IT architecture is unusual in that the older it gets, the more structurally sound it is likely to be. The global head of IT architecture at HSBC securities services is Alasdair Anderson, whose team is responsible for building and monetising the giant infrastructure that allows HSBC to process enormous levels of data.
“Our business is all about economies of scale,” he says. “We are an outsourcer, so we have to be able to integrate our clients' data and pass it back to them as efficiently as possible. We have been doing buy-side outsourcing for a decade and we have just moved into the sell side. The way we grow our business and margin is through economies of scale so we look at technologies that allow us to do that.”
Riding wave of change
Changes in the technology world are dramatically altering the way in which data is stored and retrieved, creating an explosion in the world of IT. The big data models used by Google, Facebook and other second-generation dot-coms, are accessible via the open-source Apache Hadoop distributed data architectural model, which challenges the existing models in database and data warehousing by distributing data across scores of low-cost servers.
HSBC is migrating into this environment for competitive advantage, and having spent 18 months proving the technology is capable of great things, it is ready to test the technology with clients.
"We believe that big data means big profits,” says Mr Anderson. “We do believe that you can make money with these kinds of platforms. They could offer us a competitive advantage in the market and allow us to leverage the core strength of HSBC, which is our presence globally, with the breadth of product that we offer. So we are consolidating our data on these platforms to make our analytics more holistic. So in securities services we can offer clients the capability to run analytics across their portfolios to stress-test against changes in interest rates, or what-if modelling on the impact of taking particular assets into a portfolio.”
The division in which Mr Anderson works has about 700 staff globally and within that his team – many brought up through the ranks by the bank, others taken from innovators such as eBay – are some of the most experienced professionals in the world of IT.
"Most of my guys are seasoned technologists, they tend to have 10 years as a programmer or developer and have matured into a management role. They do get into a position where they are able to influence other technologists and that responsibility itself keeps very bright people interested," he says.
Balancing act
In the short term, the team is focused on delivery, ensuring that the technology meets the demands of the business. A consistent short-term challenge is the delivery of client-driven solutions to a set timescale. 'Cost is huge challenge. We work on the fundamentals of how to make things better, how to shorten time to market, how to improve the quality of our product,' says Mr Anderson.
Evolution of the bank's legacy architecture is also pertinent to its short-term goals but requires a strategic long-term approach. "People use the word 'legacy' in a negative way, but you have a legacy because you have built a successful business upon that technology, not because it did not work. It is incumbent upon us to evolve that technology, with some of the new technologies I have mentioned, taking care of the plumbing behind the screen."
To ensure that the platforms it develops are as attuned to the needs of clients as possible, HSBC has invested heavily in communications technologies that allow staff to operate in a very interactive manner.
"Our environment allows business users to see progress and allows our developers to pick their brains,” says Mr Anderson. “We do show and tells, stand-ups, demos, so we can make any adjustments that we need to. That allows us to improve our reactiveness and the quality of what we are doing, while meeting expectations. We are keen advocates of agile delivery techniques."