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A Boomlet in Regional
Technology Trade Groups
American Banker
Thursday, February 20, 2003
By Lavonne
Kuykendall
Though there sometimes seem to be almost as many
financial services trade associations as financial companies, technology
professionals keep setting up new groups.
The current trend seems to be toward local and regional associations. Chicago,
Charlotte, and New
York have each spawned a specialized technology
trade group in the past 18 months.
Driven in part by an increased need for local collaboration in the wake
of Sept. 11, the groups focus on topics ranging from security to networking
to wireless technology to Linux. And they boast plenty of big-name members,
including executives from Bank of America
Corp., Bank of New York Corp., ABN Amro NV, and
Bank One Corp.
The Chicago group ……
has blossomed into a 150-member organization that calls itself Financial
Industry's Technical Officers and Professionals. The Charlotte
group, mostly executives from Bank of America and Wachovia Corp.,
emphasizes the issues under discussion at BITS, the technology arm of the
Financial Services Roundtable.
The New York federation - the Lower Manhattan Telecommunications Users
Group - was assembled more formally by some of the city's business trade
associations, which set out to address telecommunications issues after the
World Trade Center attacks. It issued its first white paper last August.
Catherine A. Allen, the chief executive officer of BITS, said the
emergence of associations like these is a welcome development.
"I think it is valuable to have grassroots local organizations to
talk to each other about contingency planning and infrastructure," she
said. "They may come at it from a cost perspective, but it is a good
thing to do from the perspective of having redundancy" in case of
larger problems.
Though there is not much new about people who work in the same industry
getting together to talk shop, the fact that the discussions are
increasingly structured and purposeful is noteworthy.
"Technology people have always talked to each other, even before
Sept. 11, because there have always been hurricanes and floods," Ms.
Allen said. But "since Sept. 11 there has been more of a focus on
sharing information and looking at ways to take out cost and share
information in time of a crisis."
Indeed, the next meeting of the Chicago group is about the security of
technology systems.
The group started a year ago …..to bat
around their mutual concerns - keeping a lid on information technology
costs, managing vendor relationships, ensuring systems interoperable. Soon
they began inviting other financial professionals who worked downtown.
Membership now includes executives from 31 major financial companies in
Chicago, including Bank One, Bank of America, Marshall & Ilsley Corp., Northern Trust Co., Aon
Corp., and GE Capital. (The companies themselves do not necessarily endorse
the group - or, in every case, even know about it.)
"We have to share information with each other," Mr. Autrata said. "There are areas where we are forced
to cooperate because of the nature of the business, and others where it is
a convenience. I can stretch my budget without losing a competitive
advantage."
Robert Thorp, (founder)….and the group's executive director, said
admission is restricted to people from the 30 or so top financial
organizations in Chicago. And
that whiff of exclusivity is part of the point.
According to its mission statement - posted at www.fitop.org - the group
intends "to filter out the recruiters, VCs, and unfortunate unemployed
who make up the majority of most networking events and seminars being
offered to the … [financial industry] community in Chicagoland."
Another big benefit is that vendors are not invited to meetings, Mr.
Thorp said. "It is a sales-pressure-free environment. We are not
always being handed business cards."
Members recruit others…said Mr. Autrata,
whose wife built the group's Web site. "We called our colleagues and
they called their colleagues," he said.
Though it does not charge for membership, it is beginning to look more
like a professional trade group. It is represented by a professional public
relations firm, for instance. And its goals include developing products,
specifications, and protocols that could be useful to vendors and financial
institutions.
Other ambitions listed on the Web site are to "demonstrate [the]
viability of approaches in prototypes, pilots, [and] proofs of
concept" and to "champion interoperability, promote open
standards, [and] make IP [Internet protocol] widely available."
Cost cutting is a big motivator. "Bank One has to spend $10,000 and
Harris has to spend $10,000, and we all do the same thing - we put software
in a lab and think about how we use it," Mr. Autrata
said. "If we discuss them together, we can all save."
Mr. Roeseler, who is head of trading business
technology at Bank One, said the group avoids discussing competitive issues
and instead gravitates toward areas of mutual concern. Frequently there are
conversations about where common standards might be developed; a recent
meeting looked at wireless technology, for instance.
"Standards are emerging that we are interested in leveraging, but
no one wants to be the one who implements it first," Mr. Roeseler said. "We want to get lessons from those
who have done that."
At the same time, Mr. Roeseler's boss, Bank
One chief executive officer James Dimon, has made
some pretty brash statements about his competitors in Chicago. At a dinner
meeting last fall he said that the foreign-owned banks in the market are
"not local banks" and he vowed, "I will compete to my last
dying breath."
Mr. Roeseler said the Chicago group does not
pretend such attitudes do not exist; it just wants to set them aside.
"I am new to the financial industry," he said. (He worked at
Lucent Technologies before taking the Bank One job.) "I wanted to
network and understand what the technical issues were. I did not find a
network or organization that would help me."
The fact is, "more than 50% of most technology projects are not
proprietary," he said. "As long as the crown jewels are
protected, the financial institutions that are members of FITOP agree that
the non-proprietary portion can be shared in such a manner as to lower
costs."
The next meeting, scheduled for Tuesday, will feature presentations from
the Department of Homeland Security, the Secret Service, the Chicago city
government, and a former head of cyber crime at the Justice Department. Mr.
Thorp,…said that a fee of $20 or so for each
meeting covered expenses, and that 70 people had signed up for next week.
Eventually, Mr. Autrata said, the group could
become a chapter of a larger national organization, though he did not say
he had one in mind. Some members already belong to BITS, which addresses
similar issues nationally in a far more organized way.
The New York group was also formed by invitation. Four New York-based
trade associations compiled a list of 13 major companies in lower Manhattan
and asked their senior technology executives to attend weekly meetings. The
companies involved include the Bank of New York Co., Deutsche Bank AG,
Goldman Sachs & Co., and Morgan Stanley.
The focus was developing a proposal for telecommunications providers on
how they should rebuild networks to ensure stability in the future.
Most of the members did not know each other, but they quickly formed
friendships, said John Gilbert, a group member and the chief operating
officer of the New York real estate company Rudin
Management.
"Nobody wanted to be sitting in this room, but we had to try to find
something positive out of this situation," he said.
The group worked for months on a list of requirements to present to
phone companies serving Manhattan, but then it delved into other topics.
Mr. Gilbert recalled that members quizzed each other about their logistical
plans.
"Everybody was very interested in what the other companies were
doing," he said. "We certainly knew each other a lot better
afterward than before, though this was a new meeting for most of them. They
developed bonds and ties that will last for a long time."
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