In January, Salesforce.com’s “on-demand” services for managing customer relationships–popular with Merrill Lynch, Morgan Stanley other Wall Street firms–went down for about an hour. In the middle of May, Google went down for two hours, leaving users unable to access the search engine–but also email, documents and other Google services popular with small business users that were hidden in its widely dispersed computing “cloud.” Then, in early June, customers of Amazon’s Elastic Compute Cloud (EC2) cloud computing services were offline for more than four hours after lightning struck one of the company’s data centers. The portent of such problems used to make Bob Barry wary of cloud-based computing.  For the president of Barry Capital Management Inc., … Read more »

Earlier this month, a hacker reportedly exploited a vulnerability in an Internet-based virtualization software platform that took down more than 100,000 Web sites and other applications. “That was an intrusion that was cloud-specific–it went through a virtualized vulnerability,” said Jim Reavis, founder of the Cloud Security Alliance, an industry group representing risk managers at financial and other firms. There haven’t been large scale reports of financial data losses due to cloud vulnerabilities, he said–but that’s because financial firms haven’t yet started using cloud computing for sensitive applications. The securities industry firms involved in the Cloud Security Alliance are considering using clouds–but not for regulated information, he said. “People are mostly in the architecture, pilot and strategy phase,” he said. Government agencies are also still in the … Read more »

This article originally appeared in Securities Industry News. By Maria Trombly. Analysts, execs offer up ten key technology areas for smaller buy-side budgets Technology providers that cater to buy-side firms are knocking on doors in an industry that has seen widespread losses and sharp reductions in assets under management, as well as mergers, bankruptcies and outright frauds. According to Hedge Fund Research president Kenneth Heinz, 2008 was the worst year on record, with losses averaging 18.3 percent. Research firm Eurekahedge says assets under management fell from a peak of $1.9 trillion in 2007 to $1.5 trillion. But despite the financial damage, industry observers note that the buy side is still making select investments in technologies that can save time and money. Read original article (paid subscription required) . Did you like this article? Contact Maria Korolov … Read more »

Article originally appeared in Securities Industry News. Salesforce.com reached a milestone last fall: 1 million people using the online software company to host their customer relationship management systems and other key business processes. Those users were at more than 1,600 financial services firms including ABN Amro, SunTrust Banks, Daiwa Securities and Bear Stearns–Merrill Lynch & Co. alone accounted for 25,000. That amounts to a big cultural shift. As recently as 2005, financial firms kept all their customer data close, behind corporate firewalls, in steel safes. Wall Street hardly seemed ready to entrust that data to a start-up. However, Salesforce.com challenged that thinking by proving, first to Merrill Lynch and then others, that its security was as good as a bank’s. With trust came respectability and customers, as well as unwanted attention … Read more »

Firms answer regulatory, investor demands with added controls and third-party systems At the heart of Societe Generale’s recent EUR4.82 billion ($7.01 billion) in losses from unauthorized trades is the fact that the accused trader–Jerome Kerviel–was able to use his knowledge of the system to get around the checks and balances. Kerviel, an equities trader, started in the back office and had maintained the French bank’s compliance technology. Societe Generale has acknowledged that he understood the trade processing and control procedures and knew how to avoid them. The alleged fraud comes as regulators and clients alike are demanding better transparency, reporting and accountability. Firms are beefing up their pre-trade compliance technology, turning to Web-based delivery to reduce costs and improve accessibility, expanding asset-class coverage, … Read more »

This article originally appeared in Securities Industry News. As the Web 2.0 movement makes interactive applications and social networks such as Facebook ubiquitous on employees’ desktop computers, financial firms are facing the daunting task of monitoring these so-called greynets. Instant messaging security vendor FaceTime Communications estimates that there are more than 600 greynets worldwide, a number that will climb past 1,000 by the end of the year. These networks are called greynets because the peer-to-peer applications they are composed of operate in the shadows, without company authorization, and are difficult to police. According to a recent survey by FaceTime’s Security Labs research unit, 90 percent of IT managers have experienced a greynet-related security incident in the last six months–despite deploying firewalls and intrusion prevention systems. On average, IT managers spent $289,000 in … Read more »

A few years ago, it would have been hard to imagine Wall Street firms turning over key customer data to an Internet start-up. But in May 2005, Salesforce.com announced a major customer win: 5,000 Merrill Lynch & Co. financial advisers would use the Web-based service to track their customers. After a one-year pilot project, Merrill Lynch moved another 20,000 advisers onto the platform. Currently, San Francisco-based Salesforce.com has 100,000 individual users at over 1,600 financial services companies including ABN Amro, Mizuho, E-Trade Financial Corp., Citigroup, Morgan Stanley and TD Ameritrade. Due in part to its relatively low pricing scheme–no start-up expenses, and a flat per-user fee that starts at $65 per month–smaller firms have also been signing on. That Merrill is a customer has made it easier for some to adopt the platform. … Read more »