Embracing innovationFour emerging technologies set to shape finance and banking

“Once a new technology rolls over you, if you’re not part of the steamroller, you’re part of the road.”Stewart Brand, American author

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1. Infrastructure virtualisation of data centre servers, storage, applications and desktops, is now moving into the infrastructure towers of network, voice and security.

2. Security visualisation tools are being developed that assess vulnerabilities and allow security operations to manage events proactively.

3. Voice is moving rapidly towards session management architecture to support hardware- and software-based endpoints and improve integration with applications and collaborative workspaces.

4. Collaboration tools are emerging to help banks connect more easily with their customers and enable staff to communicate better.

All of these innovations have the potential to significantly reduce and transform cost, mitigate risk, improve performance, address growing compliance needs and provide the flexibility to respond quickly to rapidly changing market and business needs.

The biggest challenge is knowing where to start, what you need and when it’s right to change. That’s where BT comes in. We have extensive innovation capabilities in each of these areas and have developed a framework to help you plan your route forward.

To understand how innovation and future technology direction can drive real results for your business and align to your strategic goals, we have developed a consultative approach called Horizons. With the use of Horizons we can work with you to bring innovation into your business.

This white paper looks at innovation trends in these four areas and illustrates a roadmap for deploying new technology.

There are a number of emerging and disruptive technologies that finance and banking organisations can deploy to significantly improve their service and operations, providing opportunities to connect better and more securely with customers and drive stronger, more valuable relationships.

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1. Infrastructure virtualisationThe network is a core part of any financial institution’s operation. Our network is constantly evolving and we’re driving developments on a global scale, with our Adastral Park research centre at the forefront of this innovation.

Network Functions Virtualisation (NfV) takes things that traditionally run on hardware, such as routers or firewall appliances, and converts them into software modules. This is being driven by the strong growth and expansion of physical data centres; which in turn drives the provision of commodity hardware, pushing down prices.

We believe that the continuing trend for virtualisation and increasingly standardised hardware and software will provide:

• more power at reducing price points• more blending between premise-based solutions and cloud-based options• easier deployment options.

This approach also has the benefit of reducing maintenance activity – another factor in cutting costs – and enables easier bug fixing as the problem can be remedied by a central software upgrade. All in all, it should make the network more reliable.

This virtualisation of the network should also result in significant savings on energy expenditure, by reducing the number of appliances, and help with CSR credentials. BT is a key partner in a world-class research consortium on this topic and is helping develop this vital network evolution.

Next generation networkDelivering enormous bandwidth, low latency, high reliability and longevity, optical networks have become the benchmark for all modern telecommunications, ranging from consumer broadband to bespoke services for large corporate clients.

The specific demands of the finance sector impose an almost unique set of requirements on the network – stretching performance to the limit. Fibre not only enables quicker transition and execution times for financial trades but also speeds up time to retrieve data, important in an increasingly demanding regulatory environment.

There are a number of developments in fibre that BT is leading on. In terms of raw bandwidth, trials are taking place on 40Gb/s and 100Gb/s systems. We’re also looking at better connectivity between two different optical suppliers (using alien wavelength technology), and in the field of software defined optical networks (SDONs) where bandwidth demand becomes more variable. So, for example, we could turn bandwidth off at night to save energy.

These developments will produce a faster, more reliable and better value network, critical to the efficient operation of a bank.

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2. Security visualisation toolsSecurity is vital to a bank’s operation and reputation. We understand the threats are constantly changing so being agile and resilient is critical to long-term success. Our Security Futures Practice investigates and assesses emerging security threats and trends, to try to mitigate the threat in a number of security risk areas. A robust security strategy must address these risks in terms of people, processes and technology

Our approach leaves absolutely nothing to chance. We consistently test our network for any vulnerability and do what’s needed to ensure security. This was amply shown during London 2012 (see below) and this capability and experience can be extended to look after a bank’s network.

BT has a particular pedigree and protected Intellectual Property (IP) around key data visualisation techniques, developed by its Security Futures research centre. Data visualisation illustrates in a graphical and easy-to-understand way the interrelationships between different data sets, and can be easily applied to the concept of ‘big data’.

Financial markets and the financial services industry already make extensive use of big data analysis for competitive advantage, lending, trading, credit and market risk, compliance, and governance (both regulatory and corporate). Our new visualisation technique, known as Saturn, could help to determine problem patterns and risk in these complex data areas. And further developments already on the horizon will help predict faults and problems in a bank’s network.

BT was the official Olympic and Paralympic communications services partner for London 2012. The Games presented important network security challenges because:

• London 2012 was the first time such an event had relied on a single unified IP platform for all its network requirements, meaning any potential weaknesses could be exploited to hack into critical systems

• LOCOG wanted to give the event’s accredited journalists free and unmonitored network access, effectively making London 2012 the world’s largest bring-your-own-device experience so far.

The task of protecting the network infrastructure fell to BT Assure, the BT security and risk management division.

Round-the-clock security commenced on 1st July 2012. Phil Packman, general manager of security engineering and customer advocacy at BT recalls: “Malicious activity started as soon as the infrastructure went live and increased in line with the amount of traffic. The first concerted attack coincided with the Opening Ceremony.”

As the Games progressed, the team dealt with daily threats, detecting and deflecting all intrusion attempts. In fact, during one early attack there was a peak of 11,000 malicious attempts per second on the network.

“Our work was part of a much wider effort to protect UK plc and the Olympic and Paralympic brand for the duration of the Games,” concludes Phil. “I’m delighted to say it was a complete success.”

Security innovation in action: London 2012

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3. VoiceInnovation in voice technology has been a key focus area in the industry for a number of years. The key question is: “What’s next?”

There’s an opportunity now to unify the voice towers of PBX, IVR, Trading Room and Contact Centre. A vital part of this evolution will be to simplify and unify the voice estate across many different technologies and suppliers. The continuing regulatory burden in many areas means that both the actual voice technology and the storage (and retrieval) of the message are important considerations.

Our overall approach to the enterprise voice estate protects investment in legacy assets, avoids vendor lock-in, exploits open standards and uses commoditised hardware and software, and presents massive carrier and mobile services rationalisation opportunities. It incorporates industry best practices through the deployment of a comprehensive design, build and operate framework, establishing robust, consistent and scalable IT processes.

The BT approach to enterprise voiceThis framework leverages the investment in fixed assets, is technology neutral and avoids ‘lock-in’ to proprietary technologies. It uses standardised commodity hardware and software and achieves dramatic cost savings in equipment, maintenance, trunking, transport and toll costs.

It can be deployed centrally or decentralised, and as virtual or physical voice services across regions, business units and multiple legal entities. As well as quickly provisioning business as usual services, our model enables innovation to help exploit new customer channels and provide competitive advantage.

The BT enterprise voice reference architecture can deliver the technology services, infrastructure functions and support services management in phases. This means that organisations can blend their existing legacy voice estates with new options and new ways to communicate, both internally and with customers. Overall, this aims to deliver new service models at lower price points.

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Authentication

Contract management

Incident management

Service account management

Account management

Authorisation

Licensing

Logging

Messaging

Data management

Event handling

Features/Services/Applications

Session management

Network and infrastructure

Trunking and transport Resources

End points – Hard and soft devices

Addressing and numbering plans

Security (data protection, monitoring, threat prevention)

TEMSCost controlChange control3rd party managementInvoicing/accounts payableVendor managementEscalationsBilling and invoicingCentral reporting

Faults/outagesProactive, predictive monitoringNotificationsEscalationsOrders & changeManagement adminSecurity event management

Order desk User/Admin portalProvisioning(MACs)InventoryAsset managementConfiguration managementTechnical engineeringService reviewsSLA performanceCapacity planning and analysis

Executive relationshipsIn-country contactsNew business developmentInnovations primeExecutive channel development

Rules, logic and policy

Common abstract data model

Technology services

Support services management

Infrastructure functions

The BT approach to enterprise voice

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4. CollaborationThe rapid growth of collaborative tools for both consumers and businesses is being driven by technologies such as social networking, instant messaging and video conferencing. The maturing and commoditisation of these technologies has provided ubiquitous access to work collaboratively both inside the organisation and with customers.

Many of the collaborative tools are those that we use as consumers. The spread of smartphones and tablets has produced high quality cameras at a price that means they can be widely adopted. People now regularly use these devices to talk to family and friends and this will become another channel for banks and financial services organisations to communicate with their customers.

These tools are becoming mainstream and it’s vital that banks start planning for these new ways of communicating with their customers as they seek to either improve customer service in the branch or to create additional sales opportunities.

And this is not a local phenomenon. These trends are global in nature, although actual implementation varies country by country. For example, China has a high degree of tablet computing adoption; whereas in Russia it’s the smartphone. In Europe there are some differences between countries, but the general trend is to use collaborative tools across various devices to better connect with customers.

There are also similar options for professional collaboration in the corporate environment, with products such as Teleprescence. This allows for multi-participant,

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multi-location virtual meetings and is being widely used in banks and globally dispersed trading rooms in particular. Many collaborative tools already exist in the social networking world, from Facebook to Yammer and several in between (in fact the recent Microsoft takeover of Yammer is a very interesting development as it enables collaboration between users of Microsoft products and advanced social networking tools like Yammer on a much larger scale).

These tools are becoming an increasingly important aspect of the way that businesses communicate and engage with consumers. These new channels can, for example, alert banks to early service issues, helping to limit brand impact.

Using technology to work collaboratively can help create a competitive advantage for banking and financial services organisations. The challenge is to turn fixed, conference, mobile and away

workspaces into workspaces that require little context switching. This avoids the problem of having too many applications open on a desktop,

provides seamless and timely access to customer channels, and enables teams to collaborate simultaneously across

different timezones.

These technologies can dramatically improve client collaboration by, for example,

connecting to remote experts, such as relationship managers or regionally

based mortgage specialists. They can easily and instantly work together using a variety of tools to provide answers and help customers

understand products and services. The organisation can also meet

various line of business compliance requirements, such as illustrating responsible lending, by recording and retaining documents that demonstrate customers have understood what they were agreeing to.

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So how do I make the most of this new technology?BT has a broad and deep set of innovation capabilities that it can bring to its financial services clients. These include a number of high profile research centres around the globe where world class teams develop new solutions to customers’ business problems; the Global Scouting team based in Silicon Valley, for example, identifies new technologies, trends and business models for our customers. We also have very strong links with a number of leading universities, including Cambridge in the UK, Massachusetts Institute of Technology (MIT) in the United States and Tsinghua in China.

Our partnership with MIT includes basing the ‘BT Disruptive lab’ on the MIT campus. And we have other research labs in China, Malaysia and Abu Dhabi.

BT also leads the India-UK Advanced Technology Centre, a consortium of 22 Indian and UK industry and academic partners conducting breakthrough research into current and next generation fixed and wireless communications. We can help define and illustrate potential solutions through our Applied Technology centre with a hothousing approach that typically involves an intensive three-day workshop to develop propositions or solutions.

BT Advise Horizons We have a well-developed method to help you achieve your aims – the envisioning approach. This provides a range of options to help start planning for the future based on the systems in place today.

We can deliver a staged approach for this through a consultancy-based roadmap incorporating three levels: for a rapid, targetted or strategic approach. Overall we will:

• assess business opportunities and threats to design the future state• determine targeted capabilities, dependencies and priorities• identify gaps and possibilities enabled by technology• align to long-term goals and short-term requirements• plan from the future state to determine interim situations and goals• define training, governance and adoption to achieve best practices• produce actionable short-term, mid-range and long-range plans.

This consultancy approach will deliver an agreed roadmap for the next few years. It will detail an overall direction for the business outcome desired. This approach, combined with our thought leadership and deep understanding of the financial world, can help prepare for the complex environment ahead.

We can support the entire consult, design, build and run lifecycleWith our breadth and depth of business and technical expertise, we take a business-focused approach that goes beyond the technology and provides a path to realising genuine business value.

Our design will take into account internal and external, multi-domain and multi-vendor considerations as we develop the roadmap. We’ll work with you to determine how to deliver against the roadmap, help bring in other resources, partner with internal and external parties, and perform the lifecycle activities you want.

We are vendor and technology agnostic and understand how to exploit business and technology trends that will help you achieve your business goals.

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Summary1. There are a number of emerging technologies that finance and banking organisations

can deploy to improve service and operations.

2. The four key areas we’ve identified are:

• infrastructure virtualisation • security visualisation tools • voice • collaboration tools

3. These can significantly reduce and transform cost, mitigate risk, improve performance, address growing compliance needs and provide the flexibility to respond quickly to rapidly to changing market and business needs.

4. BT is at the forefront of communications technology innovation, with world-renowned research and development centres dotted around the world.

5. Our tried and tested consultancy approach will provide a clear roadmap for you to achieve your technology vision in the most effective way and with the focus very firmly on the business benefits.

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The telecommunications services described in this publication are subject to availability and may be modified from time to time. Services and equipment are provided subject to British Telecommunications plc’s respective standard conditions of contract. Nothing in this publication forms any part of any contract.

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