If you are already booked for Cannes, then I wish you safe travels and look forward to seeing you there — if not, it’s an open event and not invitation only – see here to book your place. In the meantime, why not have a quick look at the very concise podcast and videocast we have prepared for Financial Services.

The podcast looks at the wider FS agenda for the week at Cannes while the videocast focuses on the “Six Killers” presentation that will kick off the FS sessions on Monday morning. You can find them here:

Podcast

Videocast

There are presentations, forums, workshops, analyst-user roundtables and networking events throughout the week. Some of these are “by registration only” sessions, so it is worth having a look at the event website and using the Agenda Builder to add these sessions to your calendar, and where necessary register your attendance. A quick summary is:

1. Six Things That Could Kill Your Financial Services Firm in 24 Months

09:30-10:30, Monday, 02 November 2009 (Location: Palais des Festivals – Ambassadeurs 2)

2. Financial Services Workshop: ‘Cost Optimization Best Practices’ and ‘Banking on Recovery’

11:00-13:30, Monday, 02 November 2009 (Location: Palais des Festivals – Ambassadeurs 1)

3. Gartner Analyst/User Roundtable: BPO for Banking/Investment Services

15:45-16:45, Monday, 02 November 2009      Speaker: Peter Redshaw

4. Gartner Analyst/User Roundtable: Collaborating With Regulators in the ‘New’ Financial Services Industry

17:00-18:00, Monday, 02 November 2009      Speaker: Alistair Newton

5. Workshop: How Will You Survive the Six Killers of the Retail Banking Sector?

08:00-09:30, Tuesday, 03 November 2009    Speakers: Alistair Newton and Peter Redshaw

6. Gartner Analyst/User Roundtable: Offshoring for Banking/Investment Services

15:45-16:45, Tuesday, 03 November 2009    Speaker: Peter Redshaw

7. Gartner Analyst/User Roundtable: Development of End-Customer-Oriented IT in Financial Services

14:30-15:30, Tuesday, 03 November 2009    Speaker: Alistair Newton

8. Executive Roundtable: The Future of European Insurance

14:30-15:30, Wednesday, 04 November 2009               Speaker: Juergen Weiss

9. Gartner Analyst/User Roundtable: To Cloud or Not to Cloud — How Applicable is Cloud Computing and SaaS for the Insurance Industry?

16:00-17:00, Wednesday, 04 November 2009               Speaker: Juergen Weiss

10. Gartner Analyst/User Roundtable: Pan-European Insurance Platforms – Dream or Reality?

09:45-10:45, Thursday, 05 November 2009   Speaker: Juergen Weiss

11. Insurance Networking Lunch (please note that this lunch requires pre-registration and is limited to 80 attendees)

13:15-14:30, Tuesday, 03 November 2009    Speaker: Juergen Weiss

In further posts I’ll be able to include links to both a podcast and a video that give more of the flavour for our keynote FS presentation and the workshops we’ll be running. In the meantime, here is a quick summary for eleven of the presentations, workshops, roundtables and networking events that will be delivered by the Banking and Investments Services analysts, dedicated to Financial Services professionals. Note that many of these are designed for end-users financial services companies only so that they can exchange views freely – I’m afraid that vendors might cramp their style!

1.    Six Things That Could Kill Your Financial Services Firm in 24 Months

09:30-10:30, Monday, 02 November 2009 (Location: Palais des Festivals – Ambassadeurs 2)

“Despite the current gloom, as the dawn of a recovery gets a little closer, some financial services firms will see an opportunity to rebuild their brand and their business. But for others, this brave new world will be a harsh and possibly fatal environment. Make sure your IT plans put you in the former category.”

2. Financial Services Workshop: Cost Optimization Best Practices and Banking on Recovery (REGISTER!)

11:00-13:30, Monday, 02 November 2009 (Location: Palais des Festivals – Ambassadeurs 1)

This extended workshop forum, including a working lunch, will allow attendees from FSI to work together to explore key issues, share best practices and create practical action plans. The session agenda is as follows:

• 11:00-12:00 —“Cost Optimization — what works and what doesn’t work,” sharing participants’ actual experience from FSI organizations and their practical advice
• 12:00 — Lunch will be served
• 12:15-13:15 “Banking on Recovery” — examining the participants’ views on investments they must make grow, where new budgets should be prioritized, and making the transition to the post-recession banking world
• 13:15-13:30 — “Wrap up” — with a focus on actionable advice and practical solutions.

3.  Gartner Analyst/User Roundtable: BPO for Banking/Investment Services       REGISTER

15:45-16:45, Monday, 02 November 2009              Speaker: Peter Redshaw

4.  Gartner Analyst/User Roundtable: Collaborating With Regulators in the ‘New’ Financial Services Industry         REGISTER

17:00-18:00, Monday, 02 November 2009              Speaker: Alistair Newton

5. Workshop: How Will You Survive the Six Killers of the Retail Banking Sector?   REGISTER

08:00-09:30, Tuesday, 03 November 2009            Speakers: Alistair Newton and Peter Redshaw

The retail banking sector has been drastically shacked by the subprime crisis. New opportunities are emerging but also new major risks for the sector. This workshop will give you the opportunity to discuss those new risks with Gartner’s financial sector analysts and other retail banking CIOs.

6. Gartner Analyst/User Roundtable: Offshoring for Banking/Investment Services         REGISTER

15:45-16:45, Tuesday, 03 November 2009            Speaker: Peter Redshaw

7. Gartner Analyst/User Roundtable: Development of End-Customer-Oriented IT in Financial Services             REGISTER

14:30-15:30, Tuesday, 03 November 2009            Speaker: Alistair Newton

8. Executive Roundtable: The Future of European Insurance            REGISTER

14:30-15:30, Wednesday, 04 November 2009       Speaker: Juergen Weiss

9. Gartner Analyst/User Roundtable: To Cloud or Not to Cloud — How Applicable is Cloud Computing and SaaS for the Insurance Industry?     REGISTER

16:00-17:00, Wednesday, 04 November 2009       Speaker: Juergen Weiss

10. Gartner Analyst/User Roundtable: Pan-European Insurance Platforms – Dream or Reality?             REGISTER

09:45-10:45, Thursday, 05 November 2009           Speaker: Juergen Weiss

11. Insurance Networking Lunch (please note that this lunch requires pre-registration and is limited to 80 attendees) REGISTER

13:15-14:30, Tuesday, 03 November 2009            Speaker: Juergen Weiss

Join us for a networking and best practices lunch session for professionals from the Insurance Industry. Sponsored by Fadata, the lunch will include an introduction from Gartner analyst, Juergen Weiss, followed by a discussion by Fadata on the state of the insurance industry in Europe.

The UN called today for a new reserve currency that the Saudi central bank governor has denied holding talks with China and other countries about dropping the use of the dollar for pricing oil, regardless of press commentary to the contrary that appeared in the Independent newspaper.

Does any of this matter to IT professionals?

Apart from the macro economic and political ramifications, the impact on IT professionals will be muted. This is not the same situation as the euro conversion. The impact on IT from the introduction of the euro was significant and involved changing devices, accounting platforms, pricing, reporting etc. The loss of the dollar as a reserve currency will be far less onerous on IT departments. The dollar will not, in the near future, disappear as a currency and US domiciled firms will still use the dollar as a currency of record.

Of greater impact may be the change in dominance of the dollar as the predominant denominator of asset value. If oil, for example, started to be priced in euros or Rubles or Yuan; if major assets or services were priced in alternate currencies, eg outsourcing services priced in Rupees – then IT executives would have to be aware of the ramifications that such changes would have on their budgets and investment criteria, including the potentially greater currency risks associated with arguably less liquid currency alternates.

Undoubtedly the increased use of alternate currencies will potentially stress payment systems, document management, reporting and decision analytics tools. As counterparts get used to measuring and managing new valuations for goods and services there may well be delays in processing invoices, payments, statements etc and corporate treasury and accounting departments may initially lack the data and agency services to analyze and adequately report the effects on the supply chain.

Political posturing and journalistic noise is one thing. However, the market is the final arbiter of change. Remember when SDRs were attempted to be introduced and traded in the 1970s. Where was the liquidity? The market will decide whether the dollar is still the major force it once was. Until then the best course of action in this year-end planning and budgeting season is to:
• Run a scenario analysis on the sourcing and investment implications for non-dollar denominated budgets
• Check system interface flexibility for currency conversions
• Check data quality provisions and accessibility to non-dollar denominated currency sources and historical records
• Check reporting capability for conversion that effect limits, macros, risk calculations, pricing systems etc
• Check GUI displays for their ability to accommodate display changes
• Check 3rd party contract agreements for currency conversion and price impacts as well as the ongoing validity of the contract in the event of material change

If all else fails – use that old City of London trading tip: when you see something printed as a headline in the newspaper do the opposite, ie the dollar could now represent a great buying opportunity…

In the interim we would love to hear from our clients – how will the dollars demise impact your business? Is currency conversion part of your strategic plan? Would more in-depth research on the impact of currency fluctuations address some of your 2010 challenges? Comment on this blog or email: david.furlonger@gartner.com

Related Published Gartner Research:
• Executive Leadership and Innovation: Critical Issues at the Intersection of Business, Information and Technology
• The Future of Money
• The Financial Market Crisis: Storm Clouds Over the Euro

In a subsequent session, Leonard Matz, an expert in liquidity risk management (LRM), made some pertinent points about having to distinguish between tactical LRM and strategic LRM and how the current focus on cash flows doesn’t solve the basic problem that no bank can ever hold enough liquidity for stressed (low probability, high impact) situations. As he put it, “Not enough liquidity kills you quickly; too much liquidity kills you slowly.” One of Matz’s suggestions was that banks of all sizes need to put a lot more effort into constructing and monitoring alternative business scenarios (something that Gartner has already suggested earlier this year in The Financial Crisis: The Need for Scenario Planning) with associated KPIs to help spot when unusual situations are about to arise and then arrange immediate secondary funding. Forecasting the “Buffer Life” and how soon it’s likely to run out is useful but, more importantly, how vulnerable is the bank if/when it runs out? What contingency plans are in place for when that happens and how is secondary funding obtained?

Finally, in one of the closing sessions, a panel drawn from BNP Paribas, Investec, EuroCCP, Kas bank and SunGard looked at post-trade, cross-border processing in the post-MiFID world. A lot has already been written about the emergence of the new MTFs in Europe (see MiFID and the New Trading Venues) but much of the focus here was on the implications for CCPs and CSDs in the search for best execution. Lower prices have not always translated into lower overall costs as the users struggle with connecting to multiple venues and the lack of interoperability between clearing and settlement organizations. Trevor Gatfield of Investec suggested that the automation of trading and smaller trade sizes have had a bigger impact on cost than the proliferation of MTFs and Dark Pools. Laurens Vis of Kas Bank reinforced that point by stating that his firm would like to pick only the winners but right now it has to pick them all: “Today it is less like the United States of Europe than the Competing States of Europe.” For things to improve, he said, exchanges must abandon closed relationships and open up to multiple CCPs. The market needs Smart Clearing as well as Smart Order Routing.

 There has been some serious bad news recently that should be worked into your response scenarios, though they just haven’t drawn much press:

• On July 13 researchers at the University of Wisconsin reported shifts in the H1n1 virus giving it a greater ability to infect the lungs than common seasonal flu viruses, increasing the risk of causing pneumonia.
• Resistance to Tamiflu has recently been encountered in 3 “isolated” cases, San Francisco, Japan and Denmark.
• Britain, already the third major locus of the disease behind the US and Mexico, reports cases are doubling every week, and could exceed 100,000 cases per day by the end of August, 2009.  Currently, officials plan to inoculate their entire population against H1N1 by the end of 2009.

You should quietly investigate a “worser case” scenario than the ones you have now using a more infectious, harsher, drug-resistant influenza strain.  Make sure you factor in things like the suddenly-limited resources of local health departments and hospitals, which may make mass-inoculation programs problematic. Have you checked your supplier’s plans?  I have yet to speak with any clients who had factored in what the potentially high worker absentee rate would do to the supply chain for things like food and fuel… what happens to your plans if your healthy staff has hungry dependants and an empty fuel tank in their car?

 Finally—keep an eye open for overstretched resources.  Almost everyone we have spoken with on pandemic planning is preparing to implement some degree of telecommuting, which is going to place tremendous stresses not only the bank’s infrastructure, but internet providers themselves.  Have you checked with the engineers at your local broadband suppliers to see if they have tested for everyone trying to work from home at once?  What is your personal experience with your internet supplier and service during “hot” high bandwidth-demand events?

 Preparedness is a moving target—you need to keep adjusting your expectations and preparations as the situation changes around you

I think this appointment bolsters Gartner’s recent rating of XBRL’s maturity.  SWIFT, an international consortium of over 8,000 financial services firms, industry utilities, and their commercial customers stretching across more than 200 countries, brings significant expertise and long-term experience in standards development, implementation and migration. They also bring their relationship with ISO and the development of ISO 20022, which seeks to bring harmonization across different standards initiatives. SWIFT’s skills complement the skills demonstrated by the XBRL organization in driving rapid standards development and adoption, and the development of unique functionality that increases the usefulness of the XBRL standard.

The close working relationship which appears to be developing between SWIFT and XBRL gives added hope that XBRL will take on the needed additional discipline around taxonomy interoperability, certifications, and tempered change. And SWIFT can learn from XBRL as well, bringing some of the dynamic XBRL approach to SWIFT MT, 15022 and 20022 standards.

It seems to us that banks could take a leaf out of Hyatt’s play book and adopt something similar in these hard economic times. What if you log on to your online banking site to pay your utility bill, and before the payment instruction is processed the bank sends you a message indicating that they have paid this bill on your behalf? Can you also imagine the client reaction if this “random act of kindness” was done in a branch setting? Now that would be customer relationship management!

Interestingly, we are starting to see the first signs of banks adopting such approaches. Recently AKBANK in Turkey, started surprising holders of their Wings branded credit card, by picking up the tab for a random selection of customers using their Wings card to pay the bill at some of Istanbul’s most upmarket restaurants. This link to the Turkish banking market is not necessarily surprising to us based on the case study work we did earlier in the year: Case Study: Turkish Bank TEB Builds a Culture to Promote Innovation.

I vote for banks to start with property taxes, mine is due this month!

The growing interest of the SWIFT community in mashups is in itself interesting, because of a key characteristic of mashups: they are oriented around community. As Anthony Bradley and David Gootzit note in a recent research report, The Five Core Principles of Enterprise Mashups, mashups are Web 2.0 and conform to the Web 2.0 “architecture of participation” principle. To quote, “Mashups capitalize both on the community of systems as mashable sources … and on the community of people.”

And what is SWIFT, but a community – a community of banks, other financial service providers, and their customers and counterparties.

I’ve been hearing hype around mashups for quite some time, but the actual use by banks has seemed low, mostly for things like showing the location of ATMs or bank branches on interactive maps. There are exceptions – financial social networks, like Mint, have been using these capabilities to offer account aggregation and financial advice.

Yet the use of mashups, which Gartner defines as Web technology-based lightweight composite applications created by sourcing capabilities from established content and systems functionality, may provide significant business value for banks. This stems from three other key characteristics of mashups:

1. Use existing data and functionality to create new, lightweight applications. Business benefits: faster time to market, low(er) cost due to reuse
2. Bring together multiple sources of data and functionality in an almost limitless array of possibilities. Business benefits: higher productivity, efficiency and accuracy; improved decision making
3. Can be rapidly assembled to focus on the unique requirements of individual users. Business benefits: improved  user (customer!) responsiveness and satisfaction

It will be interesting to see if the SWIFT community can put energy into mashups for financial services.

 Unlike seasonal influenza outbreaks, which are most dangerous to the frail and elderly, the majority of H1N1 victims are under the age of 25 years.  A small number of people infected (2%) develop severe illness and life-threatening pneumonia. Half to two thirds cases of severe and fatal infections have been in adults between the ages of 30 and 50 years, key contributors to the work force.   Though many had preexisting conditions such as respiratory diseases, notably asthma, cardiovascular disease, diabetes, autoimmune disorders, and obesity, from a third to half, though of severe and fatal infections were in “previously healthy” young and middle aged people.  Stress levels are likely to be, and remain high.

 This is a good time to quietly and cheerfully check the status of your pandemic preparations– and even less reason to panic than usual.    The financial services industries were leaders in pandemic preparedness… but it never hurts to check, test and train–that is how one stays a leader.

• Things being as they are in the industry, the chances are very good that your team, partners and critical suppliers have had some staff-turnover or reductions.  Clearly identify and notify HR of IT staff with critical skills that must be retained during reductions in workforce if the bank expects to be able to operate or reopen after a disaster or during an influenza outbreak.   Make sure that policies and preparations for employees to work from home have not been rescinded since the flu crisis was “over”.
• Review existing BCM/DR and contingency plans to ensure that they are up to date from a personnel and supplier perspective.  Are your existing operations and emergency plans fully documented and able to be executed under new management and staffing if necessary? 
• Are sanitary supplies—such as hand sanitizer, tissues and masks available and in good supply?  What about your emergency supplies?  What about medical resources nearby the branch or office for workers who become sick at work?  Many of these may have been closed, or their hours curtailed, recently for financial reasons.
•  The WHO is concerned about the spread of H1N1 to less developed countries be certain that any outsourcers located there have at least met your agreed BCM/DR standards, and any special pandemic requirements of their local governments.  Are preparations still in place to repatriate overseas or traveling staff rapidly if conditions deteriorate?

The promotion to Phase 6 was expected, and is in itself unlikley to affect operations.  Keep an eye on pandemicflu.gov and Gartner’s own pandemic coverage for updates.

..and wash your hands, of course.