Spreading The Wealth...And The Workload

First Union Corp.'s derivatives group is bringing peer-to-peer computing to its portfolio risk-analysis processes. The company says it's changing the way its system has been operating--processing performance data at the end of the day to produce actionable data the next morning. First Union is now getting analytical data that can help make better trading decisions in almost real time.

To make this shift, First Union is connecting all of its PCs across the WebProc platform aimed at financial-services companies from peer-to-peer company DataSynapse. The platform breaks once labor-intensive processing into thousands of small tasks, to be performed on whichever PCs in the network are idle. It can do so largely because the financial-services industry has built networks with bandwidth sizes to easily handle heavy data flow. The industry has also been investing heavily over the years in infrastructure technology that facilitate distributed computing, so the software is easily deployable.

Not only does First Union get to see near-instant analyses of its portfolios and inspire wiser investment decisions, but it also puts to work those costly computers idling in First Union's trading and development department.

The software is designed to make the most use of powerful machines in remote areas whenever it can. So if a floor trader with a powerful PC is out to lunch, the process will automatically shift to that PC. The instant a machine's mouse is moved or a key is hit, the job is transferred to another idle computer.

Of course, the concept behind peer-to-peer software isn't new. Shawn Fanning stormed the consumer markets with peer-to-peer Napster Inc. in August 1999. Still, using peer-to-peer software for data-centered transactions is now beginning to gain credibility as a business process--especially in financial services. Earlier this month, startup Groove Networks Inc. announced it had licensed its peer-to-peer software to pharmaceutical company GlaxoSmithKline plc. And NextPage Inc. has set up peer-to-peer networks for companies like Travelers Property Casualty and Ernst & Young.

A recent report from Gartner states that 30% of all companies will have experimented with the technology by 2003. For First Union, the benefits of experimentation are already visible.