Back to Basics – the Microsoft Financial Services Newsletter for Developers
eek! Just received the latest edition of the newsletter and thought it was a good read to share in its entirety. The theme? Back to Basics. What do you think?
Welcome to the Fall 2008 edition of the Microsoft Financial Services Developer Newsletter!
As the financial services industry continues to grapple with this period of unprecedented turmoil, one mantra seems to be emerging as a guiding principle among the few firms that are successfully weathering the storm: back to basics. Gone are the days when banks sought to secure competitive advantage through their trading operations, dealing in increasingly complex securities, with profits (and losses) magnified by the use of extreme leverage. Indeed, Wall Street’s final two stalwarts of traditional investment banking have recently transformed themselves into commercial bank holding companies, subject to greater regulation and also eligible to participate in traditional banking activities such as lending and taking deposits.
So what does “back to basics” mean for the industry, and for the developers and architects who enable financial innovation through software? There are many implications, but today I’d like to highlight three in particular.
First, as competition grows for securing customer deposits, excellence in branch banking becomes even more important, as does the need for deep customer insight. Understanding customer needs, presenting compelling offers that are tailored to individual needs, and keeping branch operational costs under control once again sound like great ideas, and technology has an important role to play in achieving each of these goals.
Second, risk management and compliance take center stage as regulators begin to look more closely at all aspects of a financial firm’s operations. Likewise, financial institutions, burned once by risky investments, take a closer look at everything from their securities holdings to their processes for underwriting commercial and consumer loans. In exchange for access to government-provided liquidity, financial institutions of all sizes and sub-specializations will subject themselves to even greater regulatory scrutiny. Developments in the United States this week provide early evidence of this trend.
Finally, as the structure of the industry continues to change -- with mergers, acquisitions, bankruptcies, and divestitures transforming not only firms but entire sectors of the market -- organizational agility becomes of paramount importance. Successfully integrating acquired firms may be the differentiating core competency in this era of unprecedented consolidation.
Where does Microsoft technology fit into this picture, and how can you -- along with your partners in financial services -- thrive in these uncertain times? Getting “back to the basics” in branch banking means understanding customers, and Microsoft’s business intelligence (BI) suite can help with this goal by making BI ubiquitous within your organization. From the core capabilities of Microsoft SQL Server Analysis Services that power customer insight, all the way through to the end-user tools such as Microsoft Office Excel 2007 and Office PerformancePoint Server 2007 that allow users at all levels of a financial institution to transform insight into action, we provide a comprehensive platform that financial developers can use to drive customer insight.
In the area of risk management and compliance, Microsoft BI is also important, as are many of the capabilities of Microsoft Exchange Server, such as digital rights management, archiving and retention policies, and many more. Added to our increasingly strong offering in enterprise search, as well as a robust portfolio of partner solutions, Microsoft has the technology to help financial firms better manage risk. Finally, in the area of integration, Microsoft continues to make significant investments in simplifying complex integration requirements, as demonstrated by our announcements regarding “Oslo,” “Dublin,” and many other technologies. Likewise, cloud computing -- specifically “finished services” such as Microsoft Exchange Online -- can help ease the integration of acquired companies by providing a rapidly implemented solution for migrating e-mail accounts. “Oslo,” “Dublin,” and our initiatives in cloud computing will be discussed in greater detail at the upcoming Professional Developer’s Conference (PDC) later this month, so I encourage you to attend this event.
In summary, Microsoft technology can play a key role in enabling financial institutions to get back to the basics during this time of unprecedented change. Until next quarter, I wish you success in all your endeavors, and best of luck in these challenging times.
Regards,
Brian Jackson
Technology Strategist
Microsoft Corporation
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