Financial Services Organisations.

Introduction

Financial Services have always been early adopters of new ideas. Banks, investment banks and exchanges encourage and attract aggressive risk takers. They search for competitive advantage through experimentation and spend a lot on IT – up to 20%. With Open Source the experimentation is easy – it can be downloaded and tested with no commitment and if it is subsequently deployed throughout the organisation the licensing costs are zero or minimal.

Financial services also face conflicting challenges: containing costs, managing increasing complexity, and improving business agility. These challenges can be met using a service-oriented architecture that can be built and modified as business demands change. Linux and Open Source are ideal tools. Some of the largest financial institutions in the world are now running their Internet infrastructure on Linux server farms running Apache. Now a broader variety of applications are running on Linux benefiting from its security, reliability and performance. For example, the multichannel world of branch teller, call centre, Internet, ATM is now beginning to use Linux as its platform. Banks are using Linux based implementations across hundreds of branches, and the biggest savings will be made with both Linux-based servers and thin client desktops.

Looking at the back office, all the main office applications are available in Open Source versions and they run on Windows or Linux (that's the free alternative to Windows) – email, browsing, word processing, spread sheets, presentation and data base and they can all produce files in international standard formats or in Microsoft Formats (which you may still need for external communications). And in addition you can produce PDF format documents for free. See www.openoffice.org and www.Mozilla.org to find and download the software.

There may be many applications that you use that only run on Windows but you will usually find there are many Open Source equivalents for things like Customer Relationship Management, Website development, accounting, desktop publishing, artwork, and enterprise content management (ECM). See www.sourceforge.org, choose a category; usually you will find hundreds of potential applications. To find the most popular sort by “activity” e.g. this should show SugarCRM is one of the most popular CRM packages. Note these will usually also run on Linux so you will have the option to switch operating systems later. For ECM visit Alfresco www.alfresco.com which is being used by the American Stock Exchange and several banks.

The problem, as always with change, is deciding when to give Open Source a try or switch to it because it will take some effort and will cause some disruption. The answer is to do it when you are making changes for other reasons. So you should consider switching some or all of your systems to Open Source Software if

• you are rebuilding your website

• you are rebuilding your network to client server

• you are about to throw away some old PCs

• you are out to tender for new systems – ask for quotes to include OSS components – they should be cheaper as your supplier will be getting them for free.

• You are planning to integrate your systems with other financial systems, especially if they are using Open Source and Open Standards

• you are planning a move to Vista – it requires more memory and power so more expensive PC and more impact on the environment. Its also different so you will have to retrain your techies and your users.

• IT budgets are tight

• you want to avoid lock-in – that is finding there is a high cost to switching supplier and software products in the future.

Other organisations helping you adopt Open Source.

• All the major IT suppliers in the Financial services sector support Open Source: IBM, Unisys, Sun, CA,...

Case studies and news

Many potential case studies in Financial services are not published because of security and competitive reasons. Here are some examples but a few do not reveal the name of the institution.

Open source bunker guards finance data

www.silicon.com/financialservices/0,3800010322,39153614,00.htm

We don't use firewall because open source is already secure. Some customers do have requirements for them, so we put open source firewalls in. But, by and large, the majority of customers do not need firewalls. That's the big difference between open source and the Windows world.

Actuate Unveils the Results of its Financial Services Open Source Software Survey

http://global.actuate.com/uk/corporate/news/PressRelease.asp?ArticleId=9334

Financial Services are Bullish on Open Source says Alfresco. http://newton.typepad.com/content/mysql/index.html

Four of the top 10 banks and two of the top 10 investment managers in the world are now using Alfresco. As is E*Trade and the American Stock Exchange. At least that we know of, since it is open source and who knows who else is using it. We don't sell, people just try it.

Union Bank of California has switched from AIX to Red Hat Linux and the LAMP stack. www.theopenforce.com/2007/02/why_union_bank_.html

First and foremost always is the reliability and performance. The second thing is we wanted to be able to scale much easier than we do today... We wanted to be able to rapidly manage capacity by adding or subtracting commodity hardware.

An Internet banking system using Linux for a bank in Western Canada. www.linuxjournal.com/article/2927 M-Tech, a computer security products and services company based in Calgary describes their experience developing an Internet banking system for a major financial institution in Western Canada. Since it discusses the computer security infrastructure of this organization, the bank is not named. The system is now in production, and allows thousands of users to make financial transactions on-line.This article describes:

• What components are needed to build an Internet banking system

• How Linux made developing the Internet banking system easier

• The deployment of Linux servers as key components of the final system

Banking on Linux

IDBI Bank has a nationwide network of branches and ATMs spread over 68 cities. It chose Linux to run its core banking applications to save substantially in software licenses and hardware costs. With Linux it has the ability to modify the source code to suit organizational needs and create a robust and reliable infrastructure. by Minu Sirsalewala For full story go to http://networkmagazineindia.com/200303/cover5.shtml

IBM Redbook on Linux and branch banking at www.publib-b.boulder.ibm.com/abstracts/sg246909.html?Open surveys the current trends in branch banking, describes in detail an IBM Patterns for e-business approach to designing the branch infrastructure of the future, and provides the reader with an understanding of how and where Linux can play a key role. Banks are looking for solutions that are cost effective, provide a high quality of service, and allow them to speed new products and services to market. In addition, they need to have a flexible and open environment in order to absorb the inevitable changes that occur over time. At the same time, Linux is gaining popularity and credibility as a robust and stable operating environment for many business-critical functions.

Linux Levels the OS Field in the insurance industry
No longer bogged down in proprietary, noninteroperable environments, insurers must carefully consider the complex array of open source choices they now have. From Insurance & Technology this is a four way discussion including representatives from Microsoft and Open Source Developemtn labs.

www.insurancetech.com/showArticle.jhtml;jsessionid=DROCJYMLR5ZFMQSNDLRCKHSCJUNN2JVN?articleID=196604002

Financial institutions lead march to Linux in Korea. www.business.newsforge.com/article.pl?sid=05/12/20/2116234&from=rss

In the latest in a series of moves aimed at getting Korean government institutions to move away from their reliance on Windows and Unix and adopt open source software, two state-owned financial institutions planned to launch the country's first Linux-based Internet banking services in December. The state-owned Korea Post and the National Agricultural Cooperative Federation (NACF) have both said their systems will be up and running for Linux users before the end of December as a part of the open source software fostering projects of the Ministry of Information and Communication.

Red Hat Linux in Banking
www.stratinfotech.com/banking_software/Red_Hat_Linux_Banking_Financial_Applications.htm

The Portfolio Plus banking software application is supported on virtually all major platforms including MS-Windows, HP-UX, Red Hat Linux, AIX and Sun Solaris.

Redmayne-Bentley Prepares for the Future with Unisys and Open Source www.unisys.com/products/enterprise__servers/clients/featured__case__studies/redmayne_d_bentley.htm

Redmayne-Bentley is a regionally based stockbroking firm in the UK . It has a national network of self-employed stockbrokers who “franchise” the Redmayne-Bentley name. They needed Lower Costs, Higher Security, Continuous Availability. They transferred core applications from a UNIX based platform to an Open Source platform based on Linux and Unisys ES7000 enterprise servers. They achieved

• Speed: Transaction speeds almost 10 times faster than before

• Performance: Overnight processing has reduced from 13 hours to 1.5 hours

• Risk Reduction: Greatly improved fail-back and security measures

• On-Time Delivery: No disruption to business as usual

Switchover to Linux in India: Insurance majors to invest in Linux www.financialexpress.com/fe_full_story.php?content_id=73952

Three of the four government-owned general insurance majors in the country — National Insurance Co, United Insurance and New India Assurance — have decided to use Linux as the backend operating system on which will run their core insurance solutions.

Regent Insurance dives into Linux www.tectonic.co.za/view.php?id=672

Regent Insurance Company, a short term insurer, has migrated its existing Sun-based systems to an Intel/Linux solution with the help of Linux providers Synaq.