Интернет финансы

       

The Impact on Information Provision


In his popular book 'Being Digital' Nicholas Negroponte,

Director of the Media Labs at MIT, defined the new technologies

as having four basic characteristics; decentralising, globalising,

harmonising, empowering.

Each one of these characteristics holds wide-ranging

implications for service providers in the financial markets. Distributed

network technologies are providing the facility to move away from

centralised models where it is appropriate to do so. The emergence

of ubiquitous global network provision, through both terrestrial

and satellite links, mean that even smaller financial businesses

can adopt a global position. Technological development, and the

changes in cost models for information and communication technologies,

is to some extent 'changing the playing field' for financial service



providers. A level of 'harmonisation' is occurring in the market,

increased by the need to adopt sets of global standards within

the technologies themselves. As for Negroponte's 'empowerment',

it could be argued that through access to this new wave of standards-based

lower cost technologies, financial institutions, and their employees,

are being empowered to widen their strategic approach information

services.

From the financial service providers' point-of-view,

these core developments provide a range of opportunities that

were, to a large extent, unavailable before. The new technological

infrastructure will serve as a basis for strategic partnerships

between financial institutions and the financial service providers

in the marketplace.

An Audience of One

A key change for the information services industry

generally is being brought about by the current communications

revolution. This is a move from the dominant model of broadcasting

common content a large audience to a model of providing content

to an audience of one. The customisation of information

and services to specific client requirements will become a crucial

requirement. Additionally, a high level of integration of services


will need to be achieved so that maximum leverage can be obtained

from the data services. Real-time market data, historical data

resources, transactional services, risk management systems, and

analytics tools need to be tailored initially to market segments,

but ultimately to single user needs, to the audience of one.

The Delivery of Services: First Class/Second Class

The emergence of the Internet over the past four

years has been nothing if not spectacular. Internet is no longer

the preserve of academic research. Currently, about three new

businesses debut their presence on the World Wide Web every 75

seconds. Internet is offering itself up as a network of choice

for a wide range of business activities. However, there are some

significant issues that need to be addressed in order for Public

Internet to provide core financial services effectively; issues

such as reliability, timeliness of delivery, and security.

One model that seems appropriate until such time

that the network of public Internet can offer the performance

and security is the model which has been operating in the world

of transportation for some time, a First Class/Second Class system.

The First Class/Second Class IP network model offers,

at one end, high speed secure connectivity over global private

extranets and, at the other end, global connectivity

over the public Internet. The extranets being put into place by

the major market providers are, in essence, private Internets

that use standard Internet technology and overcome current public

Internet restrictions through bypassing that network. They will

provide appropriate connectivity for clients who require high

levels of reliability, security, and performance. Where high-speed

performance and the highest levels of security are not essential,

public Internet already offers a global infrastructure. As these

issues are addressed on public Internet it is likely that more

business activity will reside there.

Interoperability



Internet technology has provided a major push towards

the uptake of a standards approach and, subsequently, of interoperability

of applications and services. The sheer scale of recent Internet

development has resulted in the emergence of standards for email,

security models, directory services and a range of other elements.

The effect of this push upon service providers in the financial

markets is being seen in two ways. Firstly, they are responding

to the move towards Internet standards by rapidly embracing these

standards in their own products and services. All the major vendors

are bringing Internet-standards services to market. Secondly,

the service providers are addressing the problems that have arisen

with the speed of development of Internet technologies. These

'problems' include the integration of secure closed networks with

the currently less secure open environment of public Internet.

Rapid uptake of the Java language and environment on public Internet

can also be seen as a 'problem'. Java offers a range of advantages

such as networkcentricity of applications and services, rapid

development cycles, and cross-platform support. At the same time,

some financial institutions see problems with Java's maturity,

robustness and bandwidth requirements. There is no doubt, however,

that Java will have a significant part to play in the applications

and services of the future.

The Outlook

The rate of change in Internet technologies looks

likely to increase in the short term. The global financial market

sector will move with these changes. It may be that this move

is along parallel tracks initially, using Extranets and private

Intranets. There will, however, be convergence in places, if not

total convergence. Even as a yardstick, the Internet is highly

relevant to this market sector.

The views expressed in this paper are the personal

views of the author, and do not necessarily represent Dow Jones

Telerate's policy.


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