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26 November 2012

Journey to Hypergraphica: Redesigning Capital Markets Solutions

While investing in new technologies and solutions is counter-intuitive during a downturn, capital markets firms need to fight this urge. And solution providers need to deliver more value.

[Ed. Note: Earlier this month, TABB Group senior analyst Paul Rowady attended SAP’s SAPPHIRE NOW conference in Madrid.]

At the Reina Sofia Museum in Madrid, there is an installation based on the work of Isidore Isou, a poet and visual artist who founded the Lettriste movement during the 1950s and whose work became notable for its attempt to “synthesize” writing and other forms of media, mainly visual cues like glyphs, icons and other symbology. These works ultimately became known as Hypergraphy (below), representing just one of the vast collection of man’s attempts to communicate in words and pictures.

Reflecting upon the latest data points that I have collected about the evolution of capital markets, I thought this to be a fitting, albeit unexpected, anecdote from which to launch my final dispatch from Madrid.

[Read Paul's first two dispatches from Madrid: "A New Capital Markets Mythology and a New Secret Sauce" and "The Difference Between ‘Interesting’ and ‘Fascinating’ "

If the penetration of enterprise data, resource planning and other soup-to-nuts solutions in the capital markets is any indication, then our business is behind the curve. By comparison, penetration in industry segments such as utilities, transportation and manufacturing is in the range of 80% to 90%. (In other words, 80% to 90% of these companies are using enterprise-class solutions to help optimize how their businesses run.)

Although we don’t typically think of it this way, this assessment could be attributed to the fact that capital markets businesses are relatively young. Even at the global dealing banks, many business units are young in comparison to their banking and insurance units. Couple this lack of enterprise optimization with the current deleveraging and regulatory environment, and many capital markets firms are behind the 8-ball.

While one tactic for conservation is reduced head count, maximizing resource utilization is only made more challenging with fewer personnel and the same old tool kit. As a result, the pressure on these firms is transmitted proportionally to solution providers. While investing in new technologies and solutions is counter-intuitive during a downturn (and capital investment statistics of late support this claim), capital markets firms need to selectively strive against this urge. And, out of respect for this discomfort, solution providers need to deliver more value.

This brings me to “ease of use.” Vendors consistently claim it, and end users consistently demand it. Across the board, TABB Group outreach – no matter the asset class, geography, or position in the workflow – consistently shows that end users rank ease of use among the highest attributes they require from their solutions. The problem, however, is that this equation doesn’t match up. Either vendors are not really providing ease of use, or end users don’t really want it. Otherwise, why would end users keep asking for something that the vendors say they are already delivering? My guess is that marketing folks like to talk the talk – whether they can walk the walk or not. Ease of use is simply too easy to promise.

My point? Design. (I am definitely in broken-record territory, but I expect this crusade to last for a while.) Design is the special sauce for the next era of the capital markets. Ever wonder how Apple became so successful? Design. Herman Miller? Design. Costco or Walmart? In large part, design.

Design impacts all components of a business. From technical architecture to process engineering (from the mundane to the star-spangled), from organizational culture to service offerings and, finally, user experience, design is really what can set you apart from your competitors. All that said, user experience design – the part that gives the sensation of ease of use, of satisfaction – is where the Oscars will be won. Respect your customers’ time by making solutions (in large part through improved interface design) that don’t waste their time, and you may just have an argument to invest in your gizmo, even when the times are tough, and getting tougher.

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2 Comments to "Journey to Hypergraphica: Redesigning Capital Markets Solutions":
  • Comment_n47a3116

    26 November 2012

    Nice article Paul. I couldn't agree with your conclusions more.

    It baffles me that outside the office we all now live in a world of beautiful, simple and easy-to-use mobile apps, websites and devices (which never require instruction manuals), and yet in the office we continue to tolerate poorly-designed and complex desktop apps from the 1990s. I believe financial services has largely slept through the major technology changes underway in web developement, and we are much poorer for it.

    Could I propose a new question for your next outreach? "Excluding corporate websites or portals, what is the mix of programming languages used by your development teams to build client-facing applications?". My guess is that the vast majority will be Java, C++ or .NET, which indicates developers trained to think about efficient back-end processing instead of user-centric, front-end design. When this is the dominant paradigm, then the UI becomes something of an after-thought to simply feed the back-end with the data it needs and the end-result is a poor user experience.

  • Missing

    27 November 2012


    Having worked in a UX capacity on web applications since the late 90s I can safely say, it wasn't always that rosie in webland either. It wasn't uncommon for a loan 'web master' to be responsible for the UX on project teams of 20 or more. It took time, and in the end, fierce competition and penny pinching to force a change. Back then the web was going through its own downturn, budgets were slashed and jobs lost. Investment in UX became a necessity.
    This change seems to have overlooked the b2b world so far. Possibly due to the difficulty of proving ROI on UX projects. Anyhow, I now work for OpenGamma, an open source financial technology company where everyone on the GUI team comes from consumer Internet backgrounds. We are leveraging the cutting edge of web technologies to build a real time risk and analytics engine in the browser. So it's safe to say I see a change on the horizon

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