For the financial services industry, 2005 seems to have been the year of security concerns and challenges. So it is gratifying that as the year winds down the industry received at least indirect recognition for its role in the war on terrorism.
When the 9/11 Public Discourse Project - a private group established by the 9/11 commission when the panel formally went out of business last year - issued its bleak final report earlier this month, the only positive news was the A- grade it awarded the government for its efforts to halt the financing of terrorist networks. The Bush Administration legitimately can take some credit for the successful efforts to cut off funding to terrorists, thanks largely to the provisions of the USA PATRIOT Act.
However, these results would not have been achieved without the efforts - and significant technology investments - of the financial services industry to implement effective anti-money laundering and fraud-detection measures as well as improved customer analytics and transaction tracking measures.
Nor would these investments have paid off without robust and flexible architectures and infrastructures that enabled customer and transaction data to be integrated, organized, accessed and shared internally and externally. Equally important was understanding and buy-in from senior management that these types of IT-based initiatives must be top priorities - not just because of regulatory mandates, but also because they improve distribution, customer service, claims processing, corporate governance and overall competitiveness.
It would be great if insurers, banks and other kinds of financial institutions could set an example for our elected officials, government agencies and legislative branches, since on virtually all other counts related to making our country more secure they do not deserve an "A for effort" (at least not according to the 9/11 Public Discourse Project). A frightening number of the areas in which D or worse grades were awarded involve technology - record keeping, secure communications, identity management, etc. - as well as an apparent inability (or unwillingness) to share the information that actually is available.
In 2006, Insurance & Technology, via the Connected Enterprise series of reports, online offerings and webcasts will continue to delve into the insurance industry's efforts to eliminate this kind of operational gridlock, and instead achieve true end-to-end electronic processing of critical, core business functions such as claims, distribution and customer service.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio