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This podcast is a sneak peak of a live panel discussion that will occur on April 16, called "Visibility, Control and Evolution: Building on SOA to Meet Today's Financial Services Industry Challenges." Sign up for the free event right here.

I asked Hub about how decision makers in the finance space can be convinced to make the move to SOA.

Below is the full transcript of this podcast:

Announcer: Welcome to another ebizQ podcast.

EB: Hi, this is Elizabeth Book (Kratz), and here’s another ebizQ podcast. Today, I am giving you a sneak peek of the SOA in Financial Services Live Panel, which is going to take place April 16th. The title of the panel is called Visibility Control and Evolution: Building on SOA to Meet Today’s Financial Services Industry Challenges. And today, I have with me Hub Vandervoort, CTO of Progress Software. Thanks for being with me today, Hub.

HV: Hey, thanks for having me.

EB: And basically, a description of the panel that Hub will be on is visible at ebizQ. And he is being joined by Keith Swenson of Fujitsu, Ron Ambuter, CTO of the BPM Workstream Group at JPMorgan Chase, and Ronan Bradley is moderating. He is Principal of Lustratus Research and also an ebizQ associate.

In 2008, IT and financial services is challenged more than ever to support the business as it reacts to rapidly changing market conditions. As over the last few years, the financial services industry has become more complexed and interconnected and IT has focused on integration across business silos and with counterparties, service providers, exchanges, and regulators.

Service oriented architecture promises to meet these challenges but must first be adapted and augmented to reflect the specific requirements of financial services. So that leaves me to my first question with Hub and that is; in the broad context, SOA is well understood, but let’s talk about it specifically for the finance community. How could you potentially convince the finance or other industry vertical type company to change their data delivery methods and spend immense amounts of money on a value proposition like SOA that does provide significant risk?

HV: Yeah, I know, I think it’s a great way of thinking about it because financial services in the context of service oriented architecture does raise some very unique things that may be aren’t apparent in other industries. And so when you look at SOA adoption and SS, I think the principle concerns revolve around really three points. Where are the risks and how can you introduce -- you’re in a risk mitigated way SOA performance, particularly, Web services performance in many areas or at least certain key areas of financial services?

It’s still not at a level it would need to be to kind of meet production objectives today. So how do you deal with SOA and Web services usage in financial services so that it does not compromise those performance objectives? And then, I think, what’s also interesting is the way in which a financial services company can establish measures of success around SOA adoption so that in taking on the risk you also have a way of risk mitigating or least understanding how to, I guess some financial terminology, hedge those risks.

EB: Right. And you did mention this risk is key with financial services. And in addition to risk, they are also unique regulatory requirements associated with financial services companies. Can you discuss how control and visibility is vitally important to these organizations and how products like yours can assist with governance issues?

HV: Yeah, absolutely. And I think that there really a couple of different aspects of that. The idea of bringing about visibility in an SOA environment is, obviously, essential to financial services. But SOA really enables you to bring about better visibility because of the loose coupling and greater opportunity to inject probes, if you will, into a SOA application or a SOA environment in order that you can surveil it.

And there’s some really good examples of that both in cross market and, you know, individual organizational kind of environments. So (inaudible), for example, has used our Apama product to surveil their internal operation, a form of business exception management, if you will, to be able to see that not only are their processes running effectively but also to provide full surveillance around compliance.

And that’s one aspect of how it can be done within a single corporate environment. A broader based example of almost the same thing is the way that the FSA, the UK equivalent of the North American or US Security Exchange Commission uses that same basic approach to monitor and surveil all UK markets in real-time to detect and even stop in midstream any kind of fraudulent or irregular trading activity that might be accompanied say with an earnings announcement and so forth or an M&A activity.

So it’s very -- its not as feasible to implement that kind of surveillance and regulatory enforcement in a SOA environment. It’s actually -- SOA enhances the opportunities to do that or provide more opportunities to actually provide for surveillance.

EB: Okay. I do want to hear more about the business events aspect of what you said. And in the context of financial services and BPM, I suspect that events have something to do with process as a whole. How does all that fit together?

HV: Yeah, it does. And so, you know, while we spend more time complementing BPM in most any SOA environment by providing the service orchestration and underlying ESB and data management, data transformation kind of capability in a BPM environment. What’s unique about financial services is that BPM tends to find a more comfortable home in the back office, or mid-office type of operation, and trading institutions, or maybe in the more commercial and retail lending environments, say things like, mortgage application processing.

So those are good environments for BPM. But then when you think about front office environments that are much lower latency, much higher volumes, much more about event driven processes, there you don’t want to use highly orchestrated or model business process; a) because it wouldn’t be performing enough and b) because it needs to be more loosely coupled for scale and for performance reasons.

So to that end, what’s interesting is the perfect complement to BPM in that case, is in business exception or business event management. And by monitoring events, you actually can discover implicit process; model it in a more loosely coupled way, and then use that -- actually leverage the loose coupling of the environment to optimize process much more agilely than you could with strictly codified BPM processes.

It doesn’t say BPM is bad, but in different venues, business exception management becomes a perfect complement to BPM when the (inaudible) drivers are very different

EB: Okay. Fantastic. So this sounds like a pretty good taste of what’s to come, something that we be speaking about a little more on the April 16th panel. Hub Vandervoort, CTO of Progress Software will be participating in the SOA in Financial Services Live Panel, which is April 16th; Visibility Control and Evolution: Building on SOA to Meet Today’s Financial Services Industry Challenges. Again, that’s April 16th and you can sign up for it at ebizQ.net. We’ll provide a link for it right next to the podcast. And Hub, thanks for being with me today.

HV: My pleasure.

Announcer: You’ve been listening to a podcast presented by Elizabeth Book Editor in Chief of ebizQ. For comments or questions, please send an e-mail to editor@ebizQ.net or visit Elizabeth’s blog at ebizQ.net/blogs.

[End of Audio]

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