OK, OK, I lied, but that was the only way I could get bank executives to read a technology missive. This article is really about the eXtensible Markup Language (XML) and why it is likely to be the most profound technical innovation in the first decade of the new millennium.
So listen up: XML is going to materially impact your bank, and you need to understand what it is and how it will affect the delivery and cost of information technology services.
Let’s start by understanding what XML is NOT. It is not a programming language. It is not a financial standard, and it is not a programming interface description. Think of XML as a set of rules and grammar that define a way to communicate. The communication is between computers, and the rules make the specifics of hardware, networks, programming languages, and operating systems irrelevant. If XML had existed in biblical times, the Tower of Babel would have been the Tower of Understanding.
Hopefully you are now getting the drift of XML’s potential. A few Gonzo issues back, I wrote about how the complexity of banking systems is limiting the choice of new systems available to bankers. (see Why Banks Are Not Changing Core System Vendors) In this article, I illustrate how banks are less and less willing to change systems because of the significant effort (read high cost and risk) of integrating the various disparate pieces. Well this is exactly what XML technology is designed to facilitate — communication of information among computers without regard for type, style, brand, or flavor.
A typical mid-sized bank uses between 60 and 150 different software products. Surprised? Most bank executives think the IT staff doesn’t have enough to do, but you can be certain that keeping these products running is a sizeable task. The level of integration, or data sharing, among various products can lie anywhere between “tightly connected” and “non-existent”. In some instances, a file is exported from one application and imported by another. In others, extensive work is required to make the products interact in real-time. In most cases, there is little or no integration. Now you know why there are information islands in your bank.
The holy grail of banking information has been the ability to see all information on all customers at all points. Most of the systems described above have some information about your customers and your lines of business. Information technologists have been trying to tie the pieces together for years, with little success – in part because a business case could not be built that would attach an ROI to the project.
But what if your IT staff could take two products out of the box, install them on your network, and have them communicate with no additional work? What if you wanted to take advantage of a new commercial account analysis product and you could just buy it, install it, and begin using it – with virtually no integration cost? What if you could have products from 20 or 30 vendors and not be concerned about interoperability?
What if best of breed system strategies, previously limited to large banks with large IT checkbooks, were now open to everyone?
I know we have all heard the promise of this for years, but the “how to” has never before existed. It does now, and it is called XML. Imagine the impact on your business, your choice of systems, and the cost of delivering services to your customers. The impact is huge! So how should you and your bank begin preparing for this technology tidal wave? Get started with Carl Faulkner’s 3-Step Guide to Achieving Interoperability Bliss through XML:
Perhaps the promise of technology will finally be realized through XML. Can I hear an amen, Gonzo brothers and sisters?