Hauser comes from Microsoft’s law and corporate affairs, intellectual property leadership team where she built a world-class sales and marketing organization responsible for interfacing with Microsoft’s key worldwide customers and partners in driving its intellectual property and interoperability messaging, programs and evidence through its Novell partnership.

“Microsoft has experienced double digit growth in financial services over the past several years. To capitalize on that growing momentum, we are delighted to announce Susan Hauser [to the position],” says Brian Scott, vice president of worldwide industry for Microsoft.

“She has been a strategic part of Microsoft’s success in financial services for more than a decade,” says Scott. Among her accomplishments, “she played an instrumental role in developing our first Interop Executive Customer Council focused on delivering solutions to address important Enterprise Interoperability technical challenges with 45 worldwide CIO’s across commercial and public sector customers.”

Previously, she served as Microsoft’s general manager for the New York and New Jersey district where she was responsible for managing sales, systems engineering, marketing, and consulting for 400 of Microsoft’s largest corporate customers in New York City, Westchester, Fairfield County, New Jersey, Long Island, and Upstate New York.

Starting in 1997, Hauser was responsible for winning and successfully deploying retail branch platforms and messaging across her territory to establish Windows NT as the server and networking standard, and establishing Microsoft as a key partner across Microsoft’s top financial services customers. Immediately following that, she spearheaded a customer financial services executive advisory board to capture feedback and a process for prioritizing Microsoft’s investments.

In 2000, Hauser assumed the role of financial services director for the East region, where she managed operations and key relationships with important financial services customers across insurance, banking and capital markets; driving a number of breakthrough industry solutions, such as JPMorgan Chase Internet Banking, the BONY Rufus project, State Street Fund Broker Project and PrudentialSecurities.com.

“Microsoft is delighted to further strengthen our long-term commitment and investment in the financial services industry with this strategic leadership appointment,” says Scott.

The aim, says Edmond Curtin, managing director in the legal and compliance department of Credit Suisse Securities’ (Europe) investment banking division, firstly was to acquire a system that could lock down the skeleton framework of the agreements, so it would be “in standard form no matter who was working on the document. And to lock down, so far as we could, the various variables that might be adopted in negotiating these documents.” And secondly, Credit Suisse wanted to leverage its human capital so that its lawyer resources could focus on high value-add tasks and thus be more efficient.

As Business Integrity director Richard Newton explains, rather than a firm’s lawyers having to take a previous contract and cut, edit and paste it to suit the circumstances of each new deal, “our system simplifies that task by automating a master version of the document and presenting it as a questionnaire to the user. The user puts in the heads of terms of the deal, and then the system is intelligent enough to build a fit-for-purpose, contract instance for that particular situation. So it’s complex legal document assembly.”

Crucially, adds Newton, the system automates the document assembly using only Microsoft Word. Lawyers use certain conventions in documents, such as footnotes or brackets, “to imply ‘conditionality,’ where one clause becomes relevant and another irrelevant,” he explains. And by applying some logic, using mathematical algorithms, to a Microsoft Word document, “we’ve been able to make that mark-up convention consistent and precise, so that the lawyers can mark up a document, put a bracket around a clause, say this clause is where the loan is a revolver term or whatever, and the system can work out the interrelationship between the clauses and the logic.”

And while Curtin notes that marking up a document remains a fairly technical task, requiring a particular skill set, use of the Business Integrity system nevertheless starts the move away from the reliance on expensive computer developers and programmers to create the product. It also speeds up the process of document assembly, says Newton, and adds “we’ve been able to take on legal contracts that previously were too complex to be done by programmatic means.”

In addition, with the development of Office 2007 and the changes to the underlying file structure of Word documents, “Word has moved away from RTF as the underlying file structure to docx, Microsoft’s OpenXML structure for documents, so we’ve been able to make that task easier yet,” Newton notes. For the time being though Credit Suisse is still using the RTF version, he adds.

Another aspect of Business Integrity’s offering is that the vendor has integrated its DealBuilder tool with Microsoft SharePoint. “So in addition to creating documents, we use SharePoint to give us a layer that will allow document approval processes, collaboration, workflow and document storage. We call that DealBuilder Contract Express.”

And while Credit Suisse does not use Contract Express, implementing the DealBuilder system has been beneficial in that it has forced the bank to standardize wherever possible, says Curtin. And where it comes to its more standard relationships the software has been particularly successful, since “the framework basis document that we’ve created has given everybody a clear starting point from which to begin any document negotiation,” reducing the number of iterations involved in creating a new one.

So while its business is always in a state of flux, making like-for-like comparisons difficult, “generally we think this has created efficiencies for us,” says Curtin. As regards future steps, Credit Suisse is looking at formulating a strategy for a global solution, and in doing so will apply the insights gained from the current implementation, which has been focused on lawyers and document negotiators working in London, notes Curtin. But given what is happening in the markets at present, and the need to see how that plays out, “we haven’t fully formulated or articulated that global strategy yet,” he says.

www.credit-suisse.com

First established in 1808, KAS Bank specializes in wholesale securities services.

With total migration to Windows set for completion in 2010, the bank went live in September with the initial stage in the phased rollout at its headquarters in the Netherlands. Although some applications still remain on the mainframe, KAS Bank is now up and running with Windows Server 2003, BizTalk Server 2006, BizTalk Accelerator for SWIFT, and several other components of its emerging .NET architecture.

KAS, an early adopter of the SWIFT network, now relies on SWIFT for 95 percent of the transaction processing messages needed for processing payments, settlements, and corporate actions for its customers, estimates KAS Bank CIO Pim Van der Horst.

Anywhere from 50,000 to 100,000 SWIFT messages flow through the bank each day. “This demands an environment of high availability and high reliability,” says Sheida Hadji-Ashrafi, Microsoft’s worldwide industry manager for payments.

Traditionally, KAS used a mainframe running Adabas, a database from Software AG, to handle this huge messaging volume. Over the past 20 years, the bank has built myriad applications running in this environment, amounting to 5 million lines of code. Yet maintaining and updating all of this code has proven time consuming and costly, according to Van der Horst.

Upon deciding to adopt a new approach, the bank recently set about evaluating different solutions. After extensive testing, Microsoft’s proof of concept solution topped those of its competitors in both performance and cost, says Van der Horst.

“Operating expenses [are reduced] because the bank is buying a package and not building code,” he says. Windows is “relatively inexpensive” compared to other systems, adds the CIO.

Meanwhile, BizTalk Accelerator for SWIFT is able to deliver updates for regulatory compliance automatically, reducing risk and eliminating the need for time consuming manual updates. The bank receives an annual message pack from Microsoft containing a new version of BizTalk Accelerator for SWIFT, with all the needed regulatory changes built-in, according to the KAS Bank executive.

SWIFT supports a number of regulatory standards that are increasingly important in the European market, including Single Euro Payments Area (SEPA), TARGET2, Basel II, and Markets in Financial Instruments Directive (MiFID).

“SEPA is the new driver in Europe right now,” says Microsoft’s Hadji-Ashrafi. SWIFT’s value proposition for SEPA calls for developing standards, products, and services that will provide the common denominator between competing clearing and settlement mechanisms across Europe.

TARGET2, on the other hand, is a settlement system based on the Single Shared Platform (SSP) developed by three European banks. Operating this system on behalf of the Eurosystem, the TARGET2 participants are utilizing the full set of SWIFT’s messaging services, including FIN, FIN Copy, InterAct, and Browse.

Basel II has set up requirements meant to make sure that a bank holds capital reserves appropriate to the amount of risk the bank exposes itself to through its investment and lending practices.

MiFID demands that banks confirm “best execution” in transactions, for example. “It is now easier for us to provide MiFID-related information to our customers with more data from the system,” Van der Horst says.

The back-office mainframe systems slated for phased replacement at KAS include MINT, a system from SunGard for connecting to SWIFT and a SWIFT gateway; Mercator, for mapping SWIFT messages to proprietary systems; and IBM’s Merva for sending messages to the mainframe. KAS Bank is already implementing an IBM MQSeries adapter for BizTalk, according to Hadji-Ashrafi.

The bank also has started using SQL Server Reporting Services for formal reporting. The reports are available much faster now, and queries can be created by end users, instead of just IT professionals, Van der Horst says. Up and running at KAS Bank, too, is Microsoft SharePoint to support a new portal application.

Meanwhile, a team of internal developers at KAS, trained by Microsoft, is using Microsoft .NET C# for conversion of some legacy applications to the .NET environment.

Along the way, members of the Microsoft Europe, Middle East and Africa (EMEA) team also have been working closely with KAS employees to provide expert knowledge of the various systems being implemented by the bank and to help with systems integration.

Two Microsoft partners - Atos Origin and Inter Access - have assisted with benchmarking, along with auditing of volume and reliability tests.

“Every day we are moving closer to having all operations in the new environment. We have been impressed by the performance of Microsoft technology,” says Van der Horst.

www.kasbank.com

Times have changed, and the financial services institutions that will be ready for the challenges and opportunities that lie ahead are those that rework operations now to make smarter decisions at every level of the business.

On our cover this month, we feature credit card issuers who have been using predictive analytics to aggressively monitor their businesses. In many cases, they have done perhaps a better job than other institutions of using technology to adjust business rules in ways that will help them ride shifting tides.

And there are other encouraging news stories out there, many of them in the pages of this issue.

Among our stories, we interview Bruce Livesay, the new CIO at First Horizon. The former IT head at Regions Bank, Livesay won last year’s WFS awards for his innovation deploying advanced Microsoft technologies. The CIO has a history of finding the right solutions to challenges and achieving a competitive edge.

While Livesay says the current crisis obviously places more intensity around credit information analytics and loan underwriting and processing, relationships are the key to success. That means making the decisions at every level of the business that best foster that relationship.

Microsoft’s offering on that front is gaining attention. At the beginning of this year, Gartner Research placed Microsoft in the top position of leader in its BI platforms magic quadrant. It ranked Microsoft highly in its “ability to execute, including the competitiveness and success of its BI goods and services, its viability and investment in BI, and the execution of its sales and pricing.”

Ten months later, Microsoft has continued its BI market momentum, says Rita Sallam, Gartner Research’s research director of BI and performance management.

What’s more, Microsoft’s HPC offering, that computing power thing that makes smart decision-making possible, is drawing increased interest from organizations. In our industry perspective this month, Lloyds TSB’s Ricky Higgins tells us about his overnight HPC and how it is helping his organization prepare for the opportunities ahead.

WFS: Explain why Silverlight is such a big deal.

DLG: Silverlight provides a rich development environment, in which developers can use their existing skills acquired while developing desktop applications, and utilize them to build out RIA applications.

WFS: What are some of the top benefits of Silverlight for financial services institutions?

DLG: It enables financial services institutions to leverage an existing pool of developer talent that already know C#, WPF, WCF, and LINQ. It provides for a much shorter learning curve to go from that environment to Silverlight. Skills as well remain localized to one or two languages, rather than spread across multiple languages and environments. In addition, there are huge cost savings that can be achieved given that Silverlight is based on the same core technologies as WPF, and is familiar to .NET developers.

WFS: Banks still are using the Internet for utility purposes rather than using it to sell new products. What guidance can you give as to the right approach to upgrading banks’ online presence?

DLG: Banks should choose a technology stack that allows for rapid evolution of the online experience as well as leverages the existing C# development pool. Selecting Silverlight as the technology would provide a great backbone to a bank’s online presence.

WFS: Is there a wrong approach?

DLG: Allowing the splintering of your technology choices adds a maintenance and support burden. It also dilutes the IT staff’s knowledgebase, which adds to costs.

WFS: Companies are reassessing their IT investments in an effort to dramatically cut costs. At the same time they are facing high expectations from sophisticated, Web savvy customers. How do you advise striking that balance?

DLG: Review the technology utilized within the company, and then consolidate down to a few key choices, perhaps ASP.Net and Silverlight for Web development, WPF for desktop applications, and .NET for back-end services. This allows for your development staff to focus on a single technology stack. This also makes it much easier for staff to move between projects. In addition, it keeps head count down, and it reduces maintenance and support costs while improving developers’ knowledge of the technology.

WFS: Where do you think we will be 18 months from now?

DLG: Silverlight will be as pervasive as Flash is today. It also will have gone through one, possibly two iterations. Functionally, Silverlight and WPF will have merged closer together, perhaps even become a single environment. This will make it possible to build in either and deploy in the other. Silverlight applications also will no longer be a prisoner of the browser. It will run from the desktop, like a traditional application, with all of the hooks to allow for updates to be pulled and deployed automatically to the environment. Deeper integration with technologies like WCF, elements that we take for guaranteed in WPF, will be available in Silverlight, i.e., the Visual Brush. The demand for more and more applications to be run from the Web, verses needing to be installed on the desktop, will increase and Silverlight will have stepped up to the demand, offering a seamless user experience.

www.eikospartners.com

WFS: How is the environment your clients face changing?

MF: Recent and upcoming industry changes - such as IFRS phase II for insurers, C3 Phase III and PBA in the U.S., and introduction of the Solvency II capital requirements and risk management standards in the European Union - are creating a more complex and fast-moving regulatory environment for insurers across the globe. From an IT perspective that means more focus on the controls, security and auditability of firms’ actuarial processes.

In addition, actuarial modeling techniques, notably Nested Stochastic, are becoming more complex as insurers’ risk management practices evolve. And this is putting more pressure on the scalability, performance and volume capabilities of the technology used to perform the calculations.

WFS: How can high-performance computing help?

MF: To date, actuarial platforms have typically been parallel processing set ups that rely on multiple networked desktops. But a desktop-based infrastructure is plagued by scalability, reliability, performance and control limitations.

Our vision is to provide clients with an enterprise server architecture that supports their processing in a centralized, secure and auditable environment. To this end, we are providing an enterprise-level infrastructure for the three key components of the actuarial software: firstly, managing the data input for the models; secondly, performing the computation of the models; and thirdly, managing and analyzing the data that comes out.

By leveraging HPC technology in this enterprise architecture, we are bringing far greater processing power and performance to the computational piece. In this way we are addressing users’ regulatory and model calculation needs, and doing so in a more cost efficient way since there is a more intelligent utilization of the hardware used to run those computations.

WFS: Why are you working with Microsoft in this area?

MF: Having a partner like Microsoft, which is able to commoditize the technology, is crucial in delivering a solution that meets our enterprise vision for those key components of the actuarial software.

With Windows HPC Server 2008, Microsoft has developed a high-powered grid and distributed processing environment that brings the robustness, reliability, scalability and processing power needed to handle today’s complex computational tasks, and they have made it available at an attractive cost.

In addition, we will be using Microsoft’s Team Foundation Server for version control and audit control of the software. We are also using SQL Server 2008, with its On-Line Analytical Processing (OLAP) technology, as our data warehouse to store and manage the data, and allow the actuaries to perform advanced and detailed analysis of the data produced by the models. In this way, the actuaries can better understand their business and thereby improve their risk management. And it is all in an enterprise server environment, as opposed to on a legacy desktop platform, which has been the norm for actuarial software over the last 20 years.

By utilizing the investments Microsoft have made therefore, we can focus on the technology layer where we add the most value, thereby enabling us to provide our clients with superior actuarial modeling capabilities in a more cost and time effective manner than if we developed everything ourselves. So while some of the technologies involved have been available for a while, the way SunGard is leveraging them in an actuarial software environment is cutting edge. In this regard, the ‘power of two’ produced by our relationship with Microsoft is enormous.

www.sungard.com

In today’s challenging environment, clients demand full data access and financial reporting that can be completely integrated with front-, middle-, and back-office operations,” says Peter Cherecwich, chief operating officer for Northern Trust’s global asset servicing business.

Northern Trust has come a long way since its founding in 1889, when it initially managed the assets of organizations and individuals in the local Chicago area. Northern Trust first stepped into the insurance arena in 1891, establishing the industry’s first life insurance trust. The company then launched an employee life insurance program in 1912 and an employee pension plan in 1913.

Today, with 85 offices in the United States and 18 international offices worldwide, Northern Trust provides banking, investment management, asset and fund administration, and fiduciary services to insurance firms and other corporations and institutions throughout the globe.

Over the years, the company has added a number of specialized services for customers such as accounting outsourcing, institutional market funds, securities lending, a global real estate fund, and cross-border pooling.

About two years ago, Northern Trust concluded it would gain competitive advantage by offering a financial accounting and reporting outsourcing service specific to the insurance industry. The company then embarked on exploring technologies to support such a service.

After a search process that took well over a year, Northern Trust opted to go with a Microsoft .NET-based solution, partly because so many end users are already familiar with the Windows-based PowerPoint and other software applications in the Microsoft Office suite.

Since June of this year, Northern Trust has been working with Pendo Systems and members of Microsoft’s Financial Services team to implement the solution among several small insurance firms, which are now at varying levels of deployment.

Hosted by Pendo Systems, the solution now emerging at Northern Trust uses Pendo Systems’ .NET-enabled
BasisPoint software to allow end users direct and immediate access to information about their companies’ investment holdings from their desktops.

“Information flows in and out between customers and the asset managers,” says Pendo Systems president and CEO Pamela Pecs Cytron.

According to Northern Trust, Pendo Systems was selected over two .NET-enabled rivals because of its support for sophisticated accounting operations, its quick ramp-up time, and the scalability of its SQL Server-enabled database engine and other components.

“Pendo is able to support multi-currency, multi-company infrastructures and multiple books of record for our clients, who have complex legal and regulatory requirements,” Cherecwich says.

“There were time-to-market issues, too,” says Cytron. “Northern Trust wanted to be able to begin delivering the new services quickly.”

Each component in the BasisPoint engine can be distributed to multiple machines, which have been tuned specifically to the needs of the components. Features for cross-enterprise functionality include front-office order management and trade processing; back-office accounting and operations; comprehensive reporting with data analysis; and straight-through processing from front office to back office.

The software also supplies myriad capabilities specific to investment accounting, such as time-sensitive accounting value storage, auto correction with unwind-rebuild functionality; batch cycle independence; and Industry Standard Calculation Library - TIPS.

For desktop flexibility, BasisPoint uses the XML protocol for communications between the database engine and client software. Pendo Systems’ XML DTD is able to convert information into formats such as HTML, for Web browser access.

Other user interfaces also can be created, ranging from text-based interfaces to complex desktop software written in development languages such as Ajax and Microsoft’s C#.

On the server side, the software supports the SQL Server 2000 and 2005 databases and both the 32- and 64-bit editions of Windows Server 2003.

Northern Trust expects to perform full lab tests on Pendo Systems’ solution some time after the start of 2009, and to go live with the service about a year from now.

“BasisPoint is helping Northern Trust to give our clients the freedom to focus on what really matters,” says Cherecwich.

www.northerntrust.com
www.pendosystems.com

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What Is Authentic Learning?

Students say they are motivated by solving real-world problems. They often express a preference for doing rather than listening. At the same time, most educators consider learning-by-doing the most effective way to learn. Yet for decades, authentic learning has been difficult to implement.

Authentic learning typically focuses on real-world, complex problems and their solutions, using role-playing exercises, problem-based activities, case studies, and participation in virtual communities of practice. The learning environments are inherently multidisciplinary.

Students immersed in authentic learning activities cultivate the kinds of “portable skills” that newcomers to any discipline have the most difficulty acquiring on their own:

• The judgment to distinguish reliable from unreliable information
• The patience to follow longer arguments
• The synthetic ability to recognize relevant patterns in unfamiliar contexts
• The flexibility to work across disciplinary and cultural boundaries to generate innovative solutions

Learning researchers have distilled the essence of the authentic learning experience down to 10 design elements, providing educators with a useful checklist that can be adapted to any subject matter domain.

1. Real-world relevance: Authentic activities match the real-world tasks of professionals in practice as nearly as possible. Learning rises to the level of authenticity when it asks students to work actively with abstract concepts, facts, and formulae inside a realistic—and highly social—context mimicking “the ordinary practices of the [disciplinary] culture.”
2. Ill-defined problem: Challenges cannot be solved easily by the application of an existing algorithm; instead, authentic activities are relatively undefined and open to multiple interpretations, requiring students to identify for themselves the tasks and subtasks needed to complete the major task.
3. Sustained investigation: Problems cannot be solved in a matter of minutes or even hours. Instead, authentic activities comprise complex tasks to be investigated by students over a sustained period of time, requiring significant investment of time and intellectual resources.
4. Multiple sources and perspectives: Learners are not given a list of resources. Authentic activities provide the opportunity for students to examine the task from a variety of theoretical and practical perspectives, using a variety of resources, and requires students to distinguish relevant from irrelevant information in the process.
5. Collaboration: Success is not achievable by an individual learner working alone. Authentic activities make collaboration integral to the task, both within the course and in the real world.
6. Reflection (metacognition): Authentic activities enable learners to make choices and reflect on their learning, both individually and as a team or community.
7. Interdisciplinary perspective: Relevance is not confined to a single domain or subject matter specialization. Instead, authentic activities have consequences that extend beyond a particular discipline, encouraging students to adopt diverse roles and think in interdisciplinary terms.
8. Integrated assessment: Assessment is not merely summative in authentic activities but is woven seamlessly into the major task in a manner that reflects real-world evaluation processes.
9. Polished products: Conclusions are not merely exercises or sub-steps in preparation for something else. Authentic activities culminate in the creation of a whole product, valuable in its own right.
10. Multiple interpretations and outcomes: Rather than yielding a single correct answer obtained by the application of rules and procedures, authentic activities allow for diverse interpretations and competing solutions

Authentic learning may be more important than ever in a rapidly changing world, where the half-life of information is short and individuals can expect to progress through multiple careers.

Conclusion

To be competitive in a global job market, today’s students must become comfortable with the complexities of ill-defined real-world problems. The greater their exposure to authentic disciplinary communities, the better prepared they will be “to deal with ambiguity” and put into practice the kind of “higher order analysis and complex communication” required of them as professionals.

Sunil Abrol is the principal trainer at www.GlobalTechnologiesTraining.com developing & delivering custom training for clients.

Heritage uses Excel spreadsheets to support core parts of its business. The company turned to Finsbury Solutions because it wanted a greater level of enterprise-wide audit control of its spreadsheets. Heritage’s acquisition by US-based Argo Group earlier this year, meant Heritage needed new controls to comply with Sarbanes-Oxley legislation, which requires specific controls of the financial reporting process.

Key elements of Spreadsheet Workbench include: an enterprise-wide multi-user repository with full version management of spreadsheets; comprehensive security and access control; a complete audit trail and exception repository; powerful analytics for spreadsheet comparisons; advanced business logic validation; a spreadsheet development framework that enables users to develop robust spreadsheet applications.

In addition, for organizations deploying Microsoft Office SharePoint Services 2007, Spreadsheet Workbench provides the most fully integrated solution for managing spreadsheet risk.

Heritage was introduced to Finsbury Solutions via the Microsoft London Market Network, an organization for which Finsbury Solution is a co-founder. The Microsoft London Market Network is a Microsoft-led group of software and service providers who offer pre-integrated software solutions to the insurance market based on a common Microsoft technology platform.

In addition to Finsbury Solutions, other founding members of the group include Sequel Business Solutions, Moore Stephens, CIBER, K@, and Meridio. The group represents some of the main technical areas within the London Market, including collaboration, CRM, workflow, records management, risk management and spreadsheet compliance, business performance management, and underwriting and broking applications.

Finsbury Solutions has also been appointed to the Microsoft Office Development Advisory Council, meaning it will advise on the next generation Microsoft Office system.

“We are delighted that the Microsoft London Market Network is delivering significant business value to our clients. As a co-founder of the London Market Network, Finsbury Solutions plays an important role in our industry solution,” said Bruce McKee, insurance industry manager at Microsoft. “Spreadsheets are increasingly used to support business critical functions and Spreadsheet Workbench’s market leading capabilities combined with its use of SharePoint delivers the high levels of operational control insurance firms require.”