See things clearly
In the aftermath of the 2008 financial crisis, the finance industry is working on a number of regulatory initiatives, including Solvency II, Basel III and Dodd-Frank.
Fundamentally, the aim of these various initiatives is to reduce risk, be it insolvency risk in the EU insurance companies, liquidity risk in banking, or systemic risk across the U.S / global financial sector.
One of the…Continue
Added by Fergus Cloughley on March 27, 2013 at 6:35 — No Comments
On New Year’s Eve 2012, late afternoon, customers of three of the UK’s largest banks were unable to withdraw cash or use internet banking - some complaining that account balances were incorrectly showing ‘00.00’.
There can’t be many worse times for such a “glitch” to occur, and the (further) damage to those banks’ reputations must have been considerable. The financial cost was also considerable with, for example, Lloyds Bank setting aside £125 million to “compensate…Continue
Added by Paul Wallis on February 14, 2013 at 2:39 — No Comments
During July we attended the Federal Reserve Bank of New York, for the formation and launch of the Financial Stability Board’s (FSB) Legal Entity Identifier (LEI) Private Sector Preparatory Group.
The group was created by the FSB in response to a call from the leaders of the G20 countries to proceed with development of a, “unique identification system for parties to financial transactions.” […Continue
Added by Paul Wallis on January 24, 2013 at 3:35 — No Comments
“Assets will always fail at some point, and with any asset failure there is a chain of consequential loss which is triggered by an originating event.”
Last year, I discussed the vulnerability of the modern city to interruptions in the various critical supply flows that keep it going.
When key flows – water, electricity, natural gas or sewage – are…Continue
Added by Paul Wallis on November 22, 2012 at 3:42 — No Comments
Over at the FSClub Blog, Chris Skinner summarises a discussion he had with a senior manager in finance about bank operations. He writes,
“...most firms struggle with enterprise management.
It is down to the very nature of fragmented structures, legacy systems, merged and acquired operations, that make the enterprise view hard.
Hard but achievable, so why is it not…
Added by Paul Wallis on September 14, 2012 at 9:24 — No Comments
The citizens of both California and Japan live in the shadow of ‘The Big One’ – earthquakes of catastrophic and devastating power that will inevitably occur, one day.
Before these events, numerous ‘foreshocks’ will take place, smaller earthquakes, associated in time and space with the ‘mainshock’.
Unless things change, the finance sector will one day suffer its own ‘Big One’ – a combination of events that will cause…
Added by Paul Wallis on July 4, 2012 at 4:18 — No Comments
As I walked away from the bank HQ 6 years ago, Han Solo’s famous Star Wars quote came to mind,
“I got a bad feeling about this”
During the meeting I’d just attended, a manager from the bank had explained how some transactions with other financial institutions occurred. The transactions were very valuable, worth millions of pounds, and happened regularly. To paraphrase,
“...basically, traders transact deals, each using their own…
Added by Paul Wallis on June 14, 2012 at 5:04 — No Comments
Last week, in “Systems Thinking, Safety and Risk Management”, IBM Fellow Irving Wladawsky-Berger discussed a round table breakfast about, ‘Protecting Financial Markets in the Age of the Cloud’
“...Several participants cited the sharp rise in volume and speed of high-frequency trading over the past decade as an example of a current practice that is…
Added by Paul Wallis on May 10, 2012 at 14:06 — No Comments
It’s hard to imagine a group of people less likely to go on strike than the floor traders at the Chicago Mercantile Exchange. But, a few weeks ago, brokers in the Eurodollar options pit did just that.
They were protesting because they were unable to participate in the pricing of ‘block trades’ in Eurodollar futures, believing the system is ‘…Continue
Added by Paul Wallis on May 3, 2012 at 12:30 — No Comments
The dubious events at brokerage MF Global demonstrate yet again how vulnerable investors are in today’s data flow-reliant financial markets.
During late 2011, MF Global had been losing money on its currency market bets, and, to stay afloat, it delved into customer accounts and used customer money in attempts to cover its precarious financial position.
The attempts failed and the company had to file for bankruptcy.
According to the liquidator’s…Continue
Added by Paul Wallis on February 17, 2012 at 9:20 — No Comments
Over at Forbes.com, Dan Woods argues that,
“In every dimension, CIOs are facing an increased pace of change at the same time they are losing control over the computing environment. The number of assets they must manage is exploding. Consumerization, virtualization, cloud computing, software as a service, mobility are all increasing the complexity of the job of managing IT by orders of magnitude.”
In “The Coming Crisis of IT Management”, he…Continue
Added by Paul Wallis on January 20, 2012 at 1:30 — No Comments
During the last 15 months, here at OBASHI Think we have written a few blogs about IT in today’s data flow reliant finance industry. For example,
If a data flow is interrupted or compromised, it can cause chaos in the financial markets.
Added by Paul Wallis on November 18, 2011 at 11:30 — No Comments
Researchers at Ruhr University, Germany, recently informed Amazon Web Services (AWS) of security holes in the AWS cloud architecture, enabling AWS to fix them before any “customers have been impacted”.
The research team believes similar flaws exist in many other cloud services, potentially enabling, ‘attackers to gain administrative…Continue
Added by Paul Wallis on October 28, 2011 at 10:24 — No Comments
“The CFO's Role in Technology Investment”, is a survey of 344 CFOs “qualified in providing a perspective on technology deployment within the enterprise”. Some of the findings were that,
When you are growing up, some television programmes bury themselves deep into your brain and just stay there.
For me, one such was the BBC series “Connections”, by the science historian, James Burke.
First broadcast in 1978, the documentary explored the ways our modern technological world came into existence.
As a kid, I would watch fascinated, as Burke would weave a thread through historical eras, making “connections” between seemingly…Continue
Added by Paul Wallis on September 15, 2011 at 10:57 — No Comments
In July, Information Age ran a roundtable debate with IT leaders to discuss various bank industry issues. Here are comments made by some of the delegates:
“We still don’t understand what the exposure of the banks is to each other.”
“Some retail banks are running on 40-year-old…
Added by Paul Wallis on September 8, 2011 at 16:05 — No Comments
Here at OBASHI we believe that there is a pressing need for finance to “understand precisely how its product [money/data] flows and interacts with people, process and technology”.
This belief was further reinforced recently by the BBC’s ‘Business as Usual’, a radio documentary about continuing complexity in the financial sector.
The programme demonstrated that,…Continue
Added by Paul Wallis on July 22, 2011 at 11:00 — No Comments
A few months ago I read "How Guilty are CIOs (and IT) In The Global Financial Crisis?", where Jim Anderson wrote (his emphasis),
"Ultimately this all comes down to a problem that financial industry CIOs have not been able to solve: how to exchange financial data. It seems strange that an industry that has been built on…
Added by Fergus Cloughley on July 1, 2011 at 2:07 — No Comments
In a recent blog Larry Bonfonte encourages CIOs to “market the value of IT” to business colleagues.
You may be tempted to roll your eyes after reading that phrase, but as he neatly points out, we likely all have done a bit of ‘marketing’ in our social lives at one time or another – so its hardly an alien…Continue
Added by Fergus Cloughley on June 15, 2011 at 2:12 — No Comments
Data flow disasters are now being mentioned in TV news headlines.
That is not a good sign.
Amazon and Sony have both suffered headline-grabbing IT outages recently that impacted many customers. The interruptions in data flow they suffered will likely cost them significant amounts in compensation.
Re Amazon, although only a small number completely lost their data, I shudder to think how many years of hard work in small businesses may have been…Continue
Added by Fergus Cloughley on May 12, 2011 at 0:00 — No Comments