If a technology supplier comes to your organisation and bestows the virtues of IP services, the chances are that the first benefit they will cite is the savings on voice calls across your business. And rightly so. Convergence of voice and data networks is a significant simplification of how you pay for your networked IT services and is an important technological advance. But even today, IP technology has far more potential than that. Voice is just the beginning. The real difference to your enterprise is made when you use IP to tackle some of your biggest business challenges.
Take Business Continuity and Disaster Recovery services, for example. If your organisation operates on one global IP network, you have the potential to back-up your data to servers located anywhere on the network, wherever they are geographically located across the world. Employees who are unable to get to the office in the event of disaster can also be given remote access, meaning that they can work from a whole host of alternative locations via a range of fixed or wireless devices.
Unfortunately for most global financial institutions today, this is not currently the reality as rather than having one IP network, they operate several IT systems crudely operating in individual silos. This structure divides the parts of the bank and their ability to share data and functionality whether at the front or back office. It also means that back-up has to be done at a local level, requiring costly investment in multiple business continuity plans across their enterprise at each geographical location. For users trying to access their systems remotely, this arrangement also doesn’t guarantee that they will be able to get to the applications or data that they require to do their job.
The flexibility of IP also revolutionises interaction on the trading floor. “Value-added services hosted within the network provide supporting information and applications and enable multi-channel communication,” says Peter Richards of BT Financial Services Marketing.
“This effectively provides a collaborative trading environment, linking customers with trading partners and clients, generating a new model of network-centric on-demand trading services. The speed of collaboration on the network and the data that can be monitored can also give an investment bank market edge through algorhythmic trading, where trades need to be processed within tenths of a second.”
Algorithmic trading
The demand for capabilities such as algorithmic and program trading is driving the IP network-centric model in IT services. Algorithmic trading is all about setting up a program to look for minute windows of opportunity for executing certain trades based on appropriate market conditions. The ability to make that trade quickly enough to be sure of the desired price is very much determined by the speed of the network in responding. Any latency or lag in delivering the instruction can mean an opportunity missed, potentially to a competitor who has their network in better shape.
In some cases, network services providers are overcoming this problem by physically placing their systems hosting customer trading applications right next to several of the market data and execution venues, while linked back to the IP network. BT Radianz, for example, recently launched one such service called Radianz Proximity in northern New Jersey and is planning to launch more in other global locations later this year. The service gives ultra-low latency connectivity to major execution venues located in Manhattan, including the NYSE, AMEX, Nasdaq, and INET for anyone connected to the BT Radianz shared platform.
“At a recent industry DMA panel hosted by BT Radianz,” points out Rick Snape from BT Radianz, “nearly half of all attendees indicated that they are planning to host trading applications closer to the execution venues in order to reduce latency.”
Consumer experience
IP technology is making inroads and bringing benefits across the whole of the financial services industry. For large global financial enterprises with retail customers, IP technology can provide the basis to improve how they serve their customers. By running retail branches, with the electronic and telephone channels on one network, the consumer experience can be consistent and seamless no matter how customers choose to interact with their bank. This is because customer data can be updated and shared by bank staff in real time wherever they work across the organisation. Also, by capturing information about every customer interaction and sharing it between channels more effectively, banks can exploit future contact with the customer as an opportunity to sell more, reduce costs and increase revenues.
Cross-pollination
IP technology can also assist in more cross-pollination between channels. Where there is a dependency on scarce people resources, providing real-time access to qualified advisers in wealth management or mortgages is critical in driving sales performance. One example of this is the trialling of collaborative video-conferencing between the contact centre and branches. One recent European survey by Forrester found that 30% of customers chose the branch for their most recent financial purchase because they wanted to speak to someone in person. Yet most organisations that operate a large global branch network can’t guarantee that a specialist financial adviser on certain products will be available at all times in all branches. Collaborative video-conferencing enables financial advisers with the relevant knowledge base to be streamed instantly straight into the branch on demand.
“What we have seen with BT’s own ‘Remote Advisor’ video-conferencing solution is that consumers quickly feel comfortable talking to an adviser in confidence, particularly given the high-quality voice and video that we can deliver to the branch across the bank’s own IP network,” explains Peter Richards. “What’s more, customers get a positive customer-service experience when they visit the branch with access to expertise ‘on-tap’.”
Whichever way an organisation applies IP technology across financial services, the widespread discussion about such a critical function as voice services being delivered using VoIP is actually an indication that IP technology has come of age.
Global banks’ ability to exploit the benefits of IP further than that will determine how quickly they see return on investment from their IT operations in the long term.
