By Jim Middlemiss
http://www.wallstreetandtech.com/showArticle.jhtml;jsessionid=MMCMY42Y0Q0QCQSNDLPSKH0CJUNN2JVN?articleID=59301331
In this article, the author explores the growth opportunities and challenges faced by China’s stock market. China as with many rapidly developing economies, is experiencing growth in its stock market, yet it needs vital technology to support its growth. The growth in the Chinese stock market is because the country of 1 billion people is experiencing an industrial revolution with an annual economic growth rate of 10%, and a more free-market capitalist approach to business. With six stock exchanges currently in operation in China, there are great opportunities and need for western companies to offer their IT services in maintaining a well-functioning capital market. For example, an opinion expressed in the article was that there is a multitude of opportunities for technology firms to offer “the latest and greatest in trading solutions.” When China first developed its trading platforms it was on a “proprietary basis.” This is changing however, and they realize the benefit they could gain by partnering and contracting out the work to experienced foreign financial firms.
A key player in providing the technology and platform to support such market activity are companies like Accenture and its partner Deutsche Borse, who provided technology to the Shanghai Stock Exchange. For example, Accenture and Deutche Borse, used its Xetra trading system as a platform and then adapted it for the Chinese market. Accenture’s vision was to create a “robust, scalable trading platform for future innovations and new products.” It won the contract from the Chinese, over IBM, Hewlett-Packard and AtosEuronext.
China also uses western technology, in its Securities Trading Automated Quotations System (STAQ). STAQ is based on the Nasdaq and National Electronic Trading System (NET). Technology provided by western firms, have also benefitted China’s foreign exchange market. The China Foreign Exchange Trade System (CFETS) chose Reuters to help develop its global foreign exchange system.
China’s technological infrastructure is conducive for growth, as major financial corporations find it easy to setup and get their office running, with the availability of internet technology with high speed lines. For example, in the article it mentions “Depository Trust and Clearing Corp,” which heavily relies on technology for its security business, which had no trouble in setting up its operations in Shanghai. The company developed an internet-based system to handle corporate actions such as stock splits, elective dividends and tender offers.
Although China can be seen as a great growth opportunity in expanding financial markets globally, it is still relatively regulated by the Chinese Government and investment by foreign investors is limited to Joint venture (JV) companies. It is however creating opportunities for foreign firms in transforming China’s ambitions into a reality. They need the skills, expertise and technological know-how of western companies to expand its financial markets. With a limited stake in ownership of 33%, foreign companies can partner with local companies through a joint venture. Morgan Stanley and Goldman Sachs for example, are able to penetrate the Chinese market through such measures. They can partake in IPO deals, underwriting, advisory services and creating trading programs. However, the brokerage services industry is not accessible to foreign firms, as the article mentions, it is strictly reserved for the “approximately 120 licensed domestic broker-dealers.”
In the article, I found conflicting views, in that some companies view China as an easy place to do business in terms of its technological infrastructure, and later in the article, traders, describe the volatile situation of China’s trading business, because they are lacking in their internet technology. Bob Ray, senior vice-president of business development at the Chicago Board of Trade (CBOT) believes that there is still an area of weakness in China’s telecommunications infrastructure. Another interesting fact, highlighted in the article, was that the Chinese authorities do very well is their ability to learn from overseas companies and leverage the IT skills that foreign firms can bring. I believe that the Chinese financial markets have greatly benefitted and will continue to benefit from the technology developed by western firms, which have more experience and know-how from developed markets such as the NYSE, Nasdaq and CBOT.
Wednesday, October 24, 2007
Rey- Little Green Lies
Elgin, Ben. "Little Green Lies." BusinessWeek 29 Oct 2007: 45-52.
http://www.businessweek.com/magazine/content/07_44/b4056001.htm?chan=search
The Article that I found identifies that making a company environmentally friendly cost effective and profitable is becoming questionable. The featured individual of this article is person named Auden Schendler. Schendler worked as a junior researcher at the Rocky Mountain Institute, which is a think tank in Aspen Colorado. He worked for a well-known author named Amory Lovins who co-wrote “natural capitalism”. Lovins’ ideas embrace the notion that “going green” can help companies increase profits while saving the planet.
This notion of “going green” has become a centerpiece for corporate image crafting. Companies such as General Electric identify that they spend nearly their entire multimillion-dollar advertising budget on green driven projects and products. Other companies such as Google and Yahoo pledge to have all of their offices carbon free by 2008.
The idea of pledging to improve the environment has become a standard for forward thinking corporations. However, the biggest issue for organizations is being able to stay profitable along with implementing new environmental friendly projects. The most common solution to this issue is the use of Renewable Energy Credits (REC’s). REC’s are a type of financial arrangement that companies use to justify assertions that they have reduced their net contribution to global warming. These REC’s should be used to promote the use of third party pollution free energy. However, companies such as Staples, Fed Ex and Johnson and Johnson merely use REC’s as justifications for their overall energy consumption. The issue with these statements is that organizations are continually consuming more energy, but are using REC’s as their excuse for their overall energy usage.
This article also identifies specific firms who have actually moved towards legitimate environmental gains. Walmart has given top billing for energy saving fluorescent light bulbs even though incandescent bulbs are more profitable for the company. Office depot have replaced all of their lighting in more than 600 stores, which has caused a 10% decline in the release of heat – trapping gases.
In 2006, Johnson and Johnson spent one million dollars on credits, which are equivalent to 400,000 tons of emissions. Based on this purchase alone, J&J received praise from the Environmental Protection Agency and the World Wildlife Foundation. J&J have claimed to have reduced their contribution to global warming by 17% since 1990. Dennis Canavan who is the company’s senior director of global energy stated that REC’s don’t really reduce J&J’s pollution, but somewhere along the line they do encourage new projects.
The economics behind REC’s is vague do to lack of market makers for the credits. REC’s are purchased roughly at $2 a megawatt hour, however normally wind developers usually receive roughly $91 per megawatt hour from selling their electricity to utilities and from government tax breaks and incentives. This leaves little room for expansion for green energy companies because another $2 does not offer the amount of capital needed to develop their technologies. To sum up this situation, REC’s are currently the system available to offset Carbon Dioxide for green companies. Even though REC’s may help to invest in new projects, in the long run they do not encourage further development or growth of green technologies.
http://www.businessweek.com/magazine/content/07_44/b4056001.htm?chan=search
The Article that I found identifies that making a company environmentally friendly cost effective and profitable is becoming questionable. The featured individual of this article is person named Auden Schendler. Schendler worked as a junior researcher at the Rocky Mountain Institute, which is a think tank in Aspen Colorado. He worked for a well-known author named Amory Lovins who co-wrote “natural capitalism”. Lovins’ ideas embrace the notion that “going green” can help companies increase profits while saving the planet.
This notion of “going green” has become a centerpiece for corporate image crafting. Companies such as General Electric identify that they spend nearly their entire multimillion-dollar advertising budget on green driven projects and products. Other companies such as Google and Yahoo pledge to have all of their offices carbon free by 2008.
The idea of pledging to improve the environment has become a standard for forward thinking corporations. However, the biggest issue for organizations is being able to stay profitable along with implementing new environmental friendly projects. The most common solution to this issue is the use of Renewable Energy Credits (REC’s). REC’s are a type of financial arrangement that companies use to justify assertions that they have reduced their net contribution to global warming. These REC’s should be used to promote the use of third party pollution free energy. However, companies such as Staples, Fed Ex and Johnson and Johnson merely use REC’s as justifications for their overall energy consumption. The issue with these statements is that organizations are continually consuming more energy, but are using REC’s as their excuse for their overall energy usage.
This article also identifies specific firms who have actually moved towards legitimate environmental gains. Walmart has given top billing for energy saving fluorescent light bulbs even though incandescent bulbs are more profitable for the company. Office depot have replaced all of their lighting in more than 600 stores, which has caused a 10% decline in the release of heat – trapping gases.
In 2006, Johnson and Johnson spent one million dollars on credits, which are equivalent to 400,000 tons of emissions. Based on this purchase alone, J&J received praise from the Environmental Protection Agency and the World Wildlife Foundation. J&J have claimed to have reduced their contribution to global warming by 17% since 1990. Dennis Canavan who is the company’s senior director of global energy stated that REC’s don’t really reduce J&J’s pollution, but somewhere along the line they do encourage new projects.
The economics behind REC’s is vague do to lack of market makers for the credits. REC’s are purchased roughly at $2 a megawatt hour, however normally wind developers usually receive roughly $91 per megawatt hour from selling their electricity to utilities and from government tax breaks and incentives. This leaves little room for expansion for green energy companies because another $2 does not offer the amount of capital needed to develop their technologies. To sum up this situation, REC’s are currently the system available to offset Carbon Dioxide for green companies. Even though REC’s may help to invest in new projects, in the long run they do not encourage further development or growth of green technologies.
John-Speed Killed The Floor Trader -- Wall Street's quest to process data at the speed of light relies on the physical proximity of servers to overcom
http://proquest.umi.com.proxyau.wrlc.org/pqdweb?did=1281832421&Fmt=3&clientId=31806&RQT=309&VName=PQD
This article discusses the increase in electronic trading and the emergence of collocation of a firms system running their algorithms. Firms are hoping that the close proximity of their systems will eliminate time lags in area networks. In addition, firms are moving to electronic trading because they want their transactions executed instantly. For example, if a client wants to purchase 100 shares of Google stock trading at $600, and decides to call his consultant to purchase the stock it will take a while for the order to be executed and the price could jump up to $650 by the time the transaction takes place. Furthermore, firms are turning to electronic trading because a 1-millisecond advantage in trading applications can be worth millions of dollars a year to a major brokerage firm.
Collocation has allowed firms to execute transactions within seven milliseconds traveling from New York to Chicago. Furthermore, transactions taking place from East Coast to the West coast it only takes 35 milliseconds. Speed is extremely important to firms looking to obtain the best prices, which is why firms are paying high prices to have their servers placed in both the NYSE and the NASDAQ. The article explains how the servers in shared data centers are usually connected to Gigabit Ethernet. The Gigabit Ethernet uses the ultrahigh-speed switching fabric called InfiniBand increasingly used for the same purpose to support the servers and allow transactions to take place at such high speeds. InfiniBand is a high-speed input/output technology that speeds up the transfer of data-intensive files across servers, storage devices, and networks. Companies are looking to use InfiniBand because it will help reduce latency as a result from wires, switches and other equipment. Even though speed is important, how much faster can we go? Moreover, do we have the equipment that has the capability to support the speed?
Furthermore, while electronic trading sounds great it is putting floor traders out of work but is opening opportunities for ECNs to emerge. The stock market is now moving from a financial sector to an IT sector with the increase in efficiency and technology to execute trades and the elimination of latency.
This article discusses the increase in electronic trading and the emergence of collocation of a firms system running their algorithms. Firms are hoping that the close proximity of their systems will eliminate time lags in area networks. In addition, firms are moving to electronic trading because they want their transactions executed instantly. For example, if a client wants to purchase 100 shares of Google stock trading at $600, and decides to call his consultant to purchase the stock it will take a while for the order to be executed and the price could jump up to $650 by the time the transaction takes place. Furthermore, firms are turning to electronic trading because a 1-millisecond advantage in trading applications can be worth millions of dollars a year to a major brokerage firm.
Collocation has allowed firms to execute transactions within seven milliseconds traveling from New York to Chicago. Furthermore, transactions taking place from East Coast to the West coast it only takes 35 milliseconds. Speed is extremely important to firms looking to obtain the best prices, which is why firms are paying high prices to have their servers placed in both the NYSE and the NASDAQ. The article explains how the servers in shared data centers are usually connected to Gigabit Ethernet. The Gigabit Ethernet uses the ultrahigh-speed switching fabric called InfiniBand increasingly used for the same purpose to support the servers and allow transactions to take place at such high speeds. InfiniBand is a high-speed input/output technology that speeds up the transfer of data-intensive files across servers, storage devices, and networks. Companies are looking to use InfiniBand because it will help reduce latency as a result from wires, switches and other equipment. Even though speed is important, how much faster can we go? Moreover, do we have the equipment that has the capability to support the speed?
Furthermore, while electronic trading sounds great it is putting floor traders out of work but is opening opportunities for ECNs to emerge. The stock market is now moving from a financial sector to an IT sector with the increase in efficiency and technology to execute trades and the elimination of latency.
Ajai - Financial services will be India's next growth engine
URL: http://indiapost.com/article/techbiz/1267/
India’s growth across many sectors has triggered the attention of many investors across the world. In a developing nation with a population over one billion, like China, investors want to jump in and see how they can make India a useful resource for business, and wish to help India grow into a fully developed nation. Part of India’s attractiveness is its education system which produces millions of students with a sophisticated education, and also its purchasing power parity, which allows for a lower wage rate. This article talks about general economic growth across India, and how financial services are becoming more important to India’s growth.
Mumbai, a rapidly growing city in Northern India, is looking to be a large international financial center. Though India currently purchases around $15 billion in financial services annually, the minister wishes to make India a leader in providing financial services as well. The finance minister noted that the stock market movements in India have been doing significantly better than the Nasdaq or Dow Jones. He mentions also that market capitalization in the Bombay Stock Exchange exceeds the aggregate deposits in the banking system.
The Indian securities markets are not only growing rapidly, but are also heavily regulated. According to the finance minister, they are amongst the best regulated markets in the world. He also notes that the financial instruments and markets use the latest technology. He points out that there are winners and losers with the movements towards independent financial markets. New companies willing to adapt to competition and improve efficiencies are winners, whereas family-owned businesses that opposed liberalization have lost. Sectors that have been privatized and thrown into competition such as telecommunications, information technology, banking, and insurance have gained tremendously.
India is here to stay in the global competitive scope of business. The finance minister reassures us that India is now governed by law, is a democracy, and is more open to foreign investment than ever. With this growth, India can make more capital investments on infrastructure and address issues such as disease, poverty, and ignorance.
This is an interesting article because India is completely changing the nature of its business environment. Ever since the move to liberalization and privatization, tremendous gains have been seen and India now has a bolstering middle class with white-collar jobs that have increasingly been in the financial and technology sector. Just like China, or even the USA before it was fully developed, India is taking steps to become more competitive and is doing so to try to address issues that have brought it down in the past. It will continue to grow, and soon enough, be one of the leading nations of the world.
India’s growth across many sectors has triggered the attention of many investors across the world. In a developing nation with a population over one billion, like China, investors want to jump in and see how they can make India a useful resource for business, and wish to help India grow into a fully developed nation. Part of India’s attractiveness is its education system which produces millions of students with a sophisticated education, and also its purchasing power parity, which allows for a lower wage rate. This article talks about general economic growth across India, and how financial services are becoming more important to India’s growth.
Mumbai, a rapidly growing city in Northern India, is looking to be a large international financial center. Though India currently purchases around $15 billion in financial services annually, the minister wishes to make India a leader in providing financial services as well. The finance minister noted that the stock market movements in India have been doing significantly better than the Nasdaq or Dow Jones. He mentions also that market capitalization in the Bombay Stock Exchange exceeds the aggregate deposits in the banking system.
The Indian securities markets are not only growing rapidly, but are also heavily regulated. According to the finance minister, they are amongst the best regulated markets in the world. He also notes that the financial instruments and markets use the latest technology. He points out that there are winners and losers with the movements towards independent financial markets. New companies willing to adapt to competition and improve efficiencies are winners, whereas family-owned businesses that opposed liberalization have lost. Sectors that have been privatized and thrown into competition such as telecommunications, information technology, banking, and insurance have gained tremendously.
India is here to stay in the global competitive scope of business. The finance minister reassures us that India is now governed by law, is a democracy, and is more open to foreign investment than ever. With this growth, India can make more capital investments on infrastructure and address issues such as disease, poverty, and ignorance.
This is an interesting article because India is completely changing the nature of its business environment. Ever since the move to liberalization and privatization, tremendous gains have been seen and India now has a bolstering middle class with white-collar jobs that have increasingly been in the financial and technology sector. Just like China, or even the USA before it was fully developed, India is taking steps to become more competitive and is doing so to try to address issues that have brought it down in the past. It will continue to grow, and soon enough, be one of the leading nations of the world.
Junichi - SBI Launches an After Hours Trading System
http://www.lexisnexis.com.proxyau.wrlc.org/us/lnacademic/results/docview/docview.do?risb=21_T2330125292&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T2330125295&cisb=22_T2330125294&treeMax=true&treeWidth=0&csi=8351&docNo=1
Many people think that stock trades are conducted during the day which is usually 9 am to 5 pm. However, there are trading going on during the night time too. This article discusses about After Hour Trading System launched by SBI holdings in Japan. Before reading this article, I didn’t know about the After Hour Trading System at all and it was surprising to me to know about it. In Japan, prior to SBI holdings, Monex Inc. and kabu.com Securities Co. have been offering nighttime trading since 2001 and 2006. A daily market trading amount of Monex is approximately 2 million dollars and Kabu.com is about 1 million dollars. Whereas, SBI holing have a daily trading amount of approximately 5 million dollars which is higher than the sum of preceding 2 company’s market trade amount. Thus, After Hour Trading market scale has almost tripled after SBI launched its After Hour Trading System.
Trading hours for the new proprietary trading system, called Japannext PTS, are weekdays from 7 p.m. to 11:50 p.m. I thought that this After Hour Trading System will make the stock market more borderless. When New York Stock Exchange (NYSE) opens its market, many trades have been still made in Japan. Thus, people do not have to care about time to trade stock. In addition, if the trading hour prolongs, the stock market will expand since more trade will be conducted.
An After Hour Trading has promoted widely these few years, however, its market scales is only 0.03% of Tokyo Stock Exchange (TSE). This is because, there are fewer participants in the night time trading, and it is difficult to form a trade. In spite of this, participants think that After Hour Trading System will allow them to bring innovation to the Japanese equity market, and so do I. In order to make this happen, I believe that they should make every effort to invite attractive companies to join its market and expand its market scale. Since After Hour Trading System has introduced, I am wondering that there might be an introduction of Week End Trading System in the near future.
Many people think that stock trades are conducted during the day which is usually 9 am to 5 pm. However, there are trading going on during the night time too. This article discusses about After Hour Trading System launched by SBI holdings in Japan. Before reading this article, I didn’t know about the After Hour Trading System at all and it was surprising to me to know about it. In Japan, prior to SBI holdings, Monex Inc. and kabu.com Securities Co. have been offering nighttime trading since 2001 and 2006. A daily market trading amount of Monex is approximately 2 million dollars and Kabu.com is about 1 million dollars. Whereas, SBI holing have a daily trading amount of approximately 5 million dollars which is higher than the sum of preceding 2 company’s market trade amount. Thus, After Hour Trading market scale has almost tripled after SBI launched its After Hour Trading System.
Trading hours for the new proprietary trading system, called Japannext PTS, are weekdays from 7 p.m. to 11:50 p.m. I thought that this After Hour Trading System will make the stock market more borderless. When New York Stock Exchange (NYSE) opens its market, many trades have been still made in Japan. Thus, people do not have to care about time to trade stock. In addition, if the trading hour prolongs, the stock market will expand since more trade will be conducted.
An After Hour Trading has promoted widely these few years, however, its market scales is only 0.03% of Tokyo Stock Exchange (TSE). This is because, there are fewer participants in the night time trading, and it is difficult to form a trade. In spite of this, participants think that After Hour Trading System will allow them to bring innovation to the Japanese equity market, and so do I. In order to make this happen, I believe that they should make every effort to invite attractive companies to join its market and expand its market scale. Since After Hour Trading System has introduced, I am wondering that there might be an introduction of Week End Trading System in the near future.
Is money spent on IT always worth it?
http://www.businessweek.com
Jess Roper
Having up to date technology has always been a problem for all industries. The banking industry is no exception. This article comments that some banks have the misconception that spending the majority of their IT budget on fixing their old systems instead of just buying new technology. However, buying new systems is not always an option for banks. Obtaining a new system not only takes the money it costs to purchase it, but all the cost of training employees on the new systems. There are times when simply upgrading a system is necessary and getting new technology overall would be going over the top. If a bank has only had the technology for a year or two, there is no reason for it to spend the thousands of dollars it might be to replace it, instead it can spend less and upgrade the software or whatever it needs. The article implies that this is a waste of money and that the banks will pay for it in the end when the various systems slow down to an extent that customers get fed up and leave for another bank where the technology is faster.
When you are talking about a normal checking account or savings account, most people have no idea how long it takes the system to process their money. They do not know if it takes five seconds or fie minutes and most do not care as long as the money ends up in their account; if it took 5 hours then the bank would have problems and would definitely need to look into getting new systems. If the article talked about investment banks and transactions tied to investments, where ever tenth of a second counts in the price that the customer would get, that would be different.
Another comment that the article makes is that many banks concentrate more on the physical appearance of the bank than on the IT components that are the really important part of the bank. It claims that the IT behind the bank is much more important than what the bank looks like and how nice the lobby is. However, a balance is important in many cases. Financial institutions have always had to have a good, almost wealthy, appearance so that their customers can be confident that they already have money, so there would be no reason that the bankers or investment professional would steal the customer’s money. If you walk past a financial institution that looks shabby, you will judge it negatively and will most likely not want to put your money in it. Look at Fannie Mae: they have a large, impressive, beautiful building as their corporate headquarters. IT is important too. It does not matter how gorgeous the building is, if a company does not have the systems to back up the look of the building (the walk to back up the talk) the company might get the customers initially but the company will not hold onto them for very long. Customers are smart (to an extent) and look for something that they think will be reliable. If the company that they have trusted their money to turns out to not be able to deliver what they promised, the customer will turn to a competitor. A balance on what the financial institution spends it money on and focuses on must be made.
The article acknowledges that the transition will not be easy for many institutions. There will be banks that are so steeped in tradition of maintaining their old systems until they are about to die or perhaps the bank is small and/or isolated and so they can not afford to update completely. Finding a solution that works is heavily dependent on each individual institution; there can be no blueprint for every company to follow.
Rawan- Northern Rock and how the internet triggered a run on the bank
http://www.itpro.co.uk/blogs/editorial-blogs/chris-green/963958/northern-rock-and-how-the-internet-triggered-a-run-on-the-bank.thtml
Northern Rock, a British bank based in England had an online banking crisis. According to the article, their was an over-dose of people withdrawing their money through the website that resulted in a total of two billion pounds. In contrast, a total of two billion people went to there closest branches and demanding to get there money back, where the bank was running out of it, which stated “only a fraction has left via its branches.” The biggest drain of its disaster was that a large amount of people withdrew through the website.
Even-though a small fraction of people visited branches, a large fraction learned through the Internet that their were problems in he bank, and the immediately transferred/removed their money from their account. I can understand that there would be an unexpected breakout in the computer system, but I believe that their should be a back up server, or there should be a limit of number of people withdrawing at the same time, so that they would not exceed their capacity, or they can limit the amount of withdrawal.
For future recommendation, they have to improve their technology servers, I think they should increase high tech directors to improve their servers, and figure out their problem. If they had limit of amount of withdrawal their should be a notice that states that, so they could be in he save side.
Nevertheless, Northern Rock is running out of money, but they have a lot of duties ahead of them. They have to work out their server, which is very expensive. However, they have to work hard to rebuild up, and fix their problems to gain their reputation back.
Northern Rock, a British bank based in England had an online banking crisis. According to the article, their was an over-dose of people withdrawing their money through the website that resulted in a total of two billion pounds. In contrast, a total of two billion people went to there closest branches and demanding to get there money back, where the bank was running out of it, which stated “only a fraction has left via its branches.” The biggest drain of its disaster was that a large amount of people withdrew through the website.
Even-though a small fraction of people visited branches, a large fraction learned through the Internet that their were problems in he bank, and the immediately transferred/removed their money from their account. I can understand that there would be an unexpected breakout in the computer system, but I believe that their should be a back up server, or there should be a limit of number of people withdrawing at the same time, so that they would not exceed their capacity, or they can limit the amount of withdrawal.
For future recommendation, they have to improve their technology servers, I think they should increase high tech directors to improve their servers, and figure out their problem. If they had limit of amount of withdrawal their should be a notice that states that, so they could be in he save side.
Nevertheless, Northern Rock is running out of money, but they have a lot of duties ahead of them. They have to work out their server, which is very expensive. However, they have to work hard to rebuild up, and fix their problems to gain their reputation back.
Giving it another shot...
Mobile Banking's Second Act
Keith Sniatecki
Seventy percent of Americans own cell phones. That’s over 200 million people. It would seem crazy for any kind of company to ignore a customer base that size. But what is involved in attracting those customers to your service? That is the conundrum faced by bank executives today when considering mobile banking.
In the beginning of the decade, several big financial institutions rolled out mobile banking initiatives, but it seemed neither consumers nor technology was ready. Some people insist that, now in 2007, we are ready to turn the corner. There are several key reasons backing this assertion.
The first is that the actual phones we have today are better. It says handsets today have “microprocessors that rival the power of a late-90s computer.” Second, we are more familiar with the use of cell phones for more than just phone calls. Many people have already purchased online games, ring tones, etc. on their mobiles. The same challenge, however, remains.
The biggest obstacle facing mobile banking is the logistical problems between banks and mobile carriers. Additionally, there is the issue of compatibility with the thousands of models of handsets out there. Unlike the Internet where a bank could host its own site, the banks would be relying on the closed-data networks run by providers such as Verizon or AT&T. While it is attractive for these companies to see people relying on phones more, they would not be willing to let banks use their networks for free. Additional expenditure on the bank side further questions the viability of this already questionable venture. There are some alternative solutions for this.
One option is to have users access a mobile website. A bank would build a separate wireless (WAP) interface that customers navigate to by typing in a Web address. This, however, can be a slow process with even simplified pages. Also, it can get expensive for mobile users constantly paying for internet access. Additionally, security is another major concern.
There are also downloadable or pre-loaded OEM client applications. To use one of these, you would click to launch the application and it would prompt you for an access code. Then you would be able to access your bank information and complete simple tasks like check account balance, pay bills, or transfer money from checking to savings accounts. A concern with this is that since you are downloading information to the phone, it would be a security issue if you lost the phone.
Some major players in the development of this industry would be third-party core system and payment providers. They could act as the middleman between carriers and banks. This is the key to making mobile banking a reality. It is difficult though because banks and carriers are both huge industries that are unaccustomed to compromising their own core capabilities and sacrificing profits.
Despite the complications, mobile banking remains on the table as an in-progress innovation. Earlier this year, many big banks attempted to provide mobile banking services once again. Its attraction is the enormous scope of cell phones these days. Most young people view their cell phones as their most important possession. Banks do not want to lose they young customers and they will continue to pursue ways to attract them. Additionally, using a technology called Nearfield Communication (NFC) would allow debit transactions to made with cell phones instead of traditional plastic cards. This is already prevalent in Japan. No one wants to be left behind in what could potentially be the next wave of e-commerce, but they don’t want to go grow broke trying to catch it either.
Keith Sniatecki
Seventy percent of Americans own cell phones. That’s over 200 million people. It would seem crazy for any kind of company to ignore a customer base that size. But what is involved in attracting those customers to your service? That is the conundrum faced by bank executives today when considering mobile banking.
In the beginning of the decade, several big financial institutions rolled out mobile banking initiatives, but it seemed neither consumers nor technology was ready. Some people insist that, now in 2007, we are ready to turn the corner. There are several key reasons backing this assertion.
The first is that the actual phones we have today are better. It says handsets today have “microprocessors that rival the power of a late-90s computer.” Second, we are more familiar with the use of cell phones for more than just phone calls. Many people have already purchased online games, ring tones, etc. on their mobiles. The same challenge, however, remains.
The biggest obstacle facing mobile banking is the logistical problems between banks and mobile carriers. Additionally, there is the issue of compatibility with the thousands of models of handsets out there. Unlike the Internet where a bank could host its own site, the banks would be relying on the closed-data networks run by providers such as Verizon or AT&T. While it is attractive for these companies to see people relying on phones more, they would not be willing to let banks use their networks for free. Additional expenditure on the bank side further questions the viability of this already questionable venture. There are some alternative solutions for this.
One option is to have users access a mobile website. A bank would build a separate wireless (WAP) interface that customers navigate to by typing in a Web address. This, however, can be a slow process with even simplified pages. Also, it can get expensive for mobile users constantly paying for internet access. Additionally, security is another major concern.
There are also downloadable or pre-loaded OEM client applications. To use one of these, you would click to launch the application and it would prompt you for an access code. Then you would be able to access your bank information and complete simple tasks like check account balance, pay bills, or transfer money from checking to savings accounts. A concern with this is that since you are downloading information to the phone, it would be a security issue if you lost the phone.
Some major players in the development of this industry would be third-party core system and payment providers. They could act as the middleman between carriers and banks. This is the key to making mobile banking a reality. It is difficult though because banks and carriers are both huge industries that are unaccustomed to compromising their own core capabilities and sacrificing profits.
Despite the complications, mobile banking remains on the table as an in-progress innovation. Earlier this year, many big banks attempted to provide mobile banking services once again. Its attraction is the enormous scope of cell phones these days. Most young people view their cell phones as their most important possession. Banks do not want to lose they young customers and they will continue to pursue ways to attract them. Additionally, using a technology called Nearfield Communication (NFC) would allow debit transactions to made with cell phones instead of traditional plastic cards. This is already prevalent in Japan. No one wants to be left behind in what could potentially be the next wave of e-commerce, but they don’t want to go grow broke trying to catch it either.
Tuesday, October 23, 2007
John-Speed Killed The Floor Trader -- Wall Street's quest to process data at the speed of light relies on the physical proximity of servers to overcom
Martin, Richard. "Speed Killed The Floor Trader -- Wall Street's quest to process data at the speed of light relies on the physical proximity of servers to overcom." InformationWeek. Wall Street & Technology. New York:Jun 2007. Vol. 25, Iss. 6, p. 41
This article discusses the increase in electronic trading and the emergence of collocation of a firms system running their algorithms. Firms are hoping that the close proximity of their systems will eliminate time lags in area networks. In addition, firms are moving to electronic trading because they want their transactions executed instantly. For example, if a client wants to purchase 100 shares of Google stock trading at $600, and decides to call his consultant to purchase the stock it will take a while for the order to be executed and the price could jump up to $650 by the time the transaction takes place. Furthermore, firms are turning to electronic trading because a 1-millisecond advantage in trading applications can be worth millions of dollars a year to a major brokerage firm.
Collocation has allowed firms to execute transactions within seven milliseconds traveling from
Furthermore, while electronic trading sounds great it is putting floor traders out of work but is opening opportunities for ECNs to emerge. The stock market is now moving from a financial sector to an IT sector with the increase in efficiency and technology to execute trades and the elimination of latency.
Jeremy - Smells Like Green Spirit
http://www.wired.com/science/discoveries/news/2007/03/72939
This article discusses the conference held at MIT called Energy 2.0 and how many large companies are looking to increase efficiency and their product base by going green. Despite the fact that many revolutions have occurred the past few decades in technology, companies are using and selling the same materials they were selling back in 1975. It goes on to talk about how unlike previous ears, where the main challenge has been communication and the sharing of information, the large problem facing people today is the issue of consumption of energy.
The article went on to specify how companies are targeting and researching newer forms of previous existing technology, such as batteries. It was discussed that one of the large obstacles stopping hybrid cars that can currently reach 30 to 40 miles per gallon from reaching over 100 miles per gallon is the creation of a lighter, more powerful battery. So, while new technologies and boundaries are being pushed everyday, older technologies are also getting looked at with new perspectives that could indeed help newer technologies take shape.
This article discusses the conference held at MIT called Energy 2.0 and how many large companies are looking to increase efficiency and their product base by going green. Despite the fact that many revolutions have occurred the past few decades in technology, companies are using and selling the same materials they were selling back in 1975. It goes on to talk about how unlike previous ears, where the main challenge has been communication and the sharing of information, the large problem facing people today is the issue of consumption of energy.
The article went on to specify how companies are targeting and researching newer forms of previous existing technology, such as batteries. It was discussed that one of the large obstacles stopping hybrid cars that can currently reach 30 to 40 miles per gallon from reaching over 100 miles per gallon is the creation of a lighter, more powerful battery. So, while new technologies and boundaries are being pushed everyday, older technologies are also getting looked at with new perspectives that could indeed help newer technologies take shape.
Fatou Coulibaly - "Identity Solution"
“Identity Solution.” Anita Hawser. Global Finance. New York: Sept. 2007. Vol. 21, Iss. 8, pg. S8, 2 pgs.
http://proquest.umi.com.proxyau.wrlc.org/pqdweb?index=65&did=1339992231&SrchMode=1&sid=1&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1193186246&clientId=31806
This article is about the imminent necessity to use a cash management security system to ensure and reinforce the security of online transactions in a company. It is because these sorts of operations increased a lot in the past and are still amplifying that companies need to make sure measures are taken to identify people who make payments within these firms. It is the US pharmaceutical company Merck which first introduced the concept of updating the firm’s security of procedures that related to payments effectuated by Merck’s enterprise resource planning (ERP) systems. Due to the fact that any account needs to have all the information about an individual who processed a transaction to be resubmitted in case of a doubt, “there is no central repository to quickly revoke signatory rights if needed.” Thus, every bank has its own complicated or long processes and forms to fill out when such things occur.
It is in this perspective that the CEO of IdenTrust (“a global network of banks including but not limited to Citi, Bank of America, and Deutsche Bank, that issues digital certificates certifying someone’s identity”) noticed that some companies were not aware of the number of bank accounts they possess, and that “25% of case account signatories are wrong.” Therefore it is crucial for such companies to adopt techniques which will enhance their security. For instance, instead of signing payment files at a company identification level, it will now be essential to perform that signing procedure at the individual stage. This means that in general, rather than just knowing that payments were done by employees within the company, now it is going to be more specific because the exact person who effectuated the corporate payment transfer will be identified.
I believe the implementation of this identity management initiative is very good because security will be ensured at its highest level. Employees won’t exchange each other’s passwords and information in order to process payments. Companies will know who is who, and who did what. IdenTrust will help firms to know and “certify that people are who they say they are.” The specific procedure consists of using the certificates in this way: “the certificates bind an identity to a pair of electronic keys, otherwise known as Public Key Infrastructure (PKI), which uses a public and private key to encrypt and sign digital information. PKI-encrypted digital certificates are considered to be one of the strongest means of authenticating someone's identity.”
I strongly approve of the use of IdenTrust’s digital identification signature credentials, not only for firms that have encountered serious security problems, but by all companies because online transactions and payment transfers don’t simply need to be performed with passwords and pin. The identification of the individuals will lead banks and many other companies to authorize their employees to take these important actions related to great amounts of money. I think this ID management solution should be furthermore developed and spread around the world, especially in countries where corruption and fraud are very recurrent. I found that this article was very interesting in terms of the specific processes it describes concerning security issues.
http://proquest.umi.com.proxyau.wrlc.org/pqdweb?index=65&did=1339992231&SrchMode=1&sid=1&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1193186246&clientId=31806
This article is about the imminent necessity to use a cash management security system to ensure and reinforce the security of online transactions in a company. It is because these sorts of operations increased a lot in the past and are still amplifying that companies need to make sure measures are taken to identify people who make payments within these firms. It is the US pharmaceutical company Merck which first introduced the concept of updating the firm’s security of procedures that related to payments effectuated by Merck’s enterprise resource planning (ERP) systems. Due to the fact that any account needs to have all the information about an individual who processed a transaction to be resubmitted in case of a doubt, “there is no central repository to quickly revoke signatory rights if needed.” Thus, every bank has its own complicated or long processes and forms to fill out when such things occur.
It is in this perspective that the CEO of IdenTrust (“a global network of banks including but not limited to Citi, Bank of America, and Deutsche Bank, that issues digital certificates certifying someone’s identity”) noticed that some companies were not aware of the number of bank accounts they possess, and that “25% of case account signatories are wrong.” Therefore it is crucial for such companies to adopt techniques which will enhance their security. For instance, instead of signing payment files at a company identification level, it will now be essential to perform that signing procedure at the individual stage. This means that in general, rather than just knowing that payments were done by employees within the company, now it is going to be more specific because the exact person who effectuated the corporate payment transfer will be identified.
I believe the implementation of this identity management initiative is very good because security will be ensured at its highest level. Employees won’t exchange each other’s passwords and information in order to process payments. Companies will know who is who, and who did what. IdenTrust will help firms to know and “certify that people are who they say they are.” The specific procedure consists of using the certificates in this way: “the certificates bind an identity to a pair of electronic keys, otherwise known as Public Key Infrastructure (PKI), which uses a public and private key to encrypt and sign digital information. PKI-encrypted digital certificates are considered to be one of the strongest means of authenticating someone's identity.”
I strongly approve of the use of IdenTrust’s digital identification signature credentials, not only for firms that have encountered serious security problems, but by all companies because online transactions and payment transfers don’t simply need to be performed with passwords and pin. The identification of the individuals will lead banks and many other companies to authorize their employees to take these important actions related to great amounts of money. I think this ID management solution should be furthermore developed and spread around the world, especially in countries where corruption and fraud are very recurrent. I found that this article was very interesting in terms of the specific processes it describes concerning security issues.
Moronta-Rural E-banking
Uganda and US Co. Launch Rural E-Banking
Ederer, Edith M. "Uganda and US Co. Launch Rural E-Banking." Associated Press 21 Oct. 2007. 23 Oct. 2007 http://ap.google.com/article/ALeqM5h6jErcVy1jTFGtYKzxMR0U22f2KQ.
This article discusses how Uganda's finance minister wants to give every part of the country accesss to the banking system and financial services. Finance Chief Ezra Suruma called upon an American company to help with the infrastructuring of this immense task because Uganda does not how the IT knowledge to take on such a task. The plan is to bring electronic banking to the rural areas in which 85% of the country's 29 million people live. So far, 389 savings and credit cooperatives are functioning and at least a thousand are to be created.
I feel like this decision is taking a big step forward to improve the economic situation of Uganda. Africa is troubled by poverty and turmoil and many of its countries lack stability. Implementing E-banking for all Ugandans will allow all the people who live in rural areas to deposit, manage, and have access to their savings. Many people who live in rural areas do have more money than people think but they can not do anything productive with it. This leaves people with no choice but to stash it in their homes and on their property because they have no where to go with it.
Currently many small banks have been built but they still lack an integrated system that will connect them with the national banking system. Uganda seeks help from foreign companies to help achieve its goals. When this project is finished Uganda should start to see vast changes in every aspect of its society. Many people in rural areas will have bank accounts and in turn will be able to recieve loans to further their local businesses. In the future, Uganands will start to see full-service banking institutions and be able to obtain credit and debit cards and he will also be able to pay bills electronically. Gradually, the economy should improve itself and Ugands will see better times.
Ederer, Edith M. "Uganda and US Co. Launch Rural E-Banking." Associated Press 21 Oct. 2007. 23 Oct. 2007 http://ap.google.com/article/ALeqM5h6jErcVy1jTFGtYKzxMR0U22f2KQ.
This article discusses how Uganda's finance minister wants to give every part of the country accesss to the banking system and financial services. Finance Chief Ezra Suruma called upon an American company to help with the infrastructuring of this immense task because Uganda does not how the IT knowledge to take on such a task. The plan is to bring electronic banking to the rural areas in which 85% of the country's 29 million people live. So far, 389 savings and credit cooperatives are functioning and at least a thousand are to be created.
I feel like this decision is taking a big step forward to improve the economic situation of Uganda. Africa is troubled by poverty and turmoil and many of its countries lack stability. Implementing E-banking for all Ugandans will allow all the people who live in rural areas to deposit, manage, and have access to their savings. Many people who live in rural areas do have more money than people think but they can not do anything productive with it. This leaves people with no choice but to stash it in their homes and on their property because they have no where to go with it.
Currently many small banks have been built but they still lack an integrated system that will connect them with the national banking system. Uganda seeks help from foreign companies to help achieve its goals. When this project is finished Uganda should start to see vast changes in every aspect of its society. Many people in rural areas will have bank accounts and in turn will be able to recieve loans to further their local businesses. In the future, Uganands will start to see full-service banking institutions and be able to obtain credit and debit cards and he will also be able to pay bills electronically. Gradually, the economy should improve itself and Ugands will see better times.
Phil - Transformation in banking
Transformation in banking
by Team DNA | Saturday, 29 September , 2007, 11:47
http://sify.com/finance/fullstory.php?id=14535353
by Team DNA | Saturday, 29 September , 2007, 11:47
http://sify.com/finance/fullstory.php?id=14535353
The article talks about the global economy in the banking industry, especially in
PSBs used to be known for their rising operating costs, mounting NPAs (Non-Performing Assets), declining profits and unfriendly customer. Now however, with the use of technology, they have been able to be more competitive and revamp the relations with their customers by making them friendlier to use. In
Since technology was the driving force for change in the banking sector. Banks now can offer more, such as investment banking, insurance, credit cards, depository services, mortgage financing, securitization, and many other areas. Technology as allowed the consumer to have a larger amount of choices and information at their disposal. PSBs also offer ATMs, internet banking, D-MAT, and plastic money to help there customers access their accounts. The private sector however began to focus more on retail banking and trying to offer better products and make a better financial automation system to increase there customer service. So the future may hold that private banks may buy out some PSBs someday.
Overall the article is mostly about how technology helped increase customer services and appeal of banks through out
Sunday, October 21, 2007
Jessica Davison "Online Businesses Face Credit Card Security Deadline"
This article focused on the importance of secure online networks for consumers and for businesses. In particular, it focused on the deadline for secure networks that major credit card companies put in place for online retailers. The major credit card companies which included: American Express, Discover, MasterCard, and Visa “jointly created the Payment Card Industry (PCI) data security standard. The PCI standard applied to retailers, payment processors, and financial institutions”.
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