Chat & Collaboration Technology in Financial ServicesIndependent research study 2016

Conducted by Adesso Research

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Acknowledgment On behalf of Mindlink, we would like to thank everyone who contributed to this important survey. The insights and feedback we received have been invaluable and your support is greatly appreciated. All the commentary published in this report is completely confidential and non-attributable to any individual or firm who kindly participated in the creation of this survey.

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ContentsThe Rise of the Chief Collaboration Officer

Executive Summary

Perception of Chat and other forms of collaboration

Why do we need Chat?

Requirements for Chat Tools

Challenges

Who Owns Chat?

Recognised Chat products for the business

‘Chat Enabled Collaboration’ #CEC – does it resonate?

User Behaviours

Symphony & Bloomberg

Overall Business Drivers

Buy vs Build

Attitudes towards FinTech and smaller organisations

Research sources

Standout Quotes

Conclusion

The CCO - A holistic view and understanding across Business & IT

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The Rise of the Chief Collaboration OfficerChat – in whatever of its many forms – has emerged as an unstoppable force in financial services in general and financial markets in particular. It’s a great way of communicating– immediate, accurate and with a built-in audit trail – and perhaps more importantly connects colleagues – the ultimate collaboration tool.

But despite chat’s growing dominance over voice-based communications and email, the marketplace still hasn’t quite figured out how to manage it.

Why?

For one thing, there are a great number of channels, which can make it difficult to get a holistic view of messages coming to and going from, for example, any given trading desk. Once dominated by a single supplier, employees chat across a great number of alternative providers, many of which are designed for the consumer market, not business.

For another, the industry’s own efforts to establish a chat ‘standard’ through a single supplier backed by market practitioners is struggling to gain traction, in part because it is stretching beyond its initial remit to provide a reliable, standardised and widely accepted chat mechanism designed specifically for use in the trading and investment process.

And finally, there’s the question of ownership. Chat has long been a byproduct of other services, whether market data terminals or voice-based turret systems, handled by teams of data and telcom professionals. Disconnect it from either of these mechanisms and in practically all cases there is no natural home for chat. It’s an operational facility, like a phone or email, and yet it may handle the bulk of the revenue-generating communication.

Surely it deserves better.

This report – compiled by Adesso Tech on behalf of MindLink – looks at how financial institutions are managing and using chat. It explores current use-cases, current pain points and, crucially, current management ownership of a critical function for practically all players in financial markets.

The overwhelming conclusion is that not enough management attention is focused on this integral communications facility. With so much revenue dependent upon it – and with so much complexity attached to it – firms are simply not dedicating enough time, effort or resource to managing chat. It remains something of an orphan among the systems and services used by today’s financial institution.

The irony, of course, is that communication with clients and with colleagues within the organisation strikes at the very heart of management’s responsibilities. If the role of the CEO is to drive the firm forward then surely the time is ripe for a Chief Collaboration Officer charged with ensuring that all team members are singing from the same page, that all internal resources are used to maximum effect, and that the organisation is operating as a single entity.

Chat is the medium that can give the Chief Collaboration Officer the tools he or she needs to succeed. Stand by for the revolution.

Andrew DelaneyChief Content OfficerA-Team Group

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Executive SummaryThe adoption of chat tools in the consumer world has been phenomenal – as of 1st February 2016, WhatsApp™ reportedly has one Billion users – approximately 15% of the world’s entire population, and a 58% market share when it comes to social chat platforms. Therefore it is understandable that Chat has infiltrated the business world, so much so that some 30% of the working population admit to using WhatsApp™ for business purposes and sharing corporate information. The financial services sector, in particular, is already on board with Chat tools and it is now an ‘approved’ communication channel – although with some caveats. With regulatory compliance, security and reputation protection at the top of virtually everyone's agenda, business focused chat tools must offer significantly enhanced security capabilities (such as encryption, authentication, user & access management, MDM/EMM support, flexible deployment options etc.) as well as additional functionality, over those currently available within the common social platforms, otherwise their use will never be approved by the all-powerful compliance and procurement teams.

Even though Chat is now a widely recognised term, most of the business focused chat providers are not yet household names. Everyone we interviewed knew the name of the particular chat tool they were using, but only those who work within the communications departments were aware of the names of alternative suppliers. So while there is undoubtedly room for someone to dominate this space, the challenges of enabling the coexistence of new technology alongside legacy systems, on the rocky road to business transformation is still a huge hurdle to overcome. The continuing onslaught of stringent regulatory compliance requirements, together with the burden of managing operational risk issues, means the reasons for financial services organisations to adopt a new strategic platform need to be very compelling indeed.

Social media and personal habits are helping to pave the way to blanket adoption of Chat in the commercial world, but the business benefits have to be crystal clear in order to get sign off from the Board. That said, the potential advantages of using Chat for internal and external communications are huge, and so it is only a matter of time before many organisations, across multiple business sectors, will be relying on a robust Chat platform for the majority of their collaboration requirements.

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Perception of Chat & other forms of collaboration'Chat’ is undoubtedly a recognised and accepted term in the business sense, and has come a long way in a relatively short period of time. ‘Chat’ used to be perceived as quite a 'dirty concept' (Reference the recent highly publicised Libor and FX rate fixing scandals) and until recently was considered to be a relatively immature method of communication. But from our research, everyone we spoke to, regardless of their role & responsibilities acknowledged that Chat is much needed in the workplace. The feeling was positive as long as it is delivered on a robust enterprise-scale platform but at the same time, does not eliminate the essence of all-important human contact.

Understandably Facebook, WhatsApp™ and other social tools – who ironically probably introduced the term 'Chat' – are frowned upon and are certainly not sanctioned for business use. The vibe when asking people about Facebook and WhatsApp is that pretty much everyone used them, but were almost embarrassed to admit it. Guilty pleasure maybe…? (Read later about the ‘nation of voyeurs’). In fact the practicality and functionality of Chat platforms enabling users to communicate quickly and effectively across the globe is a really attractive proposition and is certainly one which is being adopted, albeit cautiously, within many financial institutions worldwide.

‘Collaboration’ on the other hand is perceived to be a more ‘woolly’ term. It means something subtly different to each part of the business. Unless they are working in a communications tech role, the view is that people know they need to ‘collaborate’ but are not exactly sure what that looks like in terms of the technology requirements and how this affects ingrained working practices.

According to Wikipedia:

Collaboration is the process of two or more people or organizations working together to realize shared goals. Collaboration is very similar to cooperation, and both are an opposite of competition. Most collaboration requires leadership, although the form of leadership can be social within a decentralized and egalitarian group. Teams that work collaboratively can obtain greater resources, recognition and reward when facing competition for finite resources.

Sure, we all want this, but it doesn’t just mean using a telephone or sending an email. It’s an all-encompassing aspect of not only business, but also everyday life.

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Why do we need Chat?In a world where we have endless communication tools to bring us together, we are in fact in many ways still worlds apart. We all know people who are only just starting to use email but what’s even more surprising, or maybe not, is that many of the younger generations perceive email to be ‘old hat’ or are not even using it at all!

Once perceived to be revolutionary, email too has almost become a legacy application, and is now seen as an elongated, less productive form of communication. Chat on the other hand is increasingly viewed as a far more efficient way to collaborate both internally and externally. With that said, email does still have its place - for now. In some peoples opinion - email is the modern day equivalent of a letter, telephone is an interactive device, with Chat filling in the gaps for everything else in-between.

There are evident productivity gains from using Chat, and hand in hand with this it appears to be beneficial at helping to foster a collaborative team spirit. Within one major organisation we spoke to Group Chat is perceived to be 'a strategic requirement’. Each of the Asset Management firms we met believe Chat to be integral to their entire workflow.

The trading community are long time users of the Bloomberg messaging capability, and for them, being able to communicate less formally and in real-time is a business critical requirement. With the global adoption of popular social & consumer platforms, Chat is now becoming part of everyone’s DNA, and with more and more organisations being dispersed both regionally and across the globe it appears to be the perfect solution.

"Email is not very efficient, we are pushing our users to use chat"

PRODUCTIVITY GAINS:

Access to information more quickly and effectively

Improved decision making due to access to information from multiple sources

Removal of some language barriers

Access to experts across the firm

Connect remote, mobile & globally dispersed teams

Reduce email overload

Knowledge retention in case of employee churn

Easier on boarding, training & knowledge transfer

Knowledge retained as an organisational asset (persistent & searchable)

Improved employee morale/ less churn

COST CUTTING & RATIONALISATION:

Reduced travel & meeting costs

Greater transparency cut back on duplication and time wasted on solving problems already addressed elsewhere

Less HR & on boarding costs

Reduces risks of compliance breaches/fines

Reduction of telecommunication bills e.g. VOIP

Savings on Real Estate costs through hot desking, remote working etc.

Extended life expectancy of legacy business line applications

BENEFITS OF CHAT:

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Requirements for Chat ToolsEncryption

The number one requirement when discussing Chat is encryption. This is high on the agenda for all organisations and allocating overall ownership of the actual data is a very pressing issue that needs to be resolved. Not only does the business have to protect the conversations from the wrong eyes but equally as important, empower the right people who need access to the audit trail in order to fulfil regulatory requirements. One comment about Symphony is that they were only a service provider – “we own the data” and with that comes a potentially complex compliance responsibility. These comments raise a very interesting question, exactly what is the role of the Chief Data Officer in all of this?

Regulatory Satisfaction / Compliance

The Regulators are driving and controlling the entire ecosystem within financial services. One major global bank representative said the ‘paranoia now is worse than ever, as eight out of our ten business initiatives are regulatory driven.’ All conversations must be recorded with date stamps, time and user IDs. If Chat is implemented successfully, it could in fact positively transform the entire operation by bringing together numerous communication methods into one central repository, hence making it significantly easier to monitor and maintain for everyone involved. However, it is no secret that some traders will still switch a conversation from a Bloomberg, Thompson Reuters terminal or other enterprise chat platforms onto, say, WhatsApp™ or another social Chat tool, which then results in the audit trail being completely lost. In this case, we are faced with a human behaviour issue rather than a technology one and is something currently no communication platform, no matter how sophisticated, can solve.

Persistent Chat, Real-Time Chat, Group Chat, History & Search

Whilst ‘Chat’ is widely accepted, the terms that sit below it are not as recognised, unless of course one is working within the communications space. All of the above terms are aspects of most Chat platforms which enable you to create communities where the messages cannot be deleted, search within these communities, share files and much more. All of these features are naturally expected as part of any Chat tool.

"8 out of 10 business initiatives are regulatory driven"

Exactly what is the role of the Chief Data Officer in all of this?

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User Contribution

For Chat to succeed it is essential that users contribute. One person in particular mentioned how ‘we are now a nation of voyeurs’ - we like to sit and watch and see what is going on but not necessarily participate in the conversation. Another person we spoke to mentioned how we are ‘addicted to Presence’ – seeing when people are online and then, rather than sending them an Instant Message (IM) they would ‘pounce’ and call them – this can sometimes be counterproductive. For Chat to succeed it needs to be interactive across the enterprise.

The 'go to' Communications Tool of Choice

We all accept that social media has dramatically transformed so many aspects of our everyday social and business lives. And now for the first time ever, probably all generations, across all cultures have accepted this form of communication. Chat tools in the work place were born from this shift in human behaviour and therefore the user experience of the business Chat tool, should be similar to and closely aligned with the habits people have developed in their personal lives. The ability to incorporate multiple channels including news streams and Twitter feeds etc., into the Chat platform, is also expected.

For Chat to be successful and dominate business communication channels, it needs to become second nature for the user to log on to the Chat platform, even before opening their Email Inbox, if they still have one! It needs to become their ‘go-to/must have' communications tool.

API Capabilities – System Integration

Financial institutions need to control the data and derive maximum benefit from it. Not only that but essentially any system generating or holding business critical data must be integrated into the current technology stack, and as mentioned earlier, enable data to be collected in to a central repository. Collecting and consolidating all of your data sources creates an invaluable resource, enabling more sophisticated and highly targeted marketing, up selling, and business development opportunities.

In a world where customer retention and cost reduction pressures are increasingly more onerous, the ability to pull together different systems and data sources via APIs and access them in one single place without the time-consuming and fault-prone log on/log off into various different tools is very compelling indeed. An API Capability within chat tools will enable organisations to achieve all of the above via integration into their estate.

"People are addicted to Presence"

"We are now a nation of voyeurs"

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ChallengesOne size does not fit all

It is important to recognise that there are many different communication channels, internally, between different departments and externally with other organisations and clients. Each of these have diverse requirements and although everyone is trying to streamline technology, the reality of having a single Chat tool for all collaboration is not yet considered to be realistic. There are often different Chat platforms for external and internal needs. Not only this but as with all technology requirements, IT and the business are often worlds apart and sometimes what the business wants, might not be something that IT can currently deliver, or the requirement does not even feature on their strategic roadmap.

Chat cannot replace human contact

In a world that is increasingly dominated by technology it is also vital that we do not lose the advantages that face to face human contact delivers. One major bank we talked to, shared how they had instigated a trial policy which involved 20% of the workforce, working from home, one day a week. The results of the trial were interesting and surprising. In general, the younger team members did not particularly enjoy the experience. Many are living in shared accommodation and did not have an appropriate home office facility from which to work productively and others cited feeling isolated. They missed being in a collaborative, social environment and having personal contact with their peers and mentors. While the more mature groups, in principal embraced the plan, they also felt strongly that they should be able to talk to their teams in person and did not want to be completely reliant on messaging tools for communications and collaboration. That being said working from home is now an accepted part of the modern commercial world, and as a result collaboration tools are already an essential component of the technology infrastructure and are necessary in order for home working to be sustainable and successful.

Establishing Chatiquette

Whilst we can all communicate globally via Facebook, this is generally used by friends and for more informal conversations. The danger of adopting the 'social' form of communication in the work place is that sometimes messages can be misinterpreted and you may encounter some interpretation and language difficulties – both regionally and culturally. Moreover, as yet, there is no defined communication etiquette, or ‘chatiquette’ as it is being called these days. This is an important issue which needs serious consideration given the rise in remote working and the slow demise of the traditional office, where 'miscommunication issues' could be more easily overcome or resolved given the close proximity of colleagues.

"It is difficult to measure collaboration"

"If there was one tool which answered all communication needs that would be ideal"

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Addiction to Chat

One challenge with changing the behaviour of a workforce is that you can be your own worst enemy. If the workforce has become addicted to Chat, which very often is the stated goal – and for any reason the system goes down [Chat Outages] – the workplace then becomes completely incapacitated. This has already happened within a couple of the organisations we spoke to, so a robust platform, with a well-defined disaster recovery and business continuity, plan, is an absolute must.

Legacy vs Innovation

One of the most inhibiting aspects for any financial firm to deal with, is the sheer scale of their legacy technology. Layers upon layers of systems which, over the passage of time, have all been integrated with each other, often in an ad hoc fashion has created a problem of epic proportions. Just trying to harmonise the data residing on a myriad of systems is a mountainous task and fraught with huge risks. The coexistence of legacy and innovation is always going to be a battle and is one which all the banks are desperately trying to resolve. It will also come as no surprise to many that most of the people interviewed mentioned that the software they were using at home is often far more advanced than what is currently deployed within the banks. Innovation is desperately needed, increasingly so because regulation is in the driving seat.

Security & Reputations are paramount

All financial institutions are certainly up against it in terms of making sure that all of the data from multiple sources is aligned, and at the same time, are able to meet the growing and increasingly onerous demands of the Regulators. Not only that but security is paramount and with the global reach and immediacy of digital channels, the impact on a firm’s reputation when something goes wrong, can have far reaching consequences. The reputation of the financial services sector as a whole has taken quite a battering over the past few years and there are many bridges to rebuild before trust can be restored. Never before has the need to protect this most precious of assets been as crucial to the success or failure of the financial services community.

"Our Chat platform once broke for 24hrs & everyone panicked"

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Who Owns Chat?This is a tricky question and the answers we received were different within each firm we met with. Although most large financial institutions have reasonably similar organisational structures (and with Chat being a relatively new addition to the enterprise solutions set) our findings show that it has definitely not found its placeéyet. One person in particular stated that óno one wants to own itô because then they will be responsible for the data, and thatôs not just about making sure itôs stored securely but also ensuring that all the 'Chatô exchanges are in no way discriminating or inappropriate and come with a robust audit trail capability. This is a big responsibility. With the new óSenior Managers Regimeô (SMR) directive on its way, individuals will be held personally accountable for all processes, behaviours and corresponding outcomes, for up to six years - irrespective of whether they are still with the organisation or not. Seizure of goods and chattels and together with heavy jail sentences are all part of the SMR package. Today the consequences of being negligent or 'non-compliant' are potentially enormous and life changing.

Of those we spoke to who have Chat already integrated into the business, the responsibility for it sits within a variety of different departments, including:

• Front office

• IT

• Technology Strategy

• Unified Communication

• End user, i.e. Head of Trading / Business User

This was a surprising discovery. Given the sharp focus on regulatory and compliance issues, the fact that no single group or executive team appears to have laid claim to ownership of Chat derived data was interesting to say the least. At the end of the day, this is still risk bearing information and one would have assumed that it would automatically fall under the remit of for example, the Chief Data Officer, the Chief Information Officer or even the Chief Risk Officer. However as we all know assumption is a very dangerous activity. Maybe in some firms, one of these groups may have automatically picked up the Chat data baton and taken ownership and our contributors were simply unaware of this development. Either way given the diversity of ownership the answers we received, it seems that in many cases, Chat solution looking for a much needed home.

"Nobody wants to own chat... then you are responsible to deliver to the regulators"

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Recognised Chat productss

MICROSOFT

OTHERS

MindLink – Secure Chat Enabled Collaboration (CEC) for enterprises. Leading Messaging & Collaboration platform with security, compliance, APIs and integration with Microsoft systems

Skype for Business – Unified Communication platform aimed at corporate businesses including Messaging, Voice, Video, Conferencing etc.

Now Skype for Business

Parlano MindAlign – Group chat solution that was spun into Lync (now SfB)

Yammer – Freemium enterprise social networking service used for private communication within organizations

Yahoo Messenger – Instant messaging client also offering Voice calling and integrated with other Yahoo services e.g. Mail

IBM® Sametime® – Unified Communication platform offering Messaging, Voice, Conferencing etc.

HipChat – Cloud or server-based group messaging app for team communication. It supports file sharing and integrations.

Slack – Cloud-based, real-time communication tool aimed at modern day teams with a multitude of system integrations

‘Chat Enabled Collaboration’ #CEC – does it resonate?CEC – or Chat Enabled Collaboration is a relatively new term and acronym which is being increasingly used to make sense of the multitude of Chat platforms out there and create a category into which many tools and providers fall.

‘Chat Enabled Collaboration’, describes the use of real-time chat & messaging platforms as the corporate backbone for internal communication and collaboration across an enterprise.

CEC applications have therefore the objective to combine multiple, dispersed communication channels within a firm into one digitally-enabled workplace. They put Chat and Messaging tools at the very centre of all corporate communication – creating a central workplace so to speak.

In contrast to traditional Email systems, CEC applications enable synchronous, autonomous and real-time sharing of information and knowledge.

83% of respondents liked the term CEC and find it describes the category well.

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"83% liked the term CEC..."

User BehavioursTraders are a great example when discussing the advantages / challenges / human behaviors of Chat as their use is probably the most extreme case which happens across the financial industry. Therefore they act as a great benchmark for the rest of the business.

The life of a trader is one which is fast paced and volatile. Technology is essential to their profitability and understandably it is very difficult to change the assets that they use, particularly if they are very successful and generate large profits for the firm. These coveted assets come in many guises, not just Bloomberg or Thompson Reuters terminals, but also dealer boards, telephones and the variety of other screens that currently populate the traders desk. Everyone we talked to agrees that rationalization of the trading desk real estate is long overdue and that incremental steps rather than inflicting a wholesale overhaul is the only way to encourage behavioural changes. There is a gradual shift in attitudes which is gaining momentum, but the overriding sense is that people are not quite sure where it’s all going. With the unprecedented rise in the use of technology – a major bank representative stated ‘We are no longer a bank, we are a technology shop which sells services’ – there is however no rush, with many IT departments unwilling to be first movers as there is too much at stake. They appear to be waiting to see what happens in the market and trial new technologies before making wholesale changes. In essence what they want to do is:

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• Increase productivity through improved communication• Ensure compliance via a robust and reliable audit trail• Reduce costs through technology rationalisation - without introducing new

risks to the business

Currently – ‘there are too many clicks’, ‘real estate costs are through the roof’ and 'often technology platforms have functionality which never gets used.'

"We are no longer a bank, we are a technology shop which sells services"

Symphony & Bloomberg

So unless you are already using Symphony or are directly involved in the relationship then it’s not widely recognised - yet.

Out of those who had heard of Symphony, only 14% are committed to it or intending to roll it out across the enterprise.

It is important to recognise that there are two types of communication for Chat, business to client (B2C) and business to busniess (B2B). The perception is that Symphony has predominately been designed for the former, however one of the Asset Management firms we met with, intends to use Symphony for communication across both internal and external channels. The larger banks don’t see this as an option, ‘internal and external collaboration on the same channel is not realistic’. Of those testing or trialling Symphony the overall reaction currently is neutral as understandably there are still a large number of bugs to be ironed out.

Everyone we spoke to is trying to rationalise the use of Bloomberg terminals and eliminate non-essential usage.

It is no secret within the industry that there still is a fairly large number of people who only use the Chat aspect of the Bloomberg terminal. This situation is declining and no wonder, at approximately US$1,800 per terminal, per month, this is a cost burden which the business is no longer prepared to bear. The kudos around having a Bloomberg email address is also very slowly diminishing as both the traders and the firms themselves recognise that there needs to be a significant and visible step change in their behaviour.

Let’s not get carried away though…not a single person we interviewed believes that Symphony will replace Bloomberg, even though it is available at a fraction of the cost. There are still a large number of traders who use Bloomberg for profitable execution and in these circumstances the organisations are more than happy to continue using it.

Bloomberg has been very successful in creating a community and it is very unlikely this will change dramatically any time soon. One of the experts we spoke to believes that attitudes may start to turn a corner in 2017...but as we all know whether it's a technology or human behaviour driven issue, radical changes can take many years to come to fruition.

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• 64% had heard of Symphony – some of whichare either investors and / or trialling it.

• 36% had not heard of Symphony – however allof those are not directly employed in thecommunications space.

"Personally it felt very Bloomberg - but that's the point right?"

Overall Business DriversCost Saving

Within all the banks we talked to this is a given. Everyone, across the board, has been tasked with spending less. This can manifest itself in many ways:

• Spending less on real estate assets by getting people to work from home• Wholesale rationalisation of the entire technology estate• Working ‘smarter’• Replacing human resources with new technology• Avoid unnecessary fines from regulators and audits

That being said, one person commented that; ‘Although we are in cost saving mode, there is still a lot of money being spent.’ Another said, ‘yes we are cost conscious but absolutely not at the cost of operational risk’. The Asset firms we interviewed did not see cost saving, whilst still important, as high on their agendas compared to their counterparts in the sell side.

Compliance / Control & Security

This is by far one of the most important issues which all firms are dealing with, to the point that one of the global banks we met with said that 8 out of 10 of their top initiatives are regulatory focussed. The level of concern is high with personal livelihoods and reputations at stake. Today the common mantra appears to be 'If it is not compliant, it’s not happening'. Again the Asset Managers are currently not quite as concerned with this issue, but with the imminent arrival of MiFID II it looks as if the buy side and sell side will soon be more closely aligned with regulation and compliance being a main focus.

Data & Analytics – monetization

With everyone having to get their house in order, financial institutions are also starting to recognise the true worth of data. It is one of the most valuable assets organisations, across all industries own. One bank in particular is focussed on monetising the benefits, citing if you know more about client behaviours and preferences you have a much better chance of enhancing and streamlining the services you can offer.

Cloud & Next Generation Infrastructure

Rationalization is a current ‘buzz word’ and cloud is at the forefront of this - providing that data security is guaranteed and migration is managed effectively. Next generation infrastructure is very much on financial firms minds and although innovation is happening – it is happening slowly within a few silos. End-User technology, virtualisation and Bring Your Own Device (BYOD) are other initiatives which are also being discussed.

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"If it is not compliant, it's not happening!"

Buy vs BuildFor those organisations who buy new technology rather than develop in house, it was very apparent that compliance is probably the hardest bridge for technology vendors to cross. It goes without saying that the solution must be compliant, but even so, the Compliance Officers are often seen to be, rightly or wrongly, blocking the adoption of new solutions – one person cited "because they are dragging everything out to the point we believe they are doing this deliberately to stop money from being spent at all!". Sometimes the process has taken so long that when the technology spend was finally approved the original requirement had completely changed and they had to start all over again. With cost savings and personal accountability such a high priority, and even though Heads of business and the traders can still dictate, to a certain extent, what they want, it also seems they are collaborating more closely with IT than previously seen.

One Asset Management firm we met has a policy of building all of their technology in-house so that they can commercialise it. This reiterates the point another source made earlier, that some financial firms are indeed becoming technology shops and that by commercially monetising their in-house technology investments, the profits they generate can be significantly higher than those produced by some of the more traditional areas of the institutions.

Then there were 42% of companies who do a bit of both. In reality when looking across most of the organisations we spoke to, they probably all operate in a similar way. Inevitably it is sometimes more cost effective to buy a readymade solution with 24/7 support. The problem with building everything in house is that when teams start to disperse and move on, the 'knowledge' is often lost and ongoing maintenance can become a nightmare to manage.

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Attitudes towards FinTech and smaller organisations Smaller, privately owned technology companies were once barely acknowledged or completely dismissed by the financial services industry but with the advent of the new Fintech frenzy everything is changing. Since the 2008 financial crisis, together with the influx of new regulations, banks want to be perceived as being innovative, agile and responsive. This is further evidenced by the burgeoning number of incubator/accelerator programmes being funded by financial institutions the world over, who all want a piece of this potentially highly lucrative business opportunity. How times have changed.

Providing vendors offer a solution which is easy to integrate, proven, passes due diligence, is enterprise scalable, and compliant they will now have a chance of being considered. But always beware of the all mighty compliance department, they will still have the power to scupper the deal. It was also very clear that most people we interviewed don’t like engaging with traditional 'sales people'. They want to interact with people who can demonstrate proven expertise and knowledge of their particular sector. They need to see clearly defined roadmaps to ensure the chosen partner is someone they can develop a long term relationship with. These days the upside of working with smaller firms is also perceived to be more advantageous as you typically get levels of agility and responsiveness which are often lacking within some of the larger vendors.

“We look at 300 start ups per year, 30% go to pilot, 30% get rolled out” – this is probably one of the most positive attitudes of all of the people we spoke to. This organisation in particular pairs the smaller companies up with a larger partner so that they can avoid some of the financial risk and resource capacity challenges that sometimes comes with engaging the new players.

All this said, the procurement policies remain very tough, and with compliance officers perceived to be 'holding things up', coexistence of legacy and innovation goals are often very difficult to achieve.

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"We look at 300 start-ups per year, 30% go to pilot, 30% get rolled out!"

Research Sources

Google & Gartner are by far the most influential information sources when looking for new suppliers. Virtually everyone uses Google or other search engines as the first port of call and more senior members look to Gartner Research for expert opinion. Dependence on print based media has virtually disappeared, although many referenced reading the online version when they had time, often when travelling to & from work on the train or tube.

The power of “Chit Chat” within the industry should never be underestimated. Everyone speaks to their peers both internally and externally. Although the days of people socialising every lunch time and every evening has reduced dramatically, it is still important to maintain a personal network and attend industry conferences and focus groups, as all three provide invaluable and objective insights to industry developments.

Forrester & Accelerator programmes were also mentioned but with the latter there is always the $64,000 question, will start-ups in an accelerator programme ever actually pass muster and be adopted to transform a business critical function with any financial institution. The jury is still out on this one.

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Standout Quotes“Why change when all I am getting is a modern looking device? I need more – not sure what I need and this makes it difficult to justify or get approval for change”

“They need to see and touch technology – don’t just show them”

“Compliance is the blocker for everything communication”

“Telephone is an unsecure form of communication – if it wasn’t already around, it wouldn’t be allowed”

"Level of paranoia is worst I have ever seen around the regulators”

“You want people to think it's cool, must have” – about chat tools

“People know that delivering new technology is not where they get their bread buttered”

“WhatsApp is tacky”

“Big companies fall short on agility”

“We are much bigger so internal and external communication on the same platform is not realistic”

“We are driving for standardisation”

“Innovation and utilities set the exec boards attention”

“Email is not very efficient, we are pushing our users to use chat”

“Nobody wants to own chat because then you are responsible to deliver to the regulators”

"Our chat platform once broke for 24hrs and everyone panicked.”

“We are addicted to chat”

“Allow people to download lite versions of software and then charge them for the full functionality”

“Standardisation to reduce costs”

“We use Bloomberg but we can never get hold of anyone there, they have a very integrated approach”

“It is difficult to measure collaboration”

“Speed of technology is critical along with reducing hardware on desks”

“If there was one tool which answered all communication needs that would be ideal”

“We embrace innovation but with a conservative view”

“Collaboration and chat specifically is a strategic requirement. Certainly in terms of where it sits in our business – Group chat is near strategic for the business. However we have more chat channels than is realistic – 20k.”

ConclusionWithout question, to a person, everyone we spoke to completely supports the adoption of an integrated Chat platform. But despite this, and in-spite of the overwhelming evidence of the improved collaboration and revenue generating opportunities it presents, there are still many entry barriers to overcome before Chat truly becomes our defacto 'go to' communications tool. Here are the top 10 conclusions we obtained from the very enlightening 'chats' we had with our interviewee group.

1. There is no defined owner of Chat

‘Chat’ does not yet have a home. There are so many different aspects of collaboration which have developed and emerged over a short period of time that different departments have inherited different parts. In a perfect world all collaboration tools would sit under one department, and arguably it deserves its own division. Welcome the CCO – Chief Collaboration Officer.

2. Implications of owning Chat

Perhaps one of the reasons for our first point is that whoever ‘owns’ chat then becomes responsible for all of the data that goes back and forth – that’s a lot. Not only that but they must ensure that all of the ‘chat’ going on falls within regulatory confinements and that there is no untoward behaviour. With the Senior Managers Regime on its way in, this makes this role potentially one of the most accountable roles within financial services.

3. Co-existence of Legacy and Innovation is the biggest challenge

Everyone wants to embrace chat and they know what they want from their platform. They want to move with the social media wave but in practise this is nigh on impossible. The legacy systems operating in the tier 1 banks are entrenched and the fear and reality of what might happen if you update part of the infrastructure is by far the most inhibiting issue they have. The smaller challenger banks have a huge advantage in that they can adopt and reap the benefits from innovative and modern technologies.

4. Chat is an unstoppable force

Everyone we spoke to is using Chat in their business in some way, shape or form and nearly all of them would say that they couldn’t live without out it now. However, as mentioned in the point above these systems are likely to be old and are probably not harnessing all of the benefits of a modern day chat platform. Chat in the personal world is taking over and it is only a matter of time before this is applied across all organisations, not just financial services.

5. Compliance are the gate keepers

Compliance is ruling the roost in terms of business drivers and purchasing decisions. One person believes that compliance is so tough that it is almost too much of a hassle to try and buy something. Not only that but unless a technology solution is solving or satisfying a compliance angle then there is no point in even trying.

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6. Working from home is now a fact of life

With real estate costs through the roof and improved communication ability organisations are recognising that ‘working from home’ is no longer an excuse to do the washing. In fact organisations are encouraging their staff to work from home and although the response from some younger team members might not have been too positive it is still on the agenda and inevitably will become routine for part of most employee’s working week.

7. We are yet to find a chat platform that ticks all of the boxes

Everyone we spoke to is using one or a variety of different Chat tools. In the larger organisations they believe that it is totally unrealistic to have the same platform for internal and external collaboration. The smaller firms absolutely believe that they need one platform to answer all of their requirements. As yet there is no clear stand out provider who is providing all aspects of what they need. And even more noteworthy is that in the large organisations - they are all using something different and still don’t believe their needs are satisfied.

8. Security is the key

Encryption is the most crucial part of a Chat platform. With regulation being at the forefront of all financial services organisations, the amount of data being collected is on the up and not only that but it is beginning to become stored in one central repository. The banks need to own the encryption, not the platform. Not only for regulatory requirements but security as well. Data absolutely must not get into the wrong hands, data breaches have been in the news a lot lately and it is a major concern for all organisations, not just FS.

9. What is the appropriate way to ‘Chat’?

Let’s be honest we have all received a text or email and interpreted it the wrong way. With such an informal method of communication and no defined ‘Chatiquette’ there will be instances where certain conversations may be misconstrued. Not only this but language barriers and cultures need to be overcome to develop a global standard and accepted form of communication so that Chat can be as efficient as intended. If this does not happen then in some cases Chat will be counterproductive.

10. And Finally, Great things DO come in small packages

The FinTech revolution is in full swing and finally the major organisations now accept, and in some cases prefer to work with smaller technology providers. This shift in attitude is driven by a number of factors, one of those being that consumers are much more aware and are now demanding innovation in the workplace as they are so entrenched in it in their home lives. Not only this, but the practicalities of working with a small firm often outweighed those of a larger provider – they are much quicker to respond, they are true domain experts and the product is more agile to the needs of the client.

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What else did we learn?

Approval processesGenerally, in terms of the adoption of new technologies and getting the green light to go ahead, Compliance appears to reign supreme with Procurement coming a very close second. However this is a situation, with very few exceptions, that is unlikely to change anytime soon. Unfortunately, for both the vendors and the business, invariably this means that the approval process to acquire a new system or service is often a prolonged, and sometimes, a tortuous experience. A view shared by virtually all our interviewees. And whilst almost everyone in the financial services world today accepts that more stringent controls are needed, this has proven to be very frustrating and in some cases a completely demoralizing scenario, particularly when innovation and change is so desperately needed. It does beg the question, just where would we be today if, for example, the use of email had not been sanctioned? Back then, when email was first presented to the world, somehow this highly disruptive and untested mode of communication made it through the approval process, and just look at the impact this had on the business of communications as a whole.

The most insecure device on the planetAn amusing comment, shared by a very senior bank representative was about the telephone. He mentioned that if this had just been invented and was presented to Compliance and/or Procurement for approval today it would never pass muster as it is probably the most insecure device on the planet! Could this mean that telephones will be banned within financial institutions in the not too distant future!?

Changing attitudesOne just has to look at the impact the new Challenger banks are having, making significant inroads into the once almost impenetrable domains of the mighty financial institutions. Although admittedly the Challenger firms are not constrained by layers upon layers of legacy technology or outdated processes, they have been able to embrace innovation and are providing a vastly improved customer experience that many of the more established players are simply unable to do. These firms listened to their customers and implemented new working practices supported by the latest technology that suits their client’s evolving and increasingly more demanding expectations. And it does not stop there, the same rules apply when trying to attract and retain new talent. The younger they are, the more demanding they will be. They have a very different mindset, and almost from birth these individuals are using technology in ways, that just a few years ago, would never have been thought possible. From a very early age, Chat, and other social media methods are almost 'imprinted’ in their DNA, and they will expect this, and every other new invention, to be a standard component of both their working and personal environments. Ignore these factors at your peril.

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"T

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Dire consequencesEveryone involved in financial services these days is acutely aware of the potentially dire consequences, both professionally and at a personal level, of being non-compliant (reference the Senior Managers Regime and other regulatory mandates). However the limitations imposed by many of the new regulations and changing working practices are stifling opportunities to drive change and implement much needed innovation to enable transformation in the highly fragmented financial services sector. In this age of globalisation, remote working, increasing competition and blurred lines of commercial and consumer worlds, can the established financial institutions really sit back and take a 'watch and wait approach' to Chat and other potentially game changing innovations?

Not so long ago an article published in the Harvard Business Review made a strong case for businesses to establish the role of the CCO - the Chief Collaboration Officer, "the executive responsible for integrating the enterprise”. While this concept has been on the agenda for some time, this article was one of the first to publish a reasoned argument on the pros and cons of this very important topic. What is very interesting, is that despite all the discussions that have taken place around the benefits of better collaboration capabilities, some three years on, it appears only a few companies have actually embraced the idea and gone on to create a full (part-time, or a virtual) CCO role. It is also fair to say that 'collaboration' is no longer a buzz word and its importance is increasingly being recognized by all industries, not just financial services. Without doubt collaboration has been proven to positively underpin daily operations within many businesses across the globe and managed properly it will also deliver; greater revenue generation opportunities, improved customer satisfaction, lower costs, increased employee morale and retention. If this is true one has to ask ....what exactly is everyone waiting for?

In reality, the route to produce truly effective collaboration strategies is fraught with difficulties and is at the mercy of many influences, both internal and external. Today, like never before, anyone taking a holistic view of collaboration in an effort to create compelling business and communication strategies needs to take into consideration a complex mix of business and human requirements. These include not only the technology - but also encompasses long established working practices and differing humanbehaviours, many of which cross the boundaries of the numerous business silos that stillexist within most financial firms. Breaking down these silos to achieve a common goal forthe greater good of the enterprise is far from easy to achieve. In order for this newapproach to succeed, the people tasked with creating and implementing moderncollaboration strategies must be given far greater powers and a mandate from the highestlevel.

To help accelerate the adoption of Chat requires a vocal and prominent ‘first mover’ to do two very important things. The first is to publicly evangelise the many benefits that Chat delivers, and the second is to appoint a completely new breed of business leader who is fully empowered to spearhead the charge. This individual will have a very interesting set of challenges to overcome but given the right support, who knows, soon we may finally be seeing the emergence of a new C-level executive, in the guise of the Chief Collaboration Officer.

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"They need to see & touch technology"

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Security

Chat & Collaboration Technology

LegacyPlatform

Data Mining

Voice & Videos

Unified Communication

Big Data

Innovation Technology

On Premise

Third-PartyTool

Adoption

Compliance &Archiving

Remote Working

CloudSocial Media

Email

Encryption

LegalHold

Rules & Regulations

Mobile &BYOD

Data Storage

Portals

The CCO - A holistic view and understanding across Business & IT

Sponsored by MindLink

MindLink, leading provider of secure Chat Enabled Collaboration (CEC) for global businesses, commissioned this independent study regarding the use of chat & collaboration technology within the financial services sector.

The qualitative report was designed to gather objective feedback as to executives’ views on collaboration technologies, user adoption, ownership, priorities for 2016/17 and internal communication challenges, interviewing senior business executives of tier 1 financial companies including buy-side and sell-side firms, investment banks, asset managers and inter-dealer brokers in the UK and US.

"We work with many financial firms, half the Global Systemically Important Banks (GSIBs) for that matter, and whilst chat & messaging are engrained in this sector as a real-time collaboration tool, to share research or execute trades, similar questions, needs and challenges persist,” says Annekathrin Hase, CMO at MindLink. “We commissioned a market research report to get first-hand, objective views as to what collaboration technology financial firms need & want”.

MindLink is a secure Chat Enabled Collaboration (CEC) platform for global enterprises. Think WhatsApp™ or Slack but for corporate use.

MindLink offers all modern collaboration features: instant messaging, presence, group chat, file sharing & archiving, as well as data security, compliance archiving & business integrations via chatbots/connectors.

It also integrates with UC platforms such as Microsoft Lync & Skype for Business & elevates the messaging capabilities with the Microsoft space.