Prudential - less than prudent with customer details

Prior to Christmas the UK's HM Revenue & Customs lost the personal details of millions of child benefit recipients, and the latest data management debacle by institutions that consumers entrust with their data is Prudential, which has been less than prudent with their wealthiest customers' personal records.

According to the latest reports, a box containing premium customer details, including cheques and other sensitive information, was found on a roadside near Reading Berskhire by a vehicle recovery driver.

Apparently the box fell to the side of the road when it was being transported from Prudential's offices in Reading to a "secure" facility in Essex. In this day and age with electronic data storage facilities, image scanning and remote backup of data available, it seems astonishing that personal customer information is still being transported in paper format in boxes.

Even if the box had not been lost on the side of the road, anyone transporting the information could have easily photocopied some of the sensitive documents and used them for fraudulent purposes.

It begs the question, why are government departments and financial service providers opting for the least expensive and less safe option when it comes to protecting customers' personal data? There are really no excuses for these organisations who we entrust with our personal information to be reliant on such antiquated systems when it comes to data storage and protection. What is it going to take for these organisations to take data protection more seriously?

'Tapping' into new sources of data

With Ger Rosenkamp having steered the helm of Asset Control, transforming the privately-held company into a leading provider of centralized data management solutions for time series and reference data, what can customers expect from new CEO Phil Lynch?

Rosenkamp announced he was stepping down as CEO and president following his sale of a majority stake in his company to Fidelity Ventures and the appointment of Lynch, ex-CEO Reuters Americas and a Fidelity venture partner, as the new president and CEO of Asset Control.

Lynch says his initial focus will be on integrating the TAP Solutions acquisition with Asset Control, which will see its TAPMaster solution for data accessibility act as a downstream "data mart" to Asset Control's AC Plus data solution framework.

He says that the TAP acquisition will give Asset Control broader operating systems support beyond Unix and Linux as the Vancouver-based company's data accessibility solution leverages Microsoft.Net technology, which is likely to appeal to smaller-to-medium sized firms seeking a "simpler" solution.

Lynch also wants to build what he termed, an "ecosystem" around key product lines within Asset Control and to partner with data providers to build "out-of-the-box" standardised market data feeds from leading providers such as Thomson Data Corporation, S&P, Reuters and Bloomberg, which can be implemented more quickly.

I asked Lynch whether he would maintain Asset Control's focus on its 'hybrid' data management approach combining in-house software with outsourcing of services. His response seemed to indicate that at this stage, outsourced data management is not a top priority.

"Companies have been slow to take up outsourcing. I don't think the market as a whole is ready yet. Distribution of data is highly dispersed and not easy to 'ring-fence', which makes it difficult to outsource."

Having said that, Lynch said Asset Control would continue its partnership with Accenture's Managed Reference Data Service, which leverages AC Plus. "We also want to look at business process outsourcing opportunities as well, but that is more a long-term investment."

One question I was dying to ask, was Asset Control's participation (or lack of) in the Enterprise Data Management Council, a grouping of data management vendors including GoldenSource, Cicada and SunGard, which aims to help firms move to a more horizontal enterprise-wide data management framework.

Asset Control has always touted its centralised data management approach and Lynch appears less than enamoured by the EDM Council. "We are not planning to participate [in the Council]," he said. "We have to understand the benefits of it and how it is going to help 'move the needle'. I am not convinced of that yet. But I am open minded." Outgoing CEO Ger Rosenkamp chipped in saying that while EDM has value, he believes Asset Control's Customer Advisory Board, which influences most of its product development strategy, goes beyond the level achieved by the EDM Council.

The SQL debate continues

In response to my earlier post on the debate surrounding the use of SQL in complex event processing (CEP) applications, Mark Tsimelzon, CTO of CEP vendor Coral8, has written something himself on the subject entitled, CEP and SQL: The Top Five Myths.

Make your own minds up.

The SQL debate

Having opened a veritable 'can of worms' with my post dated the 2 March entitled, Event Processing gets 'complex', my curiosity regarding the debate surrounding the use of Structured Query Language (SQL) in some complex event processing (CEP) applications, was further aroused.

The debate that post generated can more or less be summed up as the pro-SQL vs non-SQL camp, with CEP vendors like StreamBase Systems putting its case for an SQL-based standard for querying real-time event streams and stored data, while other vendors such as Kaskad and Progress Apama stated that there was little support for a SQL-based standard for event stream processing (in terms of companies offering this approach).

That may well be the case, but if so many CEP vendors do not support SQL, it made me wonder why some were sticking to their guns and implementing SQL-based languages anyway? I was interested to read an article penned by John Morrell of complex processing software provider, Coral8, reproduced on the Complex Event Processing web site.

Coral8 has developed an SQL-based Continuous Computation Language. In the article Morrell writes, "This [SQL] provides a familiar programming environment, speeding the creation of event processing applications." He later adds that as SQL is a 'pervasive' language, it lowers the learning curve for developers of CEP applications.

So there you have it. The highly competitive CEP space is dominated by vendors pushing different approaches, and after all choice is a good thing. But is there a right or wrong approach, and can SQL in CEP applications be discounted altogether if it does do what its proponents say it does in terms of speeding up development?

Event processing gets 'complex'

The latest IT bandwagon that vendors are jumping all over is complex event processing, which promises to help firms make rapid decisions on streaming data (tick prices, for example)that is "constantly changing".

It is lumped into the broad category of 'business intelligence,' which is seeing a lot of activity of late with Oracle announcing its $3.3 billion acquisition of business intelligence (BI) vendor Hyperion, which it will combine with its own BI software to provide customers with tools for collecting and analysing information about their business.

What is the big deal about BI and complex event processing? Every firm has reams of customer, logistical and transactional data stored in silos, but this data is meaningless unless firms can glean some form of intelligence from it and use that to enhance customer service levels or gain a competitive advantage.

Event processing (EP) has found a natural home in the capital markets, where according to Brad Bailey, a senior analyst at Aite Group, "[it] has made an impressive showing in the algorithmic and strategy trading areas, and EP solutions are now migrating to other areas of the capital markets, such as data monitoring, compliance, Transaction Cost Analysis (TCA), risk management, proprietary data derivations, market making, and others."

A number of vendors are now claiming that event processing software is a 'must-have' component of firms' preparations for MiFID particularly when it comes to intelligent order routing and demonstrating best execution

Yet, making sense of what vendors are really offering in the event processing (EP) space is fraught with difficulty as not all of the firms in this space are specialists, they have merely added on BI or EP tools to existing data management applications.

Phil Howard, research director at Bloor Group cautions that "misleading claims" are being made about performance in the CEP space. There are claims and counterclaims about the speed and performance of various EP applications. There also appear to be some deep-rooted philosophical differences between vendors, which is only adding to the confusion for firms contemplating event processing for the first time.

Streambase Systems, designed its own language (StreamSQL) which adds time and event-based windows to standard SQL (Structured Query Language)to support live time queries on event streams. SQL has been used for many years to access and manipulate database systems.

Barry Morris, chairman and CEO of Streambase, says there is no other candidate than SQL, which is more widely used and understood than some of the proprietary technologies and languages competitors are developing.

Critics of SQL say it is not up to the job of performing real-time queries on streaming data, yet Morris maintains that it hasn't encountered any problem it hasn't been able to solve using StreamSQL. "StreamSQL allows firms to access static data that is on disk or in-memory in the same way that they access real-time data," he says. He claims that an "old fashioned" 'rules-engine' type approach, which some of its competitors offer, does not know how to handle static data.

Crossing the divide

Analyst firms such as the Aite Group have been critical of the Enterprise Data Management or EDM Council, formed in 2005 by BearingPoint, Cicada, GoldenSource, IBM and SunGard, saying that its success depends on expanding its current user base. Well, someone appears to be listening.

Today the Council announced three new sponsors; ADP Brokerage Services, Deutsche Bourse/Avox, the first exchange to join the council, and the first market data vendor, Standard & Poor's. The three have become organisational sponsors of the Council, which has increased its membership from 45 firms to 76.

Leading financial institutions such as Credit Suisse, Citigroup, Pioneer Investment Management, Franklin Templeton Investments, State Street Bank & Trust, Deutsche Bank and Bank of America feature among the more than 70 financial institutions from all segments of the industry that are participating in the Council.

The Council stated that each new sponsor firm brings substantial experience in "various aspects of data processing, including client and counterparty, back office and clearing and settlement data issues that will prove invaluable as it evolves from EDM analysis to implementation of its four prioritised work streams: business metrics, best practice implementation, supply chain management and regulatory tracking.

But will it be enough to appease the analysts that say given the complexities of implementing an enterprise data management framework, EDM to date has been all talk and little action. Aite Group predicts high adoption in the EDM market this year and next, but to date, there have been few real world implementations and examples to draw on.

One glaring absence from the EDM Council is Asset Control, one of the most established providers in the data management space. Asset Control prefers the term Centralised Data Management (CDM), which has put it at odds with the Council's EDM terminology.

How significant Asset Control's absence from the EDM Council is will perhaps become clearer over time. But as Aite Group states, whilst the formation of the EDM Council is a good first step, it does not currently represent key players. "Those issues need to be worked out," it states in its Crossing the Data Management Divide 2006 report, "because the idea of a united front through a standardization council is a good one."

When is ESP not ESP?

Whenever a new concept in technology makes it onto the radar screens of analysts and a few forward thinking companies, vendors tend to want to share in some of the limelight. That is why, for example, after Gartner analysts coined the phrase, Enterprise Service Bus (ESB) and it gained significant notoriety and publicity, even mainstream EAI vendors that initially rejected the ESB concept, were champing at the bit to say, 'We've got an ESB offering too.'

It appears that the same thing may be happening in the event stream processing (ESP) space. In my last post I covered off on ESP, a relatively nascent market, and how it was being used in trading applications, logistics and company supply chains to enable companies to respond and act on real-time streaming data and events.

A word of warning, however, is that as ESP is a relatively immature market, definitions of what constitutes ESP differ from vendor to vendor. Phil Howard, research director at Bloor Group, defines an event, as "an event of some importance." In other words, an event stream processing application is not interested in every event that may occur.

Events for example, can come from transaction databases, Bloomberg or Reuters market data feeds or RFID tags on boxes of books. Event processing is also about managing exceptions such as credit card fraud detection. The next step up from that is complex event processing (CEP), which Howard says is managing 'a set of different exceptions.' "It is easiest to think of ESP as a pipe with water flowing through it and onto that pipe are placed fine mesh grills," Howard explains. "The water flows through those mesh grills, which are not fixed but interchangeable."

In its SOA maturity model, Oracle apparently puts CEP at Level 5, indicating that for most companies it is something that they consider implementing much later on if at all.

However, as Howard points out, firms can implement CEP without having to go down the service-oriented architecture route. In algorithmic trading, for example, which uses event stream processing to detect movements in stocks based on pre-configured algorithms, firms have not necessarily implemented an SOA.

Whilst event stream processing is about handling throughput of data, when it comes to complex event processing, Howard says it is all about implementing technology that can handle complex data streams. Traditional relational databases are less favored in this environment as the perception is that they fall far short of the requirements for responding to incoming data streams in a timely fashion.

By now you are probably thinking isn't ESP or CEP just another form of business intelligence? Well, yes of sorts. According to Howard, event processing incorporates real-time operational business intelligence. However, he adds, some of the core business intelligence software vendors such as Business Objects, have technology that is not "process aware", which is needed if companies want to build operational business intelligence platforms based on CEP or ESP.

Howard says some of the database vendors are looking to embed more intelligence into their data warehousing offerings. He cites the example of Sybase, which he says is looking to partner with an event processing vendor on the front end so it can offer a complete solution. IBM's WebSphere Front Office for Financial Markets allows companies to combine and filter data feeds, and although it may act as a front-end to an event processing engine, according to Bloor Group it is not an event processing solution as such. Click here for more of Bloor's insights.

Dealing with complexity

Ok folks here goes. The next big thing according to those in the know (analysts) is CEP and ESP on an ESB or SOA for real-time business intelligence or BAM. I thought I would try and cram as many three letter acronyms into one sentence as possible to show how ridiculous analysts' obsession with three letter acronyms has become.

By now you are probably thinking here we go again. First it was ESB (enterprise service bus),then SOA (service-oriented architecture), now its CEP (complex event processing). As one journalist from Information Age quipped recently at a Progress Software press event about event processing (an umbrella term used to talk about CEP and ESP-event stream processing),'Everyone is bored of SOA, we've heard it all before,' and by the way is anyone actually doing it? So is CEP or ESP just another three letter acronym destined for the same fate?

Well, unless you design trading algorithms or are a logistics company tracking goods throughout the supply chain, you probably have not heard of CEP or ESP, therefore your boredom threshold is unlikely to have been maxed out yet. And as for whether people are actually doing it, well, the short answer, very few. According to Mark Palmer, general manager, Apama division, Progress Software, the Event Driven Architecture market is currently worth $30 to $50 million, small fry by software standards.

A lot of these three letter acronymns tend to be the 'love child' of computer boffins who spend most of their lives in laboratories dreaming up great whizz bang technologies that rarely find it into every day application. You could say event processing is one of these technologies having been pioneered by boffins at Stanford and Cambridge universities. However, Phil Howard, research director at Bloor Research, believes that event processing will be widely used, but that adoption will be gradual. After all, event processing has yet to reach the peak of its hype cycle on Gartner's adoption curve before it descends into the 'trough of disillusionment'.

Having said that, Dr Giles Nelson, director of technology, Progress Software and co-founder of Apama, a Cambridge UK startup (bought by Progress) that developed one of the first CEP engines, did a good job of explaining why you may want to think about adopting event processing some time in the not too distant future, particularly if you are a business that needs to make rapid decisions on streaming data (tick prices, for example) that is "constantly changing". According to Dr Giles, putting the complexities of the technology itself aside, the nuts and bolts of event processing "is about being able to understand information in real time."

This information could be coming from multiple sources both within and outside the company, RFID tags for example on cases of goods. But Nelson made the clear distinction between business intelligence software, which tends to be based on historical data and doesn't allow someone to act on that data in real time, and ESP. Unlike conventional data management models, where data is indexed and stored and then request/response queries are made on it, if a company needs to act on information in real time, Nelson says there is no time to index data. "That is why SQL is unsuitable for this," he adds. Also vendors like Progress Software tend to favour object oriented databases as opposed to relational for ESP.

In a nutshell, ESP says Nelson, is about storing queries and then flowing data (both historical and real-time) across them. Great you say, but what would I use it for? Well, it has long been used by algorithmic traders who want to test out VWAP and other trading strategies on real-time and historical data. It could also find application under regulations such as MiFID in Europe and RegNMS in the US, where the emphasis is on achieving best price for clients and smart order routing to the cheapest execution venue. As best price is a constantly changing variable, according to Progress it is suited to ESP.

I'll have some intelligence with my data

For many years (some may argue it still is) banking was all about products, locking the customer in for life to a particular bank's you beaut online cash management application or securities servicing offering.

Ultimately, however, customers have come to realise that as the business of banking (moving money and securities around) has become commoditised, a lot of these 'you beaut' banking products all start to look the same; they all provide similar levels of functionality, albeit packaged perhaps somewhat differently.

The banks however have been a lot slower than the customers to cotton onto this. In fact, a constant gripe of corporate customers is that banks still continue to push proprietary solutions at them.

The real value for the banks is not their products, they are unlikely to admit that though. It is difficult to picture a candid banker telling a corporate customer, 'Well actually our products are mediocre, but hey our mining of customer data and how we leverage that to provide you with a better level of customer service, is amazing.'

I would maintain (that is perhaps why I am not a banker) that more banks should be having conversations like this with their customers. Banks go on a lot about how much data they collect about customers, their transaction histories. But few banks are leveraging this data in any meaningful or value-added way.

There are many reasons for this: legacy technology investments which means a lot of this data is stored in silos in different departments that do not talk to one another. It is the good old integrate your silos argument. However, the banks are not going to be able to use that excuse for much longer as a lot of the hype and promise around service-oriented architectures, data mining and customer intelligence becomes reality.

Let's be honest though, whilst banks are large users of technology and large portions of their businesses are wholly reliant on it for their everyday operations, banks have not fully grasped the real potential of intelligent and media rich IP-based technologies.

The analyst community predicts that rich media applications such as video and broadband connectivity will add a new dimension to data aggregation and management.
To some extent online sites like Amazon have given us a taster of the potential for gathering customer intelligence via the web and then regurgitating it back at us in the form of personalised information and book or DVD selections based on our buying history. Increasingly, the internet is becoming an experience that is not only interactive but tailored to our specific tastes and interests.

Why can't banking be like this too. I am not talking about simplistic banking applications that customise data pertaining to a corporate treasurer's most recent transactions or their global liquidity position. Some banks may argue it is difficult to drill down into legacy systems and provide this level of information.

However, the banking experience in general is nowhere near as interactive or engaging as it could be. It doesn't really leverage any of the intelligence that banks gather on their customers, to provide an experience that is not only richer but tailor-made to suit a particular customer's needs, whether it is buying FX, selling securities, or transferring money half way round the world.

Isn't it time that banks actually started doing something intelligent and clever with all the information they gather on their customers, customised down to the individual or group level, rather than trying to flog to customers the latest ubiquitous banking application?