the merged paris, london and luxembourg specifics of the regulatory requirements are still unclear. Neither now heads Avaloq’s new development Spanish market. Earlier Tordable spent sales and client services teams to create a Banks that choose to adopt a more sophisticated approach is it clear how the market for hedging of credit will evolve. It is centre in the UK. Beck will report four years in Frankfurt and london as new EMEA structure and appointed Peter to CVA also face a more complicated data challenge. CVA is a therefore essential that systems must be flexible and scalable directly to chief technology officer Klaus senior advisor to Deutsche Börse and ellis as chief operating officer.p rior to joining counterparty-level calculation, not a trade-level adjustment, and to handle not just today’s requirements but new demands as rausch, and will be responsible for the Eurex for new products and market Bi-SAM, he was managing director of investit trade information must be aggregated across the myriad systems market practices around CVA further develop. implementation of product strategy and exchange acquisitions. in North America and also spent eight years at Deutsche Asset the further development of the Avaloq he was involved in the a/c/e cooperation Management, where he held a number of Contact the Adaptiv CVA Studio team: +44 (0)208 081 2779 Banking System. Among other complex with CBOT, now part of the CME Group. roles in iT and in the business. > [email protected] www.sungard.com/cva/bankingtech www.bankingtech.com I 41 PeoPle April 2012 Appointments Lloyds picks England to head transaction banking unit

lloyds Bank Wholesale Banking and Markets has appointed Andrew england as head of transaction banking. England will report to Andrew Géczy, chief executive of Wholesale Banking and Markets. Under England’s leadership, the transaction banking team will “continue to build upon lloyds’ transaction banking proposition and evolve its product offering which supports the activities of corporate customers”. England joined at the end of March. He is based in london. England has spent his entire career in banking, which began more than 30 years ago with lloyds Bank which he joined as a trainee. primarily working in the bank’s international divisions, England spent almost 10 years with lloyds before joining Citi in 1990. Whilst at Citi, England held a number of roles, with a particular focus on cash and trade management in paris and Madrid. He then joined Deutsche Bank in 1998, initially with responsibility for global product management, before becoming part of the management team responsible for Deutsche’s transaction banking unit. Most recently, England has worked at Unicredit Group, which he joined in 2008. Whilst there he was its Head of CEE Global Transaction Banking, responsible for establishing a transaction bank across 19 countries in the region and building its market share and revenue in Corporate and Fi products. England will take over from richard Dallas, who has held the role for the last three years, and who has decided to pursue other opportunities outside lloyds Banking Group.

Georg Schubiger is leaving his position projects, Beck implemented a global His experience in exchange-related as chief operating officer and member of risk management and control system, start-ups includes roles in establishing the executive board of Danske Bank to and participated in the design and the Spanish CO2 emissions exchange join Vontobel Group, a Swiss bank, as a implementation of a global iT platform for SENDECO2, as well as MTS Spain, member of its executive management investment banking at UniCredit. While at the Spanish government debt market team. Schubiger is leaving because UniCredit he was also in charge of several owned by the london Stock Exchange he wants to return to Switzerland after application management areas, including Group. per-Anders Häll-Bedman, who 12 years working abroad. Schubiger middle and back-office, accounting and has been acting chief executive since joined Sampo Bank in Finland in 2002 product control systems, at its branches November 2011, will return to his position and became part of the Danske Bank in london, Vienna, Milan, New York and of Deputy chief executive and assume Group when it acquired Sampo Bank Asia. the operational leadership for the drive in 2006. Since 2010, as chief operating towards the new growth objectives. officer, he has been a member of Javier Tordable has been appointed as the Danske Bank Group’s Executive chief executive of technology provider TRG Post Trade Services has Board, with responsibility for business Cinnober Financial Technology. hired Steven Ramsay as director of development, operations, iT, marketing Tordable has worked at a number of implementation services. He previously and procurement. He will continue with exchanges and trading companies, held senior roles with linklaters and his current responsibilities until he resigns including Deutsche Börse, Eurex and the Jp Morgan and will be responsible for no later than at the end of July. Danske london Stock Exchange’s MTS division developing and managing TrG’s services has not yet made a decision on a possible over the past 15 years. in the last 18 to support and aid clients and partners successor. months, Tordable has been working at to manage and deliver their change pAVE, which was intended to be Spain’s portfolios including client on-boarding, integrated banking systems developer first MTF, to attract international traders project lifecycle management, resourcing Avaloq has hired Thomas Beck as its and increase liquidity in Spanish equities, and iT delivery. head of innovation development. Beck but the venture was put on hold due joins from UniCredit Global information to the “challenging market and harsh Asset management specialist BI-SAM has Services and succeeds Simon Kauth, who financial environment”, not least in the merged paris, london and luxembourg now heads Avaloq’s new development Spanish market. Earlier Tordable spent sales and client services teams to create a centre in the UK. Beck will report four years in Frankfurt and london as new EMEA structure and appointed Peter directly to chief technology officer Klaus senior advisor to Deutsche Börse and ellis as chief operating officer.p rior to joining rausch, and will be responsible for the Eurex for new products and market Bi-SAM, he was managing director of investit implementation of product strategy and exchange acquisitions. in North America and also spent eight years at Deutsche Asset the further development of the Avaloq he was involved in the a/c/e cooperation Management, where he held a number of Banking System. Among other complex with CBOT, now part of the CME Group. roles in iT and in the business. >

www.bankingtech.com I 41 Comment APrIL 2012

orange Business Services Trading than 20 years’ experience in the financial events Solutions has appointed Vicente linares services industry across retail banking How technology is shaping as vice president of Spain, portugal and and insurance outsourcing contracts mAy 15-16 2012 Kevin Coles, latin America. He will be responsible and acquisitions. Before joining Capco, eBAday 2012, edinburgh the way we pay Lloyds Banking Group for developing the company’s business he was chief executive of Calyx Group, Now running over two days, the EBAday operations across latin America and a mid-sized iT provider of infrastructure payments event will be held in Scotland. Innovation in banking technology is, currently banks are leading many of the Synergising with mobile payments is iberia including sales, finance, engineering and carrier services. prior to this he www.ebaday.com ultimately, driven by practicality; one trials and tests that are occurring, driving the switch to mobile banking – already and operations. Most recently he was an was a member of the group board area that this applies to more than development and innovation far more than online banking is extensively developed executive director at software firm Serban of management and chief executive mAy 22-23 2012 most is payments. Here is where we people realise, and playing a fundamental and entrenched the way we manage our in Madrid. He has also been country at Getronics and director of financial Financial Data management Forum, are seeing arguably some of the greatest role in bringing new products to the finances and this is rapidly expanding manager for Clickandbuy international services at what is now logica. He has Amsterdam levels of innovation, development and market. This development can already onto new platforms. Already we have seen and sales director for Fractalia remote previously served as visiting professor A new event intended to deliver new implementation of new technology. be seen in products that bank customers the Faster Payments Directive providing Systems. of City University business school, now approaches and proven strategies of Increasingly we are seeing banks push already have access to. Demand for such impetus for change as payments near known as Cass Business School. financial data management to comply products in this area, as they roll out new products will only intensify as consumers real time, and the prospect of integrating Commodities trading and risk specialist with regulatory requirements and minimise capabilities for customers. realise the convenience that they offer. banking with payments is compelling. Brady has named Jon Hobbs as its 4sight Financial Software, a provider of systemic risk. It is a competitive environment and Mobile payment technology is certainly The move to one device seems inevitable chief technology officer. He has worked software and consultancy to the securities http://finance.flemingeurope.com/ we have seen new players, such as not limited to the consumer environment and, with the advent of mobile wallets, for Brady plc for the past 17 years, most finance and collateral management PayPal, continuing to drive evolution in and products being pioneered in this area banking will become ‘on-the-go’. Banks recently heading up the Brady Metals markets, has hired Antonio Neri as mAy 22-23 2012 the market and innovate. This has forced are beginning to enter the business-to- have a deep understanding of how their Development team. During this time he executive director. he will head the 9th Annual Retail Banking existing players to look towards their business market as corporates realise the clients use mobile payment systems and has led initiatives to “define, execute and sales, pre-sales, marketing and account This year’s retail banking event will provide current models and think about what the efficiency saving and value-add of flexible mobile banking services. This knowledge articulate technology strategy, aligned management team globally. prior to joining delegates with the latest best-case studies businesses they serve really want. Crucial and mobile technology. Banks, standing is in constant use as new methods and that strategy with industry trends and 4sight, Neri was formerly head of EMEA on business strategies and retail banking now to the technology being developed over both these strands of development, technologies are created to offer that ever best practices and driven the adoption of sales at lombard risk Management. products in the whole European region. is the experience that both retailer and are seeing numerous advances unfolding. more bespoke service. a Service Oriented Architecture across the http://finance.flemingeurope.com consumer have with mobile payments; By driving the development of technology We are now seeing banks advancing group”. David Sear, divisional managing director consumers want a seamless experience banks are able to use some of their more mobile payment technology at an ever of Travelex Global Business Payments mAy 23 – 24 2012 while retailers are eager to be able to traditional strengths; they have in-depth faster rate as the options for how, when and PA Consulting Group has hired Gavin and a former director of Worldpay, has Corporate Banking europe, prague dynamically respond to demand and and time-proven knowledge of payments where we pay and bank become ever more Neilson to its financial services team in been appointed chairman at Semafone, An interactive conference covering key target their approach. and the associated risk management tailored to our needs. These technological Scotland. Neilson specialises in business a secure voice transaction company. A areas of the corporate banking industry With over 100 million phones in the aspects and a great level of consumer advances, combined with the knowledge change and iT and will spearhead the senior executive at Worldpay from 1999 returns this year with an elaborated UK banks already have an engaged client familiarity and interaction. Consumers of customers that they provide mean development of pA’s financial services to 2003, Sear experienced first-hand program and special features. Among the base that understands the technology want to know when they are making and that we are seeing development and business in Scotland. He has worked the challenges of maintaining consumer speakers is Ian Alderton of RBS Corporate available to them. Within this, there is a receiving payments; with whom they are innovation at unprecedented levels. While across multiple sectors over the past 20 confidence in new channels for credit Banking, winner of the 2011 Banking huge opportunity for banks to innovate, undertaking the transaction and that it mobile payments are already available years, with a particular focus in insurance, card payments. He is also chairman of Technology CIO of the Year Award. create technological developments and is executed in such a way that it is not to us in a number of forms, only the tip long-term savings and investments and technology company Bango. http://finance.flemingeurope.com enable the services that will come to going to be fraudulently misused now or of the iceberg has been seen. The way retail and wholesale banking. immediately shape the payments market. Services in the future – banks can offer this level customers interact with their bank is set before joining pA Neilson was change Forex Club, an online brokerage company June 19-21 2012 and information are set to be supplied to of security. to change as issues such as location director at Standard life. Before that in russia and the CiS, has appointed siFmA Financial services technology where people want and in the format they The mobile payment technology and access disappear and the way they he spent three years at lloyds Banking Michael Klena as chief executive of its Leaders Forum and expo, new york need – enabling them to bank, transact already being rolled out by banks in the bank becomes synonymous with the way Group in a number of roles including US business, headquartered on Wall The old SIA Show continues to remodel and pay how they want. Service providers UK will be the precursor to the delivery they purchase. A single mobile wallet is banking operations integration director. Street. Klena will oversee strategy and and rebrand as it regains its former pre- are set to offer far more as they go further of all payments through mobile devices. far closer than many people realise and direction for Forex Club’s US business. eminence as the event for securities to meet the needs of a more empowered At the moment there are a multitude of in many cases the technology is already Financial services consultancy Accourt Before joining the company, he held industry technologists. and aware client base with technology trials happening a number of banks and there; it is just a case of banks getting it has hired Nick Hughes as a payments several management positions at E*Trade www.sifma.org/events enabling an ever more bespoke service. mobile providers around NFC (near-field into the hands of consumers. consultant. previously, he has held a Financial, including head of risk and It is important that perceptions of communications) payments. Ultimately variety of posts at Visa Europe, Seos, Ai operations for the company’s brokerage 27-28 June 2012 banks as reluctant to change or respond this is anticipated to replace the card not Kevin Coles is specialist payments Camber Entertainment and Sirius Analytical business. prior to that he spent some ten european Clearing and settlement, to developments in comparison to just for low value, vanilla payments but for advisor, transaction banking, Lloyds instruments. At Visa he was a senior member years at TD Waterhouse in a number of London their newer peers are ignored as false – all payments. Banking Group. of the implementation management and positions in retail, customer services and “Keeping abreast of infrastructural consultancy team, working on projects financial products. BT challenges in the current environment” is including mission-critical debit card portfolio the theme of this event, featuring updates migrations, debit card portfolio and branch New York-based fixed income platform from the European Commission and Are you getting the most divestments and product system launches. developer BondDesk has appointed European Central Bank. Donald Swartz as head of technology. www.informaglobalevents.com out of banking technology Capco has appointed Tara Brady as a He has more than 15 years of experience partner and member of the European at firms such as Freddie Mac, Capital oCtoBeR 29 – novemBeR 2 Visit www.bankingtech.com/bulletin to register for our management team. Brady will be One Financial Services and Sprint sibos, osaka regular email bulletin to make sure you receive all the news responsible for helping expand Capco’s Corporation. His responsibilities will Registration for Swift’s annual Sibos event is straight to your inbox. strategic financial services consulting include completing the firm’s technology now open with the theme of the conference For further information on advertising opportunities please contact: business across Europe including key infrastructure projects and driving the being “New realities: reshaping our industry Leon Thomson markets such as the United Kingdom, roll-out of BondDesk’s financial advisor through collective engagement”. Tel: +44 (0)20 3377 3493 France and Germany. Brady has more platform, BondWorks. BT www.sibos.com Email: [email protected] www.bankingtech.com

42 I www.bankingtech.com www.bankingtech.com I 43 Comment APrIL 2012

How technology is shaping Kevin Coles, the way we pay Lloyds Banking Group

Innovation in banking technology is, currently banks are leading many of the Synergising with mobile payments is ultimately, driven by practicality; one trials and tests that are occurring, driving the switch to mobile banking – already area that this applies to more than development and innovation far more than online banking is extensively developed most is payments. Here is where we people realise, and playing a fundamental and entrenched the way we manage our are seeing arguably some of the greatest role in bringing new products to the finances and this is rapidly expanding levels of innovation, development and market. This development can already onto new platforms. Already we have seen implementation of new technology. be seen in products that bank customers the Faster Payments Directive providing Increasingly we are seeing banks push already have access to. Demand for such impetus for change as payments near products in this area, as they roll out new products will only intensify as consumers real time, and the prospect of integrating capabilities for customers. realise the convenience that they offer. banking with payments is compelling. It is a competitive environment and Mobile payment technology is certainly The move to one device seems inevitable we have seen new players, such as not limited to the consumer environment and, with the advent of mobile wallets, PayPal, continuing to drive evolution in and products being pioneered in this area banking will become ‘on-the-go’. Banks the market and innovate. This has forced are beginning to enter the business-to- have a deep understanding of how their existing players to look towards their business market as corporates realise the clients use mobile payment systems and current models and think about what the efficiency saving and value-add of flexible mobile banking services. This knowledge businesses they serve really want. Crucial and mobile technology. Banks, standing is in constant use as new methods and now to the technology being developed over both these strands of development, technologies are created to offer that ever is the experience that both retailer and are seeing numerous advances unfolding. more bespoke service. consumer have with mobile payments; By driving the development of technology We are now seeing banks advancing consumers want a seamless experience banks are able to use some of their more mobile payment technology at an ever while retailers are eager to be able to traditional strengths; they have in-depth faster rate as the options for how, when and dynamically respond to demand and and time-proven knowledge of payments where we pay and bank become ever more target their approach. and the associated risk management tailored to our needs. These technological With over 100 million phones in the aspects and a great level of consumer advances, combined with the knowledge UK banks already have an engaged client familiarity and interaction. Consumers of customers that they provide mean base that understands the technology want to know when they are making and that we are seeing development and available to them. Within this, there is a receiving payments; with whom they are innovation at unprecedented levels. While huge opportunity for banks to innovate, undertaking the transaction and that it mobile payments are already available create technological developments and is executed in such a way that it is not to us in a number of forms, only the tip enable the services that will come to going to be fraudulently misused now or of the iceberg has been seen. The way shape the payments market. Services in the future – banks can offer this level customers interact with their bank is set and information are set to be supplied to of security. to change as issues such as location where people want and in the format they The mobile payment technology and access disappear and the way they need – enabling them to bank, transact already being rolled out by banks in the bank becomes synonymous with the way and pay how they want. Service providers UK will be the precursor to the delivery they purchase. A single mobile wallet is are set to offer far more as they go further of all payments through mobile devices. far closer than many people realise and to meet the needs of a more empowered At the moment there are a multitude of in many cases the technology is already and aware client base with technology trials happening a number of banks and there; it is just a case of banks getting it enabling an ever more bespoke service. mobile providers around NFC (near-field into the hands of consumers. It is important that perceptions of communications) payments. Ultimately banks as reluctant to change or respond this is anticipated to replace the card not Kevin Coles is specialist payments to developments in comparison to just for low value, vanilla payments but for advisor, transaction banking, Lloyds their newer peers are ignored as false – all payments. Banking Group. Are you getting the most out of banking technology Visit www.bankingtech.com/bulletin to register for our regular email bulletin to make sure you receive all the news straight to your inbox.

For further information on advertising opportunities please contact: Leon Thomson Tel: +44 (0)20 3377 3493 Email: [email protected] www.bankingtech.com

www.bankingtech.com I 43 SponSoRed CommenT Comment APrIL 2012 AprIL 2012

Taking back control Peter Fawcett, of payments TCS

the payments industry is experiencing providers. However, it is the banks that ensure security, compliance and delivery significant change. This is driven by have to maintain the older mechanisms for payments across the ecosystem. innovation across industries such as and this could reduce their ability to They know how to make global payment Bypass the hype and get to retail, telecoms, and banking and finance, respond quickly to new innovations. processing mainstream and reliable, but combined with changes in the way in Banks need to identify a consolidated what they now need to address is their which consumers communicate with each strategy for an integrated payment accessibility and the ease of initiating grips with the cloud other and make purchases. solution and consider how adopting new and following up on payments. They Banks are under pressure from technologies can enable them to deliver should build on their experience to regulation, alternative payment these solutions. Simultaneously they drive innovation and take advantage of The cloud is maturing as a proposition. IT leaders in to use key events as a springboard for your migration to processors and a growing variety of must become more agile in response to new technologies such as rule-based organisations of all kinds are turning to the cloud to provide cloud Infrastructure as a Service. payment channels. Today, consumers changing market drivers. processing and data warehousing. high availability of the infrastructure, applications and can purchase goods and services using So is there really an immediate threat Embracing newer technologies, like data needed to dynamically support business objectives. u Self-service vs Support – When cloud infrastructure cards, cheques, PayPal, Google, iTunes, to the banks? There have been multiple mobile and social media, will revitalise This is evidenced by a recent study in which 8 out of 10 can be provisioned remotely, where does that leave the via social media and increasingly through drivers for innovation in the payments the banks’ place within the payments CIOs said they had already migrated some applications or traditional values of customer service? their mobile phones. These payments initiation arena in the past decade, such ecosystem. Banks will then be infrastructure into the cloud*. But much of the conversation range from large business purchases to as continued demands by the consumer positioned to be the key stakeholders around cloud still hasn’t moved on from feeding the Register to attend live: micropayments of just a few pence. for faster and safer ways to pay for retail as regulatory challenges catch up with hyperbole to addressing the practicalities. u From Legacy to Leading – Discover the best practice The growing ease and convenience purchases and for instant money transfers non-bank payment processors. approach to creating a scalable and flexible combination of new and emergent payment methods between peers. However, widespread The winners in this new environment Our 20:20 cloud webinar series is designed to cut through of in-house and cloud infrastructure that doesn’t require anytime and anywhere is alluring to adoption has been hampered by the are going to be those that provide better the chatter and provide organisations with pragmatic you to lose your legacy overnight. both consumers and the merchants’ complexity of the payments value chain, accessibility for initiating payments. guidance on getting started. These events are broadcast ecosystem. Significantly, it has opened the lack of global standards, and the One possible collaborative solution live and recorded for your convenience. The format includes Live event: Thursday 12th April 2012, 14:00 GMT the door to a large number of non-banking investment in time and money required could be that the banks act as a “trusted a lively 20-minute discussion of the pressing issues among Visit www.2020webinars.com to view the series so far and organisations entering the payments for legacy system integration. service manager” collaborating with our panel of industry experts, followed by a 10-minute register to attend our forthcoming live webinar – “From initiation and processing arena. To be truly successful, a new payment competitors and sharing infrastructure audience Q&A. Legacy to Leading”. These more nimble competitors, mechanism will need consumers to enable them to remain nimble and new to the market, are not weighed and merchants to recognise a clear profitable in payment processing. In Available to watch on demand: About SunGard down by the infrastructures that exist in improvement over existing payments this relationship banks would focus u The Quick Win – The cloud doesn’t demand an “all For over a decade, SunGard Availability Services has traditional banking set-ups. Yet, if they methods. There will also need to be the on their core business of processing or nothing” approach – businesses can migrate their been applying the know-how gained from a long heritage want to take control of the end-to-end prospect of a viable business model for all payments but would take advantage of applications individually or in stages – but where best to in disaster recovery to help keep the leading businesses payment process, they will undoubtedly parties in the value chain. a more innovative approach to payment start? in every major industry, as well as the public sector, become more affected by the regulation, In short, the industry is still looking initiation and the extended flexibility of continuously available and in control of their critical systems. compliance and security rules that govern for the ideal payment instrument, which the electronic wallet. u The Business Case Roadmap – Hardware end-of-life the banks today. would need the following characteristics Mobile payments initiation today imminent? New application ready to roll out? Find out how SunGard. Where else would you build your cloud? How do the banks respond? They are to be a success: is firmly focused on the consumer, at a crossroads where they can either ■ Universality – everyone needs to be but corporate adoption for client on- hope that regulation and a lack of global able to use it for all types of payments boarding and integration should be one payments standards will drive the new ■ Convenience – it needs to be easy to of the key opportunities for the banks to entrants out of the market, or they can use, cheap and always available continue on a growth curve, provided recognise the huge opportunity that is ■ Security – people need to feel safe they have invested in flexible, extensible in front of them and embrace this new using it platforms, possibly tapping into trends payments paradigm. ■ Good value – it needs to be as good as like cloud and big data. In order to determine how banks should cash for transfer of value In conclusion, this is a time of great approach new payment mechanisms, it In order to be the most effective change and opportunity. Those banks is worth looking at the new technologies provider of choice for consumers, that recognise this can be successful, themselves. Historically, the trend in the banks should use their knowledge not only by embracing the new payment adoption of new payment mechanisms is and experience in the full end-to- opportunities and mechanisms, but by not to retire the existing ones, but rather end payments value chain to redefine leveraging their proven experience to to expand the range of options by adding process. This will enable them to provide deliver a truly integrated, secure and new mechanisms. A good example of a streamlined, integrated, multi-channel streamlined global payment environment the consumer’s reluctance to let go of approach to payments, which meets that provides a better service to their old payment mechanisms is the recent the above objectives and provides a customers. Surely that is the true vision situation where the UK Payments Council complete solution to their customers. of any service provider. was forced to withdraw the retirement of Taking this approach might even enable cheques in the UK. the graceful retirement of cheques as a Peter Fawcett is consulting practice This means that there is now a plethora payment mechanism. leader for retail and commercial of possible payment options to choose Banks have already invested in banking in europe at tata Consulting Check out SunGard’s 20:20 webinar programme – a series of 20-minute expert panel discussions around key cloud from, supplied by different sorts of capital-intensive infrastructures to Services. infrastructure themes. Visit www.2020webinars.com for more information.

* Vanson Bourne (2011) – study of 250 CIOs of UK mid-tier businesses of 250-1000 employees. www.bankingtech.com I 45 Comment APrIL 2012

Taking back control Peter Fawcett, of payments TCS the payments industry is experiencing providers. However, it is the banks that ensure security, compliance and delivery significant change. This is driven by have to maintain the older mechanisms for payments across the ecosystem. innovation across industries such as and this could reduce their ability to They know how to make global payment retail, telecoms, and banking and finance, respond quickly to new innovations. processing mainstream and reliable, but combined with changes in the way in Banks need to identify a consolidated what they now need to address is their which consumers communicate with each strategy for an integrated payment accessibility and the ease of initiating other and make purchases. solution and consider how adopting new and following up on payments. They Banks are under pressure from technologies can enable them to deliver should build on their experience to regulation, alternative payment these solutions. Simultaneously they drive innovation and take advantage of processors and a growing variety of must become more agile in response to new technologies such as rule-based payment channels. Today, consumers changing market drivers. processing and data warehousing. can purchase goods and services using So is there really an immediate threat Embracing newer technologies, like cards, cheques, PayPal, Google, iTunes, to the banks? There have been multiple mobile and social media, will revitalise via social media and increasingly through drivers for innovation in the payments the banks’ place within the payments their mobile phones. These payments initiation arena in the past decade, such ecosystem. Banks will then be range from large business purchases to as continued demands by the consumer positioned to be the key stakeholders micropayments of just a few pence. for faster and safer ways to pay for retail as regulatory challenges catch up with The growing ease and convenience purchases and for instant money transfers non-bank payment processors. of new and emergent payment methods between peers. However, widespread The winners in this new environment anytime and anywhere is alluring to adoption has been hampered by the are going to be those that provide better both consumers and the merchants’ complexity of the payments value chain, accessibility for initiating payments. ecosystem. Significantly, it has opened the lack of global standards, and the One possible collaborative solution the door to a large number of non-banking investment in time and money required could be that the banks act as a “trusted organisations entering the payments for legacy system integration. service manager” collaborating with initiation and processing arena. To be truly successful, a new payment competitors and sharing infrastructure These more nimble competitors, mechanism will need consumers to enable them to remain nimble and new to the market, are not weighed and merchants to recognise a clear profitable in payment processing. In down by the infrastructures that exist in improvement over existing payments this relationship banks would focus traditional banking set-ups. Yet, if they methods. There will also need to be the on their core business of processing want to take control of the end-to-end prospect of a viable business model for all payments but would take advantage of payment process, they will undoubtedly parties in the value chain. a more innovative approach to payment become more affected by the regulation, In short, the industry is still looking initiation and the extended flexibility of compliance and security rules that govern for the ideal payment instrument, which the electronic wallet. the banks today. would need the following characteristics Mobile payments initiation today How do the banks respond? They are to be a success: is firmly focused on the consumer, at a crossroads where they can either ■ Universality – everyone needs to be but corporate adoption for client on- hope that regulation and a lack of global able to use it for all types of payments boarding and integration should be one payments standards will drive the new ■ Convenience – it needs to be easy to of the key opportunities for the banks to entrants out of the market, or they can use, cheap and always available continue on a growth curve, provided recognise the huge opportunity that is ■ Security – people need to feel safe they have invested in flexible, extensible in front of them and embrace this new using it platforms, possibly tapping into trends payments paradigm. ■ Good value – it needs to be as good as like cloud and big data. In order to determine how banks should cash for transfer of value In conclusion, this is a time of great approach new payment mechanisms, it In order to be the most effective change and opportunity. Those banks is worth looking at the new technologies provider of choice for consumers, that recognise this can be successful, themselves. Historically, the trend in the banks should use their knowledge not only by embracing the new payment adoption of new payment mechanisms is and experience in the full end-to- opportunities and mechanisms, but by not to retire the existing ones, but rather end payments value chain to redefine leveraging their proven experience to to expand the range of options by adding process. This will enable them to provide deliver a truly integrated, secure and new mechanisms. A good example of a streamlined, integrated, multi-channel streamlined global payment environment the consumer’s reluctance to let go of approach to payments, which meets that provides a better service to their old payment mechanisms is the recent the above objectives and provides a customers. Surely that is the true vision situation where the UK Payments Council complete solution to their customers. of any service provider. was forced to withdraw the retirement of Taking this approach might even enable cheques in the UK. the graceful retirement of cheques as a Peter Fawcett is consulting practice This means that there is now a plethora payment mechanism. leader for retail and commercial of possible payment options to choose Banks have already invested in banking in europe at tata Consulting from, supplied by different sorts of capital-intensive infrastructures to Services.

www.bankingtech.com I 45 Directory of service

Accuity

Accuity is the world’s leading provider of international payment routing data and AML screening software enabling banks and corporations to maximise payment efficiency and ensure AML compliance. Our Payment solutions help maximise rates of payment STP and with our recent acquisition of CBNet, we are now the only company to source all payment data, including SSI’s, SWIFT/BICs and National Bank Accuity Codes directly from the authoritative sources. 1 Quality Court Our compliance suite includes the world’s first compliance filtering engine, introduced in 1994, as well Chancery Lane as a range of caution lists and screening solutions that provide a prime defence against participation in illicit London WC2A 1HR financial activities, such as money laundering. United Kingdom Our strategic services Group provides deployment, consulting, training and integration services. We are Tel: +44 20 7014 3480 experts in reducing False Positive rates and helping improve rates of Payment STP. Fax: +44 20 7061 6478 [email protected] visit www.Accuitysolutions.com/bankingtech to sign up for a free trial of any of our industry-leading AccuitySolutions.com/bankingtech solutions.

cleAr2PAy

clear2Pay is a payments modernisation company that actively supports global financial institutions to meet their payments unification goals through its pure SOA Open Payment Framework (OPF). The company Clear2Pay NV SA facilitates financial organisations in their provision of payments services across the entire value and process Schaliënhoevedreef 20A chain: Card, ACH, Branch, Bulk, High Care and International Payments. Clear2Pay also offers solutions and 2800 Mechelen, Belgium services such as e-Banking, the Open Test Platform, ChargeBack, Consultancy and Training. Clients include Tel: +32 15 79 52 00 financial institutions such as ING, Banco Santander, Crédit Agricole, VISA, MasterCard, BNP Paribas, The Fax: +32 15 79 52 01 Federal Reserve, NETS (Denmark), The People Bank of China (PBOC), Rabobank, The Co-operative Financial Jean de Crane, GM EMEA Services and Commonwealth Bank. Clear2Pay operates out of 14 countries and employs over 650 staff. In Email: [email protected] 2011 the company won the XCelent Customer Base 2010 award. www.clear2pay.com For more information, please visit www.clear2pay.com.

fiDessA GrouP

Exceptional trading, investment and information solutions for the world’s financial community. 85% of the world’s premier financial institutions trust Fidessa to provide them with their multi-asset trading and investment infrastructure, their market data and analysis, and their decision making and workflow Fidessa technology. $10 trillion worth of transactions flow across our global connectivity network each year. We One Old Jewry offer unique access to the world’s largest and most valuable trading community of buy-side and sell-side London professionals, from global institutions and investment banks to boutique brokers and niche hedge funds. EC2R 8DN A global business with scale, resilience and expertise, we’ve delivered around 30% compound growth Tel:+44 (0)20 7105 1000 since our stock market listing in 1997 and we’re recognised as the thought leader in our space. We set the Fax:+44 (0)20 7105 1001 benchmark with our unrivalled set of mission-critical products and services and, uniquely, serve both the buy- Email: [email protected] side and sell-side communities. Ongoing investment in our leading-edge solutions ensures Fidessa remains Web: www.fidessa.com the industry’s number one choice.

orc softwAre

About orc software Orc software (SSE: ORC) is the leading global provider of powerful solutions for the worldwide financial industry in the critical areas of advanced trading and low latency connectivity. Orc’s customers include leading banks, trading and market-making firms, exchanges, brokerage houses, institutional investors and hedge funds. Orc Software Americas: +1 312 327 8555 solution Description Asia Pacific: +852 2167 1950 Orc Trading and Orc Connect provide the tools for making the best trading and connectivity decisions with EMEA: +46 8 506 477 00 strong analytics, unmatched market access, powerful automated trading functionality, high performance Email: [email protected] futures and options trading capabilities, ultra-low latency and risk management. Web: www.orcsoftware.com Advanced trading solutions orc trading applications orc connect applications ■ Orc Trading for algorithmic trading ■ Orc CameronFIX for FIX to FIX routing ■ Orc Trading for arbitrage ■ Orc CameronFIX for FIX integration ■ Orc Trading for market making ■ Orc Trading for risk management ■ Orc Trading for warrants market making ■ Orc Trading for volatility trading

PeterevAns

peterevans is a leading independent provider of front to back office solutions for the financial services sector. Clearly focused on the securities and investment market petervans has more than 23 years of experience of New Broad Street House providing solutions to this sector. 35 New Broad Street xanite, peterevans new suite of products, offers a configurable, fully integrated, browser based, comprehensive London front to back solution that can be either deployed as a single application or integrated as components into United Kingdom your existing platform. Each of the xanite modules can de delivered via an ASP or self-hosted. Covering wealth EC2M 1NH management, custody, corporate actions, clearing and settlement, private client and on-line stock broking with full Email: [email protected] operational and administrative support for the front, middle and back office. xanite gives full but controlled access Tel: +44 (0) 2920 402200 to clients, portfolio, fund and relationship managers, brokers, middle and back office staff – on line anywhere in the Web: www.peterevans.com world and provides a modern and flexible platform for expanding future business and revenues.

www.bankingtech.com contActs: neil hartley on +44 (0) 203 377 5385 or leon thomson on +44 (0) 203 377 3493 or email: [email protected] email: [email protected] smArtstreAm technoloGies smartstream technologies delivers operational advantage to clients through enterprise-wide, real-time Transaction Lifecycle Management (TLM®) solutions that automate, track and control financial transactions SmartStream Technologies and processes within and beyond the enterprise. St Helen’s Built on SmartStream’s TLM Enterprise Control Architecture, TLM solutions provide greater transaction 1 Undershaft visibility to create exceptions-based operations capable of automating complex and high volume transaction London flows. Operational risk and cost is reduced, while customer service levels are improved. EC3A 8EE SmartStream is owned by Dubai International Financial Centre (DIFC) and has global operations United Kingdom supporting over 1,000 clients, including more than 75 of the world’s top 100 banks. Tel: +44 (0)20 7898 0600 Email: marketing@ smartstream-stp.com Web: www.smartstream-stp.com sunGArD

About sunGard With annual revenue of $5 billion, SunGard is a global leader in software and processing solutions for financial Email: [email protected] services, higher education and the public sector. Visit SunGard at www.sungard.com Tel: +44 (0)208 081 2779 Fax: +44 (0)208 081 2001 Adaptiv SunGard’s Adaptiv provides enterprise-wide credit and market risk management and operations solutions for financial services institutions. Adaptiv assists institutions of varying size and complexity to deploy technology to meet both internal and regulatory requirements for risk management and operational control. Adaptiv helps financial services institutions from the banking, hedge fund, asset management, insurance and corporate sectors with its deep understanding of risk management and operational processes. www.sungard.com/ adaptiv. front Arena A trading solution serving a range of financial institutions, SunGard’s Front Arena solution provides straight- through processing by integrating sales and distribution functions, trading capabilities and risk management. Institutional asset managers and brokers, traders, and market makers use Front Arena to trade equities, fixed- income, interest rate derivatives, and credit. For more information, visit www.sungard.com/frontarena securities finance Around the world, $11 trillion in securities financing is managed on SunGard’s proven solutions for international and U.S. domestic securities lending and repo for over 250 clients. Through our Loanet, Global One, Martini and Astec Analytics products and services, we provide comprehensive business solutions and information with worldwide reach for equities or fixed income securities financing Contact: securitiesfinance@ sungard.com call a sunGard expert today: 0044 (0)208 081 2779 tieto tieto is an IT service company providing IT, R&D and consulting services. With approximately 16 000 experts, we are among the leading IT service companies in Northern Europe and the global leader in selected segments. We specialize in areas where we have the deepest understanding of our customers’ businesses and needs. Our superior customer centricity and Nordic expertise set us apart from our competitors. Tieto Tieto Financial Services offers services, solutions and products to financial institutions throughout Europe. Kutojantie 6-8 Our customers include major banks and financial institutions that have chosen us for our capability to take 02630 Espoo total responsibility for any assignment. Finland We enable Financial Institutions to utilize their business potential by combining our technology skills and Tel: +3582072010 deep financial industry knowledge with advanced Nordic customer behavior. Working with Tieto you get a Fax: +358207263025 reliable, committed long-term partner that helps you to industrialize your day-to-day IT-operations and get the [email protected] most out of your IT investments. www.tieto.com/financialservices tcs finAnciAl solutions tcs financial solutions, a strategic business unit of Tata Consultancy Services, enables transformation in TCS Financial Solutions financial services through a holistic suite of solutions for firms in banking, capital markets and insurance, and Web: www.tcs.com diversified financial institutions. Each solution in the TCSα B NCS family runs as a scalable and robust service, integrated with existing enterprise infrastructures and technology architectures. Our mission is to provide best of breed solutions that drive growth, reduce costs, mitigate risk and offer faster speed to market for 240+ institutions in over 80 countries. TCS BαNCS is an integrated financial services platform. Its embedded transformation intelligence enables flexible, open and collaborative deployment and distribution of financial products and services. TCS BαNCS aspires to be better than established benchmarks, which is why we’ve embedded an Alpha (“α”) consciously within our brand, to remind ourselves of the superior returns that we strive to deliver. Our ability to foster rapid time-to-market with new products allows organisations to transform themselves into nimble competitors with scalable offerings. Our Co-Innovation Network is a true partnership for sharing best practices and innovation, and our ‘Experience Certainty’ mindset ensures the brightest of futures for all our customers. For more information, visit www.tcs.com/bancs or contact us at [email protected]

About tata consultancy services Tata Consultancy Services is an IT services, business solutions and outsourcing organisation with over 143,000 IT consultants located across the world delivering real results to global businesses through its unique Global Network Delivery ModelTM.

www.bankingtech.com From the Archive OUT OF OFFICE APRIL 2012 10 Years Nanny State Announcement ago Euroclear outlines central CSD strategy of the Month ... can banks service corporate treasury needs? ... database technologies “The nation’s 31 million credit cardholders can expect to start seeing a new type of hampering information use ... GSTPA set credit card statement land on their doormat for the rst time,” the UK Cards Association to go live “before Omgeo” ... excitedly tells us. The new annual statement, which it has developed in partnership with the Department for Business, Innovation and Skills, “will help customers see at a glance how they have used their credit card over the previous 12 months, as well as any fees and costs incurred”. Melanie Johnson, Chair of The UK Cards Association says: “Annual credit card 15 statements will help empower customers by giving a clear view of how they’ve each managed their plastic over the past year. By clearly setting out costs and charges this Years industry initiative could help customers get a better deal either by being more savvy about how they use their current card, or by changing to another account that’s a ago better t.” Or by starting to read the monthly statements, or going on-line and using one of the Few believe that internet technologies many tools available. Or, just maybe, by paying a little bit more attention? BT will affect the trading fl oor ... call centre recording poses storage headache for banks ... enterprise risk looks attractive for fi nancial services fi rms ... French exchanges plan to Oddest (morally sound) Twitter dominate the single currency world ... Follower of the Month

Twitter users are used to the emails that say “ShyNatasha1345 is now following 20 you”, and some may be well grateful for the attention, even when they are Years corporate accounts intermittently ago keeping subscribers up-to-date with the goings on in the ntech world. Italian payments systems lambasted More mystifying are the legit-sounding by Bank of Italy ... Paris Bourse buys people with no discernable reason to automated system from NYSE ... Cedel and follow such things. @BankingTechno Clearstream agree on distribution ... data (someone had registered the more users query information providers’ charges obvious BankingTech, okay?) is currently being followed by Allowdale Herefords – ... Bank’s EJV bond service struggling to “Pedigree Hereford Cattle Breeders.” make a mark ... housing market gloom We’ll try to nd out more, especially as Ye Ed. Has just told us that Hereford beef is taking a toll on IT spend ... particularly delicious. The UK Bribery Act prevents us from repeating what he suggested.BT Disclaimer of the Month “Certain statements contained in this press release are forward-looking statements. 25 These statements may be identi ed by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” Years “plan,” “potential,” “predict,” “should” or “will” or other similar terminology. We have based ago these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections NatWest extends in-branch share dealing are reasonable, such forward looking statements are only predictions and involve known ... Swift counts cost of delays to revamped and unknown risks and uncertainties, many of which are beyond our control. These and services ... PEPs and pensions: banks offering other important factors may cause our actual results, performance or achievements to differ home services ... Shearson Lehman builds materially from any future results, performance or achievements expressed or implied by new London dealing room in Broadgate ... these forward-looking statements.” BT Can technology pay for itself?

48 I www.bankingtech.com