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Hewlett-Packard believes financial services firms are moving from cost containment to innovation as they look to stay ahead of new rules.
With an eye to capturing a good chunk of the billions of dollars that investment banks and other financial institutions will need to spend on technology to meet new regulatory requirements, Hewlett-Packard has quietly rolled out a platform that's purpose-built for compliance and risk management, company executives said Wednesday.
HP introduced, through a soft launch, the HP Intelligence Center for investment banks and other players in the capital markets sector. The system is built on database, analytics and business intelligence tools the company gained through its 2010 acquisition of UK-based Quadrant Risk Management. Its introduction puts HP into competition with Oracle, SAP, and smaller niche players in the governance, regulatory, and compliance systems market.
The platform, which has yet to be formally announced, takes in structured and unstructured data concerning customer accounts, market conditions, and financial metrics to provide managers with a centralized view of risk throughout all product lines.
"It's the data you need to run your business" in a heightened regulatory environment in which the wake from new rules like the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III will impact financial services firms' operations for years to come, said Paul Lockyear, managing director in HP's Enterprise Business Software group, at a press gathering in New York City.
Among other things, the HP Intelligence Center is designed to allow banks to conduct stress tests for liquidity, as required by Dodd-Frank, and to calculate risk-adjusted returns on capital. "Governance, risk, and compliance is a constant journey," said Lockyear, who was CEO at Quadrant. "You have to build in flexibility."
More generally, HP is making a push into helping banks take advantage of new architectures such as cloud computing without exposing themselves to greater risk. "Their priorities are moving from cost containment to innovation," said Monique Dahler, director of sales enablement for HP's Worldwide Financial Services Industry group.
HP has partnered with Avaya to build a multi-channel customer service suite that banks can use to engage customers through e-mail, chat, text, and voice, and also through a Second Life-style Web interface that allows users to interact with bank representatives through avatars. Avaya officials demonstrated the system Wednesday. "Younger customers will want to communicate with their financial institutions very differently," said Kevin Reilly, vertical leader for Financial Services at Avaya.
HP officials said bank CIOs are now more willing to hand off development and maintenance of new technologies that don't impact core operations to service providers. E-mail, collaboration, and communications tools are now more likely to end up in the cloud. "They're realizing they don't have to do it all themselves for it to be reliable and secure," said Larry Ryan, chief technologist for HP's financial services group.
Ryan said banks are increasingly turning to cloud-based solutions from Salesforce, Microsoft, and others for services such as CRM and E-mail. Gartner estimates that financial services firms spent $11.7 billion on cloud-based software and services last year, and that the number will grow to $32 billion by 2014.
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