ABA Banking Journal - July 2008 - (Page 45)

what are we going to use this for? Why are we buying it now? How are we going to link to anything else we already have? What initiatives are valuable to us? And— getting back to risk management—how does this particular system impact our risk profile? Does it fit in with our architecture? How are you defining architecture? PROCTOR How am I going to plan and construct this hierarchy of systems to get the best possible results—including the maximum use of information I’ve gath- ered throughout my operation. In my definition, I’m not strictly talking about a platform (e.g., Unix vs. Linux) or anything strictly technical. It’s more conceptual. How can we best facilitate a coordination among systems and how systems will exchange information without too many layers of middleware or too many copies of the records. Keep in mind, the point of all this technology we’ve placed in banks over the years, the point of all this automation —in a general sense—is to reduce unnecessary labor, cut out unnecessary manual steps. Now, as an industry, we’re at a point where we are operating quite leanly, in fact, as lean as we really can get away with functioning. It’s more the case that people are trained differently and handle multiple functions than the case that you have all these extra people looking for jobs to do. And so, in order for these lean operations we’ve created to work, of course, the technology has to be effective and it has to pick up the slack. Otherwise, you won’t get the results you expect to get. Really, every system should count. BJ Webnotes strophysicists say the Big Bang was the explosion of a tiny packet of energy that expanded to become our whole universe. Now a research team at International Data Corporation (IDC) tells us that our digital universe is already huge and is expanding at Big-Bang velocity. That velocity can’t be stopped or even slowed; but it can be managed. That will be the vital task of not only IT folk, but of every part of every organization, IDC says. The study, The diverse and exploding digital universe, was sponsored by EMC, a global provider of information infrastructure systems and services. Some vital statistics: The digital universe is the total number of “bits” (1s or 0s) created, captured, and replicated throughout the world by all the servers, computer hard drives, data storage units, e-mails, and yes, radio frequency (RFID) tags—plus those greatest of all digital gluttons: images from digital cameras, cell phones, surveillance cameras, peer-to-peer video sharing, DVDs, medical imaging, and on and on. To all Life after the digital Big Bang A those bits, add what IDC calls digital “shadows,” including web search histories, financial transaction journals, and mailing lists. Then add in back-office digitizing. IDC computed that in 2007 the global digital universe was composed of some 281 billion billion bytes (each with eight bits) of digital information. That’s more than all the stars in the known universe. It’s 10% more than IDC calculated for 2006. In 2011 the digital universe will be ten times the size it was in 2006. At this point, an already-overworked IT manager might rise and object that she’s not responsible for managing all the bits stored in PC hard drives and digital cameras. True. Each enterprise is only responsible for managing its own digital environment. However, IDC found that, while individuals create some 70% of the digital universe, enterprises are responsible for the security, privacy, reliability, and compliance of 85%. What to make of these dazzling stats? Are they another “inconvenient truth”? A precious, limited resource like oil? Might the fallout from the digital big bang choke the internet just as Web 2.0 is moving everything onto it? The IDC report cites Web 2.0 as part of the solution, not the problem. So, could the big bang be a good thing, considering the alternative? Consider: until recently we’ve been living in an information society whose transactions were recorded in ink on paper and shipped hither and yon by trucks, trains, and airplanes. In the digital society, those transactions are created and managed as variations in the structures of atoms and sent around the world instantly at about the cost of a local phone call. The new way is surely more efficient. IDC doesn’t discuss the possibility of clogging the internet, but it accepts the benign view that more digitizing is a good thing. The report concludes that each enterprise will have to manage and govern the explosion of digital information in its own rapidly changing environment. On the question of social efficiency, IDC calculates the amount that various industries spend on digital information and compares those numbers to each industry’s contribution to global economic output. In these terms, the financial services industry looks pretty good. It handles secure, sensitive transactions involving trillions of dollars a day—equal to the world’s annual gross economic output. Financial services use 6% of the digital universe to pro- ABA BANKING JOURNAL/JULY 2008 45 http://www.idc.com

Table of Contents Feed for the Digital Edition of ABA Banking Journal - July 2008

ABA Banking Journal - July 2008 Contents Editor’s Column Searching for New Paradigms at BIS Snapshot: C&I Asset Quality 100th Anniversary: Then & Now BofA "Event Concept" Wins Awards, and Customers ABA Resources ABA Chairman’s Position M&A: Beat Today's Market Blues Pass the Aspirin Cover Story: Workout Time Correspondent Banking: No Longer Just a Handshake Business Getting IT Right By Thinking It Through Webnotes Are You "Red Flag" Ready? Mailbox Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - July 2008

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