banking technology www.bankingtech.com SEPTEMBER 2011 SEPTEMBER 2011 Risk: the big picture Three years on, can collaboration stop another financial crisis? Beyond the Fringe The Standards Forum and Innotribe events are stepping out of the shadow of Sibos. Interview: State Street in the cloud CIO Chris Perretta outlines how State Street plans to transform itself with cloud computing. Let's work together Post-trade interoperability efforts in clearing and settlement are coming to a head. Join the social club Why social media is all the rage in financial services at the moment. Contents September 2011 In this issue 22 34 27 18 4 news 27 Beyond the Fringe the Standards Forum and Innotribe strands of 8 news Analysis Swift’s annual Sibos gathering are starting to ■ Heather mcKenzie: cheque row highlights emerge from the shadow of the main conference banks’ rift with public and become year-round events in their own right. ■ banks could improve roe says Ibm 30 Roundtable: Moving beyond messages 12 By the numbers the ISO 20022 standard and XmL provide ■ Financial markets to spend $90 billion on It business benefits and opportunities beyond The best view ■ FSA pay rules will weaken UK banking sector mere standardisation according to a panel of With Wallstreet Cash Management you can sit back and see ■ iphone users most keen on mobile banking experienced practitioners brought together by ■ Hiring slowdown hits financial services in London Swift and Banking Technology. a real-time global view of all your cash positions. ■ Firms fail to focus on projects 34 Interview: Chris Perretta, state street 14 Cover Focus: Risk – the Big Picture State Street’s chief information officer explains three years after the collapse of Lehman brothers, why a wholesale adoption of cloud computing will what lessons have been learned and how has the lead to a transformation in the way the bank does relationship between risk and technology changed? business. 18 Let’s work together 36 Appointments efforts to create interoperability between clearing and settlement venues are coming to a head, 38 Products & services bringing change and opportunity. ■ Vendor announcements, enhancements and innovations 22 Hands up to join the social club Increasing use of social media by financial 42 Industry columns & comments institutions is changing the way that they interact with customers and organise themselves. 48 out of office WALLSTREET CASH MANAGEMENT The global cash management infrastructure WWW.WALLSTREETSYSTEMS.COM | INFO@ WALLSTREETSYSTEMS.COM www.bankingtech.com I 1 Contents September 2011 In this issue 22 34 27 18 4 news 27 Beyond the Fringe the Standards Forum and Innotribe strands of 8 news Analysis Swift’s annual Sibos gathering are starting to ■ Heather mcKenzie: cheque row highlights emerge from the shadow of the main conference banks’ rift with public and become year-round events in their own right. ■ banks could improve roe says Ibm 30 Roundtable: Moving beyond messages 12 By the numbers the ISO 20022 standard and XmL provide ■ Financial markets to spend $90 billion on It business benefits and opportunities beyond ■ FSA pay rules will weaken UK banking sector mere standardisation according to a panel of ■ iphone users most keen on mobile banking experienced practitioners brought together by ■ Hiring slowdown hits financial services in London Swift and Banking Technology. ■ Firms fail to focus on projects 34 Interview: Chris Perretta, state street 14 Cover Focus: Risk – the Big Picture State Street’s chief information officer explains three years after the collapse of Lehman brothers, why a wholesale adoption of cloud computing will what lessons have been learned and how has the lead to a transformation in the way the bank does relationship between risk and technology changed? business. 18 Let’s work together 36 Appointments efforts to create interoperability between clearing and settlement venues are coming to a head, 38 Products & services bringing change and opportunity. ■ Vendor announcements, enhancements and innovations 22 Hands up to join the social club Increasing use of social media by financial 42 Industry columns & comments institutions is changing the way that they interact with customers and organise themselves. 48 out of office www.bankingtech.com I 1 eDITORIAL COMMeNT September 2011 editor David Bannister +44 207 017 4019 [email protected] Ch-ch-ch-changes Deputy editor Neil Ainger Where shall we start? It’s three years since the collapse of Lehman +44 203 377 3498 Brothers changed the world … It’s 10 years since the terrorist [email protected] attack on the World Trade Center changed the world … or it’s 22 Publishing Director Brian Meggs years since the fall of the Berlin Wall changed the world. +44 207 017 5004 It’s only a few months since the phrase ‘Arab Spring’ began [email protected] falling from the lips of optimistic Westerners who saw in the desire for freedom of some oppressed citizens a validation of their own Regular Contributors David Adams, Sherree DeCovny, Alison Ebbage, Tom Groenfeldt, outlook and assumptions. It’ll certainly change the world though. Eugene Grygo, Heather McKenzie, Nicholas that’s the trouble with the world: it keeps changing, or letting itself be changed. Pratt, Kristina West especially lately – fifty years of relative stability and peace since 1945 and people start getting complacent, eh? Designer Kosh Naran One thing is certain: it’s all about to change again. Don’t ask me how – it doesn’t Press Releases Send relevant releases to really matter, so long as you are equipped to deal with change, which a surprising [email protected] number of people and institutions seem singularly ill-equipped to do. What does it mean to be equipped to deal with change, though? the only sensible Group Sales Manager Neil Hartley, answer I can think of is being able to change yourself: adapt and survive. I know, it’s +44 203 377 5385 [email protected] Darwinism, of a sort, but it does have the distinct advantage of being proven to work. Darwin’s theory is often summarised as the survival of the fittest, which some people Senior Sales executive Leon Thomson, object to on the grounds that it is not only the fittest that survive. be that as it may, it +44 203 377 3493 is certainly about survival of characteristics, and the elimination of those that have no [email protected] function. events Manager So, my question is this: are banks a distinct species that can adapt and survive, or is Gemma Healy, banking merely a societal characteristic that no longer has a function? BT +44 207 017 6752 [email protected] David Bannister, editor Marketing and Circulation Savinder Degun, +44 207 017 4750 [email protected] Its déjà vu all over again Subscriptions and Renewals Mike Ellicot +44 207 017 75392 With the plunging stock markets over the summer, the rising price Email: [email protected] of gold and many banks reporting losses and staff redundancies, I’ve had a strong sense of déjà vu all over again, as the famous For Reprints and Web Publishing Rights baseball coach Yogi Berra once said. What took me fully back to the please contact Leon Thomson on future was when France, Spain and other european countries extended +44 203 377 3493 or imposed short selling bans in August. Are we merely back to 2008 ©2011 Banking Technology again, I asked myself, with an impending credit crunch 2.0 looming on All rights reserved; no part of this publication may the horizon and the upcoming Sibos show in toronto, Canada, perhaps be reproduced, stored in a retrieval system, or replicating the panicky atmosphere of the Vienna show? transmitted in any form or by any means, electrical, For all our sakes let’s hope not. but with talk of a tobin tax being revived yet again as 1-2 Bolt Court mechanical, photocopying, recording, or otherwise Fleet Street without the prior written permission of the publisher. a possible way for states to pay off the sovereign debt that some of them inherited from London bailing out banks, and others ran up by being profligate, the signs don’t look good.p resident EC4A 3DQ Banking Technology is published 10 times a year Sarkozy of France and Germany’s Chancellor merkel did little to alleviate the panic when by Informa Business Information, a trading division they met in August and rejected the idea of eurobonds to help stabilise the eurozone debt of Informa UK Ltd, 1-2 Bolt Court, Fleet Street, London EC4A 3DQ, UK. crisis or of increasing the €440 billion rescue fund. much of the talk about the Single euro payments Area at Sibos 2011, therefore, may well be prefaced by the caveat if there is a Printer: Wyndeham Grange, Southwick, UK. euro. Other interesting news on the SepA-front concerns VocaLink’s decision not to focus on this for growth any more, but instead on immediate payments (see news page 4). I look Subscription enquiries: Customer Service Dept, forward to talking about this and many other developments at them etro Convention Centre Informa UK Ltd, Sheepen Place, Colchester, CO3 3LP. Tel: +44 (0)207 017 5532, Fax: +44 (0)20 in toronto on this month as part of the Daily News at Sibos team. 7017 7860, Email: [email protected] the silver lining if there is to be a second crunch is that this time most banks Annual Subscription: UK £655, Europe €815, US/ – except the so-called ‘zombie banks’ being artificially kept alive by governments – rest of world $1175. theoretically have more liquidity and should be better able to fight off the ill winds of Member of the Audit Bureau of Circulation a downturn.