Wall Street banks and brokerages are stumbling over one another to
install their own versions of XML to interconnect internal legacy
hardware and applications.
But IT managers at those firms say the potential for XML to become
an open Web interface that allows financial services companies and
their clients to share data will not be fully realised until the
industry settles on a single standard.
Most of the delegates at the XML on Wall Street conference said
they believe that standardisation will emerge only if the
securities industry and suppliers agree to map their efforts around
the ISO XML data dictionary, which defines data descriptors.
"Having separate standards now will be talked about in the future
as being as insane as each of us having our own forms of TCP/IP. As
financial institutions, we have to do more to co-ordinate those
standards," said Russ Goring, deputy chief information officer at
Dresdner Kleinwort Wasserstein, the investment banking arm of
London-based Dresdner Bank AG.
Dresdner Bank has an internal XML strategy. Overall, 42% of
companies in the global financial services industry have such
strategies in place, according to Jean-Francois Abramatic, chairman
of the World Wide Web Consortium (W3C). Another 36% of companies in
the industry have plans to implement XML as a middleware
application.
"Systems integration and sharing data are the most important
reasons to use XML," said Abramatic, whose group is still working
on XML Web services standards and protocols. "Vertical applications
are the challenge of the day."
Other delegates at the conference acknowledged that they knew
little about XML but wanted to jump on the bandwagon.
Shari Ball, director of information services at American Capital
Access, a New York-based company that insures municipal bonds, said
her firm recently bought 12 news, exchange and calculation
applications that should help its financial analysts weigh bond
risks.
Ball said she hopes XML will allow her to knit the applications
together for a single view of the bond and credit
information.
Eli Bayajian, American Capital's chief information officer, said he
would also like to populate a newly created SQL database with XML
data feeds.
XML lets American Capital's financial advisers and analysts
generate bond rating reports from news, stock and bond service
feeds such as those of Bloomberg LP and Moody's Investors
Service.
"We spent a lot of money buying those services, so we need to make
them work well," Ball said. "We need to deliver them as one type of
desktop application, so analysts can review all the companies'
information to determine if we want to buy bonds from them."
Pan Gu, an application developer in the market risk division of New
York-based JP Morgan, said he is looking for tools that will allow
him to tie together internal systems. Still, he is having a hard
time convincing his manager that middleware is needed.
"How do you convince a manager to spend the money?" he said. "If
you're building a standalone application that's not getting data
from an external system, it's pretty hard to sell. The problem is
that if you want to use XML, everyone [in the industry] has to be
on board."