Chapter 21 Financial Services
In This Chapter
▶ Jack Henry & Associates
Many companies in the financial services market segment have been early adopters of new technology. The various company types included in this sector – banks, insurance, investment, and brokerage companies – all have a common need to manage very large amounts of data very fast, with a high degree of security and accuracy. Advanced technology has been leveraged to support an increasingly complex network of global financial transactions managed by the financial services industry. However, as the financial crisis of 2008 underscores dramatically, even the most sophisticated use of technology can play only a supporting role to the business decision makers leading the business.
The financial services companies interviewed for the case studies in this chapter discussed how the technology infrastructure at their companies had become increasingly complex over the years and how it needed to change to help the business become more flexible. Many of the companies we spoke with had either merged or acquired other companies, leading to the integration of new business units with very different work cultures and widely different information infrastructures. The need to be able to trust and understand the information about the business across its many disaggregated parts has been a prime motivator for change in the IT infrastructure at these companies. In times of economic stress, it will become even more important for financial services companies to take a customer-centric approach that requires a supportive, integrated IT infrastructure. In addition, the industry needs to be able to respond to increasing levels of regulatory compliance, continue to build up levels of security and privacy surrounding financial transactions, and provide increased attention to fraud prevention.
Given the complexity of the IT infrastructure in many financial services companies, it’s no wonder that they have been some of the pioneers of the SOA movement. These companies recognized before almost anyone else that having the ability to take existing business logic and turn it into a business service would become a strategic advantage. That is indeed what happened. These companies haven’t stopped there.
For example, CIGNA Group Insurance is using technology to ensure that it can create new service offerings for customers quickly to stay ahead of the competition. Innoveo successfully expanded into new markets after using SOA to create a more flexible and shared infrastructure among disaggregated business units. Jack Henry & Associates used SOA to improve services to its traditional customer base and to compete in a larger, more diverse marketplace.
We think that the most important parts of the discussion of financial services are the lessons learned. Because these companies have had both success and failures, they have a lot to teach all of us about how to do SOA in a way that brings financial and business benefit.