Information technology is playing a big role in helping financial firms deal with the dual pressures of increased regulation and a tough economy, but the technologies themselves are creating new risks and challenges. Many companies are finding it necessary to deploy more powerful and agile infrastructure, reports Samuel Greengard at Baseline magazine.

Banks, brokerage companies and insurance firms are putting in place new platforms to improve auditing, compliance and customer outreach, all of which can make the business more competitive. Brokerage firm Merlin Securities has been deploying a more robust infrastructure to support its order-management programs, data warehouses, trading capacity and more.

"We reached a point where we realized that we had to rebuild the entire infrastructure--from how we design our data center to how we manage the network and storage arrays," said Bob Garrett, chief technology officer at Merlin Securities, adding that bursts in trading activity create challenges for maximizing utilization.

The company virtualized its servers and updated its storage system to deal with demands resulting from soaring trading volumes. "We now have an IT infrastructure that fully supports the business," Garrett said. "We have been able to cut costs while improving our strategic capabilities."

Engaging efficiently and effectively with customers is key to sustaining competitiveness in the industry, but the necessary innovation must be accompanied by commensurate risk management, experts warn. "The challenge is balancing innovation and new services with security and overall risks, including business continuity and disaster recovery," said David Nichols, leader of CIO Services for Ernst & Young's Advisory practice in the Americas. "Every decision must come back to a basic question: How do we drive improvements to customers and provide the best service possible while protecting their data?"

For more:
- see Samuel Greengard's article at Baseline

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