Opening windows with the internet

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From the archive: in June 1996, with some prescience, then Euromoney reporter Felix Salmon investigated how far the net, or "internet protocols" would shake up banking.

The internet’s free technology raises questions about all the old ways of doing things. It makes communication easier than ever – both inside and outside a company – and it revolutionizes information storage and access. But who will be first against the wall when the changes begin to bite? By Felix Salmon. 

Joe Banker is feeling old – and he’s only 24. He’s just had a brand-new Sun workstation installed next to his Windows 95 PC and is unsure about what it all means. It’s got one of those clever optical mouse things attached to it. It boasts three buttons. Bill from IT was ever so enthusiastic about it in the pub last night. “Functionality,” he explained, “is all about what your machine is capable of doing. The analysts now create beautiful reports in Word 7, embedding Excel 6 charts. The rocket scientists can run extremely powerful options-pricing algorithms in half the time it would have taken them last week. And if you press shift-control-A and the middle mouse button, an instruction is sent to the coffee machine to have a fresh cup ready for you in four minutes’ time!”

Joe’s stomach begins to tighten whenever anybody comes along to install a new piece of hardware or software. He knows there’s a wonderful internal computer system which makes his life a lot easier, but he just can’t understand all the different commands, applications and error messages which appear whenever he tries to use it. Most of the time, the only thing on the screen of his ludicrously over-specified workstation is the CNN home page on the World Wide Web. That, he can understand. It won’t plot a yield curve, but it gives him what he wants.

But soon, Joe is going to come across a technological innovation he’ll actually welcome – an internal internet, or intranet, which provides a single interface for software, information, communications, etc. If 1995 was the year that banks went into the internet, then 1996 is the year that the internet goes into the banks.

At Morgan Stanley, every employee’s computer is already fitted with a Web browser. Logging-on brings up an internal home page containing internal news that is updated daily. All in-house equity research is accessible from internal servers, which drastically reduces paper and printing costs, and saves vast amounts of filing cabinet space, all over the world. Some facilities are marginally used – for example, a search engine which identifies members of staff on Morgan Stanley’s office floor plan. Others, such as a completely up-to-date internal telephone and e-mail directory, are used all the time.

There is a comprehensive and well-indexed list of Web sites relevant to employees in every imaginable part of the bank, which are available with one click of a mouse. There are discussion groups on a large number of subjects – related and not-so-related to work – to which employees all over the world contribute via e-mail. And any information that Morgan Stanley wishes to make available to clients or to the general public can easily be placed on its Web site, tagged so that all or only some people can have access to it.

The people running the system can easily tell which services are proving popular and which aren’t. Mark Kennedy, a former Morgan Stanley technology vice-president, has called this its “most overlooked benefit”. This information, he writes in a research briefing, “is invaluable. It separates the winners from the losers in the information world. Once something can be measured, there is almost no end to the ways the measurements can be used.”

All of this marks a profound shift from the over-specification which is the bane of Joe Banker’s life to, if anything, under-specification. His old desktop computer, in theory, enabled him to do about 905% of what he wanted to do but the difficulty of charting a course through the maze of options tended to restrict him to far less than 100%. Now with little more than a point-and-click Web browser, he can now do about 95%. Soon, this figure will get closer to 99%, thanks to the internet’s hottest new piece of software, Java.

Java, the internet’s own computer language, is a key element of its accessibility and appeal to users. Whenever there’s something Joe wants to do, the IT people can write a simple Java application that allows him to do it.

The openness of internet protocols means that it doesn’t matter if the employee is working on a Unix workstation or a PC – or even an Apple laptop in a hotel in Tajikistan. An in-house application written in Java can be used by any computer accessing the network. Until very recently, each application would need to be written once for each system.