Second Life, governance and compliance were all on the agenda at the fourth regional FT Summit, as investment in IT grows alongside the banking sector and the wider economy.
There aren't many who would look at a virtual universe such as Second Life and see an opportunity to market banking, but that was just one of many ideas brought up at the fourth Financial Technology (FT) Summit held recently in Dubai.
Ashraf Shokry, executive senior manager and head of IT at Khaleeji Commercial Bank, sees Second Life as an excellent way to reach out to prospective clients and particularly to inform them about and market Islamic banking.
A number of companies have set up offices in Second Life as a way to hold meetings without video-conferencing and illustrate their products (Sun Microsystems, Toyota and Vodafone, to name a few) and Shokry's presentation illustrated how the financial industry could have a presence there too.
Shokry's talk was among a number of vendor- and financial institution-led lectures on technology in the Middle East's financial sector over the two-day summit. Along with the presentations, the summit also offers the opportunity for vendors and banking CIOs to network.
"I always think that networking is probably one of the greatest benefits for anyone attending, including the financial services companies as well as the software and IT providers that attend.
And actually, I find the content that is provided in this summit is quite valuable as well," Felix Caprez, director of financial services industry at Oracle EMEA and speaker, remarks.
While the summit ranged from topics such as SOA transformation to document management, there was a clear emphasis on different forms of governance as a trend for banking and finance in the upcoming year.
"We have so many forms of governance, we've talked about corporate, IT and security governance in previous sessions, and yesterday we talked about data governance so I think it's a hot topic," Ahmed Mirza, head of information security at National Commercial Bank, said during his presentation on information security governance.
Caprez agrees that governance, among others, is going to be an important factor for financial institutions this year: "Financial transformation is one of the trends. Another one is going to be around governance, risk and compliance.
"But there are others, especially in the Middle East, we see what are almost wholesale transformations of the entire IT infrastructure are taking place. Being that these banks are growing so rapidly, they're really making a big transformation into the next generation of IT infrastructure," he adds.When it comes to governance and compliance, Caprez feels the impetus comes from both global standards and the standards and requirements of individual regions.
"Even the global governance requirements, take Basel II or International Financial Reporting Standards for example, they always will come with regional flavours.
There's no one single regulation that says this is how it's going to be throughout the entire world, there's always a regional flavour that comes with it. And there are also regionally driven initiatives that only pertain to the region that will have an impact too," he says.
The rapid growth of financial institutions in the region and the growth of the greater regional economy mean that banks are now freed up to explore IT investment, according to Fadi Chehayeb, CIO at National Bank of Kuwait (NBK).
"The movement of capital into the region, liquidity and the search for investment opportunities have all contributed to a very fast expanding economy. A few years ago you had very little investment in IT, now there is a more optimistic mood in the region," he said during his talk on NBK's revamp of its technology infrastructure and move into IT service management.
Another point on which many of the speakers agreed was on IT projects stemming from business strategy and a closer business/IT alignment.
In his presentation on Riyad Bank, Rashed Abdullah Al Othman, SVP of IT governance, talked about both business strategy and standards as important pieces when building an IT infrastructure: "In 2001, we looked into the business strategies and from the business strategies came the development of Riyad Bank's architecture.
"The aim for the architecture was to make sure the systems were tightly integrated with each other and to have the proper rules, policies and standards to be followed during the upcoming stages.
Although Islamic banking had its own event in the same month - the International Islamic Finance Forum (IIFF) - the growth of Islamic finance made it a subtext here as well, and not just in terms of Second Life."I think IT for Islamic finance is going to be an evolution and I do think that existing platforms, be that in core banking or back office operations, provide a very sound foundation and a good platform that we can start with.
"But I also think that Shariah-compliant banking is evolving in its own right and therefore it will push the capabilities of the solutions that are running these systems," says Oracle's Caprez.
And there is no doubt that financial IT systems have a strong market in the region, due to the growth of the banking sector and the wider economy, as well as regional institutions' willingness to adopt the latest technologies.
"There is absolutely one-to-one adoption between here and the West, I don't see a difference. If anything, the banks over here are extremely progressive in their adoption of new technology," Caprez concludes.
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