The implications of six key technology trends in financial service institutions
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The implications of six key technology trends in financial service institutions Presentation Transcript

  • 1. Larry RyanThe implications of six key technology trends in financial serviceinstitutions© Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 2. The implications of sixkey technologytrends in financialservice institutions i i tit tiLarry RyanJune 7, 2012 7© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 3. Increasing pressure on financial firms Customer experience: agility to retain and grow market share Shareholder Demand: cost control & operational efficiency Increasing regulatory scrutiny: I i l t ti greater levels of transparency Sop st c te cyber tt c s Sophisticated cybe attacks: secure infrastructure, data & apps Financial System Soundness: Capital, quality, liquidity, & risk3 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 4. Increasing pressure on financial firms Top Bank Efficiency Raio and ROE Customer experience: 100 agility to retain and grow market share 80 Shareholder Demand: cost control & operational efficiency 60 Increasing regulatory scrutiny: I i l t ti 40 greater levels of transparency 20 Sop st c te cyber tt c s Sophisticated cybe attacks: 0 secure infrastructure, data & apps ‐20 Financial System Soundness: Capital, quality, liquidity, & risk Efficiency Ratio ROE Source: www.bankregdata.com (2011Q4 Data)4 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 5. Technologies impacting financial services Focus on customer experience and agility to retain and grow market share Cloud • Market place for Shared agile services Shareholder Demand for cost and S it Security • Pervasive end-to-end operational efficiency g Big Data Increasing regulatory scrutiny requires • Derive meaning from the digital world greater levels of transparency Social Media • The digital culture Sophisticated cyber attacks require stronger secure infrastructure Mobility • Anywhere computing: markets, apps, payments Improve soundness by increasing capital and improving liquidity di i li idit BYOD • Consumerization of IT5 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 6. The digital life2020 4B people online, 31B connected d i2020: l li t d devices, 25M apps Consumer CHANNEL SERVICES CHANNELS USER SECURITY SERVICES (SSO, Authorization and Access Control) CHANNEL INTEGRATION Professional SERVICE SECURITY (Authentication, Authorization and Access Control) BUSINESS SERVICES CORE BANKING OPERATIONS WEALTH CORPORATE MANAGEMENT INFORMATION EXTERNAL ENTERPRISE MANAGEMENT & INTERFACES SYSTEMS RETAIL TRADING DATA SERVICES RISK MANAGEMENT TREASURY & CASH & COMPLIANCE MANAGEMENT PLATFORM SECURITY (Authentication, Authorization and Access Control) PLATFORMS INFRASTUCTURE SECURITY SERVICE SECURITY (Authentication, Authorisation and Access Control) IT INFRASTRUCURE HYBRID DELIVERY CLOUD Mobile Datacenter6 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Source: IDC, ICT Outlook: Recovering Into a New World, #DR2010 GS2 JG, March 2010
  • 7. The digital life: data2020 4B people online, 31B connected d i2020: l li t d devices, 25M apps Transactions Payments i l i Social Interactions Photos Personal Movies/Videos Exhaust Data Music Maps M Books Scientific Data Life Footprint Consumer Magazines Professional Biological CHANNEL SERVICES CHANNELS Newspapers USER SECURITY SERVICES (SSO, Authorization and Access Control) CHANNEL INTEGRATION SERVICE SECURITY (Authentication, Authorization and Access Control) BUSINESS SERVICES CORE BANKING OPERATIONS WEALTH CORPORATE MANAGEMENT Environmental INFORMATION EXTERNAL ENTERPRISE MANAGEMENT & INTERFACES SYSTEMS RETAIL TRADING DATA SERVICES Art RISK MANAGEMENT TREASURY & CASH & COMPLIANCE MANAGEMENT PLATFORM SECURITY (Authentication, Authorization and Access Control) PLATFORMS INFRASTUCTURE SECURITY SERVICE SECURITY (Authentication, Authorisation and Access Control) IT INFRASTRUCURE HYBRID DELIVERY CLOUD Public Records Mobile Datacenter7 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Source: IDC, ICT Outlook: Recovering Into a New World, #DR2010 GS2 JG, March 2010
  • 8. 01 Cloud© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 9. Cloud computing types for financial service firms Core attributes Elastic Pay-per- Pay-per-use Banker Networked Shared Trusted external On- On-demand service providers Markets/Communities Markets/Communities Software Services (SaaS) SaaS) Platform Services (PaaS) (PaaS) Infrastructure Services (IaaS) (IaaS) How is it used? What is delivered?9 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 10. The financial service marketplace evolves NASDAQ Market Replay Expanding into cloud services Attacking legacy business models b i d lLegacy Services10 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. “Cloud” Services
  • 11. Value of Cloud in FSI Top challenges faced by banks Manage recovery Grow customer base Handle host of new & changed regulations Absorb acquisitions Three key drivers for Cloud adoption Cost reduction Speed to deliver Agility Ovverall cost reduction through – With technology innovation becoming more of an Banks looking at Agility specifically with reference • SaaS - Avoidance of infrastructure cost enabler of new banking products and channel to IaaS • PaaS - Quicker development cycles innovations as well as increased regulatory Large-tier banks &"megabanks" have extremely changes expected, a banks ability to quickly adapt large sets of data and very high transaction • IaaS - Increasing utilization of infrastructure components reducing total infrastructure needs to the changing landscape or become a market volumes in solution areas that are load-intensive overall innovator by leveraging technology is a distinct y g g gy and read-intensive such as risk management, read intensive, management competitive advantage trading algorithms, pricing, quantitative analysis Enable banks to increase control over IT infrastructure with regard to fixed vs. variable Cloud computing can offer faster initial and payments processing costs and opex vs. capex implementations by eliminating the need for Megabanks are adopting or considering private lengthy hardware acquisition cycles or capital cloud (internal to bank) IaaS to reduce overall Flexibility and control over costs to react to what is investment project reviews infrastructure cost through consolidation of becoming an increasingly volatile economic condition diti servers, servers data centers and higher utilization of their server footprint Source: Market Insight: The Impact of Cloud Computing on Vendors in Banking – Gartner June 201011 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 12. Key take-aways1. Cloud is an emerging disruptive force; a strategic transformation and journey2. Cloud decreases time to market, increases agility, reduces cost, and enables new business models3.3 Assess what assets can move to cloud and start with an internal IaaS as a foundation towards a service ecosystem4. HP recommends a hybrid delivery framework to integrate all sources and automate t t12 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 13. 02 Security© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 14. Top 5 global risks in terms of likelihood Global Risks 2012 Seventh Edition, World Economic Forum, http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2012.pdf1414 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 15. The threat• SWIFT: The operator of the world’s largest messaging network for financialtransactions said its communications systems are facing record levels of aggression y g ggfrom cyber hackers and attackers.*• 38% of financial services respondents say they have been hit by cyber crime of onesort or another. **• Ponemon Institute found that >1 successful attack/week/company (44%increase).*** * http://www.securitiestechnologymonitor.com/news/swift-terrorism-at-new-peak-shah-30120-1.html?zkPrintable=true p // gy / / p ** Cybercrime: protecting against the growing threat, Global Economic Crime Survey, Nov 2011, PWC. *** Second Annual Cost of Cyber Crime Study, August 2011, Ponemon Institue.15 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 16. Example breaches• Global Banks• Community Bank• Bank Outsourcer• Exchange• Payment Networks16 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 17. HP’s framework Information security management Security Security Compliance and Threat & Risk Security Training and Supplier Policy and Risk Performance Audit Management Architecture Awareness Management Management Security operations Risk Accreditation & Identity and Monitoring and Universal Log Incident Security Change Assessment and Acceptance Access Alerting Management Management Control Mitigation Testing Management Data center Network Application End-point Data & Content Security Securing Data in Motion Securing Data in Use Securing Data at Rest Business Recovery & IDS/IPS Application Delivery Mobile Security Continuity Services Data C D Center S Security i Network S N k Security i Application Security A li i S i A t E d i tS it Asset, Endpoint Security17 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 18. Key takeaways• Security and risk management alignment• Security and IT operations integration• Situational awareness / rapid response• Actively and continuously monitor and evolve18 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 19. 03 Big Data management© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 20. Definition Social networkingUploading video In Germany Researching in in the US China Of the 6.9 billion people in the world, Chatting in India only 2.3 billion are online. Blogging in Brazil 2020 25 million apps http://www.internetworldstats.com/stats.htm 4 billion people online 31 billion connected devices Speed 450 billion online interactions, per day 1.3 trillion tags/sensors Complexity 50 t illi gigabytes of d t created trillion i b t f data t d 20 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 21. Big Data valuable to financial services21 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. “Big Data: The next frontier for innovation, competition, and Productivity, McKinsey Global Institute, Presented at SIBOS, September 20, 2011
  • 22. What are banks doing?•Track behaviour "Our top business•Adjust risk exposure Adjust challenges are optimizing•Correlate with transaction customer relationships, optimizing financial functions,•Understand Reducing business risk and•Predict and influence P di t d i fl ensuring regulatory compliance. Our prioritization is around our customer and then revenue / profits " profits. – C Level Executive22 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 23. Benefits for banks•Customer behaviour•Multichannel Customer Interaction Multichannel•Product Innovation•Risk management and compliance•Strategy and brand marketing St t db d k ti•Archiving & eDiscovery•Information management23 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 24. HP’s view: Big Data – The new normal Consumer generated Listen Unstructured Integrate all valuable Real time – created and assessed Sources of Understand customer data Create an integrated g – From “empower the knowledge worker” analytic framework to to “mobilize the consumer” enable Analytics for the Masses – From “time to information” to “time to activity” activity Engage Embed the analytical – From “implicit understanding of consumer insights closer the point- sentiment” to “explicit understanding” of-interaction with the customer24 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 25. Key takeawaysNew architectureCreates transparencyEnables experimentation and analysisValue creation and business modelsLaw f bigL of bi numbersbData Policy25 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 26. 04 Social media© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 27. Social media2727 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 28. Social networks demographics Population/Registered Users 1,600,000,000 1,400,000,000 1 400 000 000 1,200,000,000 1,000,000,000 800,000,000 600,000,000 400,000,000 200,000,000 02828 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 29. Corporates embracing social media29 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. Source: “How social technologies are extending the organization”, McKinsey Quarterly, November, 2011, http://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/How_social_technologies_are_extending_the_organiz ation_2888
  • 30. Examples in Financial Services30 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 31. Virtual currencies & loyalty programs Frequent Flyer Programs3131 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 32. Key takeaways• Reach customers• Manage brand• Drive campaigns• Learn from customers• Govern usage appropriately3232 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 33. 05 Mobility© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 34. Mobility becomes part of life for everyone... A d th scale i enormous And the l is•Instant connections, communication & collaboration is changing people’s behavior•Access to on line services is part of daily activity – Mobility First is quickly becoming thebusiness top priority34 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 35. Online and mobile banking transactions continue to increase rapidly US Self-Service Banking Transactions by Channel (In Billions) 100 ATM (CAGR = 0.8%) 80 Online (CAGR = 20.1%) 20 1%) 60 Mobile 14.0 3.0 9.4 (CAGR = 84.8%) 1.2 5.6 40 35.0 23.3 26.8 30.0 33.3 20 5.6 7.3 9.1 11.8 15.3 18.6 14.0 14.2 14.3 14.4 14.5 14.6 14.6 14.7 14.8 15.0 15.1 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: TowerGroup 35 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.35
  • 36. US branch transactions are declining (2010–14P) Transactions (in billions) 15 14.70 14 70 14.11 14 13.69 13 69 13.28 13 12.88 12 2010 2011 2012 2013 2014 Source: TowerGroup36 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 37. Mobile Payments Landscape Physical Location / POS Online MobileP2P Transfers(Domestic andInternational)Payments toMerchants37 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. * Updated version of table from Edgar, Dunn & Company Slide
  • 38. Example Mobile Applications38 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. 38
  • 39. Hp Enterprise Mobility Services framework Mobility Apps Platform Unified Communication• App Virtualization • Voice Transformation• Desktop Virtualization • Virtual Workplace• Mobile Apps – Native, Web • Unified Messaging Mobility Device Management Mobility Protection • Network Protection• Infrastructure Mgt • Cloud Protection• Mobile Device Mgmt • Mobile Data Protection PROSUMER • Mobile Access Protection Mobile Data Mobile Applications • Performance Engineering• Storage Consulting • App Transformation• Mobile Data Trans. • Mobile App Management• Enterprise Data Sharing • Windows 7/8 Migration• Analytics/BI GRC - MoC Enterprise Connectivity • Network Transformation• Education Services (UC) • Voice over Wi-Fi• Education Services (Mobility) • Fixed M bil C Fi d Mobile Convergence• Mobility Policies (BYOD) Collaboration • Cloud Services Integration •Search/ Information •Document Management • Social Collaboration © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.39 • Mobile Process Enablement
  • 40. Key takeaways• Handling confidential information on the remote device if lost or stolen.–Remove wipe–Encryption yp• When an employee leaves company–Remove Wipe–Document tracking g• Document leaking into wrong hands• Anti-virus/anti-malware software• Limiting access to corporate network• Policy and Governance– Clouds4040 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 41. 06 BYOD© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 42. Bring Your Own DeviceBalancing choice while protecting corporate assets Benefits• Employees and customers use their •Shift cost to usersown device •Increasing employee satisfaction •Accelerate technology adoption• How to: Concerns• Embrace •Acceptable Use Policy Acceptable • Minimum security policy• Govern usage • Company mandated security tools• Protect assets and data •Compliance and data ownership •Retrieving company data on separation• Path towards pervasive computing Risks i k •Unencrypted information •Consumer Applications •Weak passwords and security42 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 43. Key problems for ITManagement of different platforms 2007 2010 2013• From a single client OS to multiple OS• Different devices, different form factors, different update and life cycles ?• How to manage migration of existing platforms• Wh t about current desktop /Laptop What b t t d kt /L t strategyOwn vs BYOD43 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 44. Key issues for IT Security and risk management – Is it safe?Device Overload Ever-Changing Types, OSs and Security App Threats h Features  Insecure Access to Corporate Apps Network Threats  Usage of Many Secure Data Threats  Lack of Reliability k f l bl and Unsecure Networks  Sensitive Data Leakage  Lack of Mobile Network  Device Lost or Employee Visibility Leaves User Th t U Threats  Corporate Network  Acting in Non- Vulnerability to Mobile Compliant / Threats Wrongful Ways44 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 45. BYOD considerations• Trust Model• Remediation options• Tiered policy• User experience vs. security exposure tradeoff• Corporate data protection (in transit, on device)• Device control• Acceptable use policy (cloud services)• Liability assessment b l ty ssess e t• Education4545 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 46. Summary© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.
  • 47. Key takeaways for financial institutions• Enterprise and customers always online• Everything digital• Service based economy Service-based• Data in motion architectures• Marketplace growth• Agility & Speed to Market• GRC: Governance, Risk, and Compliance4747 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 48. Download Now Get the Mobile App Download content from this session with the free Mobile App App. Text the word “Discover” to 474747 Discover or: m.hp.com/events48 © Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.
  • 49. Thank you© Copyright 2012 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice.