Not just another pretty interface:

Market data, historical records, customer information. These are just a few of the ways that information is at the center of the investment banking business. Building new derivatives, creating innovative structured products, compliance, sales, decision support for traders, risk management – these are just a few of the ways that technology collects, stores, analyzes, structures and delivers data to the people and computers using it to conduct business. Technology management is becoming ever more crucial in controlling risks and garnering rewards in this highly competitive arena.

Wachovia Corporate Investment Bank (CIB), like other leading Wall Street firms, has unique information management challenges. Through a complex heritage of mergers and acquisitions, legacy silo systems have been added to the corporation from component firms, which must be integrated and managed as a whole.

CIB has laid out a roadmap for the existing systems, including corporate goals for those systems and business priorities, said Susan Certoma, chief information officer for the CIB. Some legacy applications will keep chugging away because they are serving a purpose, and replacing them won’t add value. In other, older systems, the bank will undertake a modular replacement of the front-office functionality, leaving the middle- and back-office technology in place. For the end user, much of this inherited complexity will disappear beneath a business-wide presentation layer running on Microsoft Windows XP.

Bucking the trend towards buying vendor applications, Wachovia is building its own proprietary solutions, including a rich desktop applications framework on the Microsoft platform.

“Wachovia has grown exponentially – we have had double-digit growth in capital markets,” said Certoma. “As we grow, we are replacing vendor solutions with proprietary applications such as market risk, desktop presentation and a common server framework.”

She estimated that it would take three to five years to create a common desktop that can access all the information that users need from a single interface. Her team has been working together for two years, and they are making progress for common core components that call business services, she said. The bank has also developed a common sales desktop that can work across multiple asset classes and also reach out to customer information.

“Microsoft is becoming an integral part of the platform for investment banking,” said Certoma. “We have started to develop OneSource, a common desktop framework using C# and .NET. Presentation isn’t the most complex layer, but it is definitely the one the clients see and find useful because it helps the clients understand what we have built.”

By building proprietary applications, the bank IT group can provide business users with total flexibility in how platforms are designed and reconfigured in accordance with changing business requirements. Meanwhile, the new system can present the information within a common desktop framework. When applications reach the fixed income and equity desktops for sales, trading, research and operations, they may have very different functions, but the underlying architecture reveals extensive reuse of core Microsoft components such as SQL Server, Reporting Services, and SharePoint.

“We can create new products and come to market faster to match business change faster with our own proprietary applications than we could on a vendor platform,” Certoma explained. “We enable flexibility and change in the systems as fast as the capital markets change. We build once and deploy many times.” The in-house development teams are highly efficient and can build applications at competitive prices. Careful control of the development process ensures cost-effective solutions.

 A core development group builds common components, which the business technology group then leverages to build custom solutions.

 “We have teams building components like the desktop framework, and teams that are business savvy, that work closely with the component teams to pull services into that framework,” said Certoma.

The bank has built its own order management system (OMS), which provides “incredible” throughput, said Certoma. “OMS is about the pipes and plumbing in which transactions run and getting that information into the data warehouse. And it’s not just about moving data, but also knowing the state of a transaction and how to route them. We looked at the vendor solutions and they did not provide the robust structures we needed,” she said. Wachovia does use vendors for some order management pieces, but deploys these products within its own proprietary infrastructure.

The bank has also built its own algorithmic trading platforms, and is currently building a risk management solution on the Microsoft platform.

“We have very experienced key teams with deep knowledge of financial services and excellent tools to do proprietary build,” she said.

These skills were showcased in the development effort for the relatively new equities business, which started in Baltimore ten years ago. Last year, Wachovia brought in several Wall Street veterans to develop structured products. One year later, the bank is deploying a strategic desktop for its structured products traders, beginning with volatility surfaces. This is a technique for options analysis, which they may or may not be using.

“The time-to-market was amazing. This is a totally new platform with a team that has just joined the firm. We want all structured products getting the same data whether fixed income or equities and we will be able to do that. We started with one product and will add more pieces in the next few months,” Certoma said.

Structured products is a major focus in the capital markets group. In real estate alone, Wachovia is continually bringing new products to market on an almost daily basis, said Certoma.

“Real estate isn’t high throughput; the technical demand is in the complexity of the analytics and providing risk information in real-time. The platform has to be flexible enough so our system can quickly handle new structures,” she said.

Building systems for new structures, for a continuously changing market, places heavy demands on IT.

“You have to understand the function and the businesses,” explained Certoma. “Then a leader has to have a vision of what it will look like, and then you have to be able to share that vision with others. As it comes to the desktop in pieces, the team will understand more. It is complex, and change management is difficult. We never quite know what requirements will be in six to 12 months. The architecture is the key point, so we have brought leads from different areas of the bank to whiteboard system architectures. You need to understand components, dependencies, delivery time at the atomic level, and then you have to know how to aggregate the pieces for delivery to the business users. The technology changes so fast that even those of us who are technologists have to work fast to keep up with changes.”

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Remembering a Merged Intranet

The current project is not the first time that Wachovia has partnered with Microsoft for a major IT overhaul. When First Union and Wachovia merged, each organization’s intranet had strengths and weaknesses. However, neither legacy intranet could adequately fulfill the requirement for a single, consistent, easy-to-maintain intranet. Microsoft Services partnered with Wachovia’s Enterprise Intranet Technologies Channel Development Team to develop a solution and train Wachovia’s staff. The Wachovia Enterprise Intranet was launched within five months of engagement, putting the company on track to save millions of dollars through productivity, cost efficiencies and availability.

At the time of the merger, Wachovia had a highly centralized intranet. The system was set up for manual oversight of content publishing, a time-consuming task. First Union had a highly decentralized intranet, which included more than 400 sites hosted on a variety of infrastructures and using different applications for content management.

Microsoft and Wachovia developed structures that balanced the need for easy authority with the desire of advanced authors to have the flexibility and power of HTML coding. They also set up workflow processes to control how content would be created, approved and published. Many of Wachovia’s requirements were met by out-of-the box features of Content Management Server, out-of-the-box APIs and custom ASP code, or by internal product modifications.

Once the infrastructure was in place, Wachovia migrated content to the new intranet, starting with Human Resources and Corporate Communications.

Cecil Somers, senior vice president and technical support and operations manager for Enterprise Internet Technology at the bank, credited Microsoft Services for the short time it took to deploy the new intranet system. Content Management Server reduced the total cost of ownership as well.

“We could not have met our schedule without Microsoft Consulting Services,” said Somers. “We did an enterprise deployment in a short time with a product on which we had only minor training.”

Financial benefits came from a variety of features of Content Management Server, including high availability, dynamic publishing, search capabilities, ease-of-use and easy content authoring.