Web Services in Financial Services Dr. James Gardner Financial Services Industry Group Microsoft Corporation

“The newest innovations, which we label information technologies, have begun to alter the manner in which we do business and create value, often in ways not readily foreseeable even five years ago.” Alan Greenspan Chairman, U.S. Federal Reserve

This Session Web Services: a review Web Services: a review Enhanced Web Services: the service oriented architecture Enhanced Web Services: the service oriented architecture The Services Ecosystem The Services Ecosystem

The problem… The old way: types and proprietary implementation The old way: types and proprietary implementation Tight coupling Tight coupling Fundamental premise: things will work Fundamental premise: things will work Assumption is that data is well formed Assumption is that data is well formed

… and the solution The new way: schemas and contracts The new way: schemas and contracts Loose coupling Loose coupling Fundamental premise: things will go wrong Fundamental premise: things will go wrong Data may not be well formed: web services are self defensive (internet pedigree) Data may not be well formed: web services are self defensive (internet pedigree)

Web Services Evolution Business Benefit Pre-1990s Custom, static B2B Integration Custom, static B2B Integration Early 1990s Application integration technologies appear Late 1990s Web technologies appear e.g. HTTP, HTML, XML Web technologies appear e.g. HTTP, HTML, XML Web application technology = Web services Web application technology = Web services

The result… Universal and safe interoperability Universal and safe interoperability Connectivity across process and enterprise boundaries Connectivity across process and enterprise boundaries Web services make it easier than ever before to integrate systems, processes and people Web services make it easier than ever before to integrate systems, processes and people

We see web services everywhere… Platform Identity Management Messaging/Collaboration Business Process Management Integration CRM ERP Datawarehouse / Business Intelligence CustomersSuppliers Back End / Legacy Client Facing Functions Value adding functions that the customer experiences. Support for Customer Activities. Middle OfficeBack OfficeFront Office Channel

… and analysts agree “The payoff is huge – using Web services instead of proprietary integration technology cuts the time and cost by a factor of 10” - Forrester Research March 2003 “The payoff is huge – using Web services instead of proprietary integration technology cuts the time and cost by a factor of 10” - Forrester Research March 2003 “Web services will become the dominant distributed computing architecture in the next 10 years and will eventually define the fabric of computing” – IDC, 05/02/03 “Web services will become the dominant distributed computing architecture in the next 10 years and will eventually define the fabric of computing” – IDC, 05/02/03 “Everyone should build on the XML/SOAP foundation.” - Meta Group “Everyone should build on the XML/SOAP foundation.” - Meta Group

WSI Industry initiative focused on promoting Web services interoperability Industry initiative focused on promoting Web services interoperability Open participation and membership (160+) including, customers and vendors (MS, IBM, Sun) Open participation and membership (160+) including, customers and vendors (MS, IBM, Sun)

Example: Risk Management Dashboard Schedules, company data, analysts’ reports, company reports, third-party news, pricing, and content

Example: Cost Reduction Merrill: Used Web services to consolidate multiple legacy voice response systems (> 75 million transactions/day); reduced customer response time, increased flexibility—ASP.NET, SQL Server™, VoiceXML Merrill: Used Web services to consolidate multiple legacy voice response systems (> 75 million transactions/day); reduced customer response time, increased flexibility—ASP.NET, SQL Server™, VoiceXML Used Web services to improve management of customer stock orders; increased customer satisfaction and employee and developer productivity; saved $100K – Windows® 2000, SQL Server, Visual Studio®.NET, ASP.NET Used Web services to improve management of customer stock orders; increased customer satisfaction and employee and developer productivity; saved $100K – Windows® 2000, SQL Server, Visual Studio®.NET, ASP.NET AccessAllstate.com: Used Web services to integrate five policy management systems and extend access to more than 350K agents; reduced costs for mailings, call centers; 300% performance increase — ASP.NET, Visual Studio.NET, SQL Server, Windows 2000 AccessAllstate.com: Used Web services to integrate five policy management systems and extend access to more than 350K agents; reduced costs for mailings, call centers; 300% performance increase — ASP.NET, Visual Studio.NET, SQL Server, Windows 2000

But what is the true value? Are web services just another way to do integration? Are web services just another way to do integration? If so, what is the true value? If so, what is the true value? Shouldn’t there be real business benefits, not just technology outcomes? Shouldn’t there be real business benefits, not just technology outcomes?

Web Services: more than integration? Stateless web services don’t cut it for some business transactions. Stateless web services don’t cut it for some business transactions.  Reliable, just once in-order delivery?  High value transactions between counterparties?  Transactions that span systems?  Long running transactions without atomicity?

Enhanced Web Services Reliable Messaging Reliable Messaging Security Security Transactions Transactions Processes (Orchestration) Processes (Orchestration) WS Architecture complete- vendors starting to deliver implementations WS Architecture complete- vendors starting to deliver implementations

So What? Web services by themselves are just islands of function Web services by themselves are just islands of function Add the new standards and you can describe any sort of business interaction Add the new standards and you can describe any sort of business interaction Service Oriented Architecture Service Oriented Architecture

Service Oriented Architecture Service orientated architectures are what result when you connect functional islands in a process centric way. Service orientated architectures are what result when you connect functional islands in a process centric way. Loose wiring, rapidly changing. Loose wiring, rapidly changing. Look to BPM-like platforms for the wiring. Look to BPM-like platforms for the wiring. The process itself can be a web service! The process itself can be a web service! Web services build web services build web services. Web services build web services build web services.

Service Orientation Nasdaq.com: Used Web services to extend personalized market data to traders on any device anywhere; leveraged Platform Web services, Alerts, Passport to provide better customer experience—Visual Studio.NET, ASP.NET, SQL Server Nasdaq.com: Used Web services to extend personalized market data to traders on any device anywhere; leveraged Platform Web services, Alerts, Passport to provide better customer experience—Visual Studio.NET, ASP.NET, SQL Server Used Web services more efficiently to link sales, research, and trading areas with CRM system to provide more automated and timely information to customers; sales increase of 30%, ROI of 35% in 12 months — SQL Server, Windows 2000,.NET Framework Used Web services more efficiently to link sales, research, and trading areas with CRM system to provide more automated and timely information to customers; sales increase of 30%, ROI of 35% in 12 months — SQL Server, Windows 2000,.NET Framework

SOA: Divisione Mutui “We built a solution that gives us full control over our business data, integrates promoters into all loan application processes, and transparently connects our systems to those of our partner banks. Now we are free to focus and devote our best resources to meet our customers’ needs and expectations” - Diego Locatelli: MD, Divisone Mutui

Service Oriented Architecture: benefits Makes it easy and quick to delivery capability Makes it easy and quick to delivery capability Means you can rapidly respond to change Means you can rapidly respond to change Ultimately, lets you solve IT problems in an elegant way Ultimately, lets you solve IT problems in an elegant way No longer about J2EE vs..Net No longer about J2EE vs..Net

Why Bother? The customer relationship is the most important asset The customer relationship is the most important asset Supply what the customer wants, at the time and in the channel of choice Supply what the customer wants, at the time and in the channel of choice “Know me, know my needs” “Know me, know my needs”

Removing the barriers… What if you don’t have the product the customer wants? What if you don’t have the product the customer wants? What if you don’t have the channel? What if you don’t have the channel? Can one financial institution be the answer to all the customers’ needs? Can one financial institution be the answer to all the customers’ needs?

The future… “By 2006, Web services will take hold as a competitive differentiator in business relationships and product innovation” - Gartner Gartner 2003

Services Ecosystem A business environment where every process, every service, every product, is sourced from best of breed suppliers and seamlessly integrated into a unified customer offer. A business environment where every process, every service, every product, is sourced from best of breed suppliers and seamlessly integrated into a unified customer offer. Substitute any work unit, any business process for another without change (loose coupling) Substitute any work unit, any business process for another without change (loose coupling) Source any work unit (product), any business process from any supplier Source any work unit (product), any business process from any supplier Do it dynamically! Do it dynamically!

Business Opportunity of a WS Ecosystem Ensure that your offering in the marketing is comprised of “best of breed” components Ensure that your offering in the marketing is comprised of “best of breed” components Give the customer what they want, even if you don’t have it Give the customer what they want, even if you don’t have it Differentiate based on service and how well you integrate the pieces Differentiate based on service and how well you integrate the pieces

Web Services Evolution Technology Result Services Ecosystem WS Connected Compete in the market WS Enhanced SOA Resolve IT Challenges Integration Web Services Interop Innovation

Why Microsoft Ability to Execute Completeness of Vision IBM Microsoft Gartner Group: “Major Vendor Web Services Platform Influence Magic Quadrant” HP Sun Oracle BEA ChallengersLeaders Niche PlayersVisionaries *CIO Magazine Poll Jan 03 CIOs: which platform is preferred in building Web services* Microsoft.NET 46.5% IBM WebSphere 19% Sun ONE 8.2%

“The newest innovations, which we label information technologies, have begun to alter the manner in which we do business and create value, often in ways not readily foreseeable even five years ago.” Alan Greenspan Chairman, U.S. Federal Reserve