Simon Garwood, Product Manager, Investment Services, Fiserv
As enterprise operating systems continue to evolve, investment managers are increasingly exploring how to improve the efficiency of their enterprise IT infrastructure. At the same time, these firms are focused on reducing overhead costs, while maximising the value of remaining expenditures. This means that investment managers are thoroughly examining their IT budgets, which are often driven by expenses related to licensing, hardware, maintenance and support.
Whilst the financial services industry has for many years relied on a limited number of enterprise operating systems such as Unix® and Windows®, the last decade has seen Enterprise Linux gain considerable global traction with investment managers of all sizes. The origins of Linux and Red Hat Enterprise Linux, both open source solutions, are particularly interesting. Linux was created in 1991 by University of Helsinki student Linus Torvalds, who introduced the free operating system on an Internet newsgroup.
Throughout the 1990s, Linux attracted a passionate, collaborative community of IT aficionados that helped the new system evolve from its foundation as a non-commercial project into a robust enterprise operating system that major firms can leverage for mission-critical, day-to-day initiatives. As a result, Enterprise Linux formally debuted in 2002 as a commercialised-version of Linux, and has since become the global leader in open source enterprise technology.
In 2014, Enterprise Linux is established with a strong, global history in functioning as a highly secure, scalable and performance-driven infrastructure for investment managers – and the entire global financial services industry. This has generated a wider adoption of Enterprise Linux by IT leaders at financial services organizations worldwide.
Financial powerhouses now leverage Enterprise Linux because it enables them to increase security, save time, and process mission-critical information far more efficiently. Furthermore, enterprise-level open source technology allows for the precise customisation that is expressly prohibited by “closed source” competitors.
According to the 2013 Enterprise End User Report, published by The Linux Foundation and Yeoman Technology Group, the past few years has seen increasing adoption of Enterprise Linux. The third-annual report is based on a survey of more than 350 IT professionals from major global investment and wealth managers such as Deutsche Bank, Bank of New York, Morgan Stanley, Goldman Sachs, Bank of America, and MetLife.
The report also shows that more than 80 per cent of respondents plan to increase their use of Linux servers over the next five years, with more than 70 per cent planning to deploy Enterprise Linux for new services and applications. In addition, 73 per cent of survey respondents also stating that they intend to increase Linux use for mission-critical workloads.
Functionality and flexibility
Remaining on the leading-edge of technology is a key priority for any financial institution, and as these results show, Enterprise Linux is developing a growing influence within the financial services industry as organisations seek to secure the most up-to-date functionality with advanced flexibility.
In the looming aftermath of what has been called the greatest global economic downturn in recent history, the financial services industry remains committed to reducing top-line expenses. Therefore, cost is regularly cited as a key motivating factor by firms who have or are considering Enterprise Linux adoption.
Estimated cost savings of up to 35%
Moving to Linux can help financial organisations reduce the total cost of ownership (TCO) for front, middle and back-office technology. For example, Arkelis, which is owned by SWIFT, recently published a case study that confirmed its Enterprise Linux deployment contributed to an approximate 35% savings for hardware purchase costs, annual maintenance, operating systems licensing and interface annual fees. In addition, both Hewlett Packard and the Dubai International Finance Centre have published separate case studies demonstrating very similar levels of cost savings and improvements in TCO as a result of Enterprise Linux.
These cost savings can prove particularly valuable for smaller-tier investment management firms who may require the same technology muscle of larger industry counterparts, but do not have the IT budget and resources to deploy it. Enterprise Linux genuinely benefits these smaller organisations because it allows them to manage IT infrastructure in a more efficient manner, while reducing overall costs.
Speed and scalability
Indeed, Enterprise Linux is now a robust platform deployed by many Fortune 500 financial services firms. The platform offers the capability to support thousands of concurrent users with minimal system downtimes, and is distinguished by its operating speed, which is one reason why organisations with Enterprise Linux already in operation plan to dedicate additional resources to its expansion; other firms are even considering a longer-term migration to Enterprise Linux exclusively as part of their strategic objectives.
The true speed of Enterprise Linux is validated by another compelling fact: across the globe, the majority of so-called “supercomputers” run on some variant of Enterprise Linux – including the 10 fastest computers in the world.
Vendors respond to demand for Enterprise Linux
At this time, financial services technology vendors are progressively working to evaluate which applications they need to develop for Enterprise Linux. As the priorities of investment managers and financial institutions continue to evolve over time – and as trust in the open architecture basis of Enterprise Linux grows – financial services technology providers must ensure that their solutions are compatible with Enterprise Linux. They must also remain flexible, and continue to provide exactly what the global financial industry demands from them.
‘Spooky’ AI tool brings dead relatives’ photos to life
By Umberto Bacchi
(Thomson Reuters Foundation) – Like the animated paintings that adorn the walls of Harry Potter’s school, a new online tool promises to bring portraits of dead relatives to life, stirring debate about the use of technology to impersonate people.
Genealogy company MyHeritage launched its “Deep Nostalgia” feature earlier this week, allowing users to turn stills into short videos showing the person in the photograph smiling, winking and nodding.
“Seeing our beloved ancestors’ faces come to life … lets us imagine how they might have been in reality, and provides a profound new way of connecting to our family history,” MyHeritage founder Gilad Japhet said in a statement.
Developed with Israeli computer vision firm D-ID, Deep Nostalgia uses deep learning algorithms to animate images with facial expressions that were based on those of MyHeritage employees.
Some of the company’s users took to Twitter on Friday to share the animated images of their deceased relatives, as well as moving depictions of historical figures, including Albert Einstein and Ancient Egypt’s lost Queen Nefertiti.
“Takes my breath away. This is my grandfather who died when I was eight. @MyHeritage brought him back to life. Absolutely crazy,” wrote Twitter user Jenny Hawran.
While most expressed amazement, others described the feature as “spooky” and said it raised ethical questions. “The photos are enough. The dead have no say in this,” tweeted user Erica Cervini.
From chatbots to virtual reality, the tool is the latest innovation seeking to bring the dead to life through technology.
Last year U.S. rapper Kanye West famously gifted his wife Kim Kardashian a hologram of her late father congratulating her on her birthday and on marrying “the most, most, most, most, most genius man in the whole world”.
‘ANIMATING THE PAST’
The trend has opened up all sorts of ethical and legal questions, particularly around consent and the opportunity to blur reality by recreating a virtual doppelganger of the living.
Elaine Kasket a psychology professor at the University of Wolverhampton in Britain who authored a book on the “digital afterlife”, said that while Deep Nostalgia was not necessarily “problematic”, it sat “at the top of a slippery slope”.
“When people start overwriting history or sort of animating the past … You wonder where that ends up,” she said.
MyHeritage acknowledges on its website that the technology can be “a bit uncanny” and its use “controversial”, but said steps have been taken to prevent abuses.
“The Deep Nostalgia feature includes hard-coded animations that are intentionally without any speech and therefore cannot be used to fake any content or deliver any message,” MyHeritage public relations director Rafi Mendelsohn said in a statement.
Yet, images alone can convey meaning, said Faheem Hussain, a clinical assistant professor at Arizona State University’s School for the Future of Innovation in Society.
“Imagine somebody took a picture of the Last Supper and Judas is now winking at Mary Magdalene – what kind of implications that can have,” Hussain told the Thomson Reuters Foundation by phone.
Similarly, Artificial Intelligence (AI) animations could be use to make someone appear as though they were doing things they might not be happy about, such as rolling their eyes or smiling at a funeral, he added.
Mendelsohn of MyHeritage said using photos of a living person without their consent was a breach of the company’s terms and conditions, adding that videos were clearly marked with AI symbols to differentiate them from authentic recordings.
“It is our ethical responsibility to mark such synthetic videos clearly and differentiate them from real videos,” he said.
(Reporting by Umberto Bacchi @UmbertoBacchi in Milan; Editing by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Does your institution have operational resilience? Testing cyber resilience may be a good way to find out
By Callum Roxan, Head of Threat Intelligence, F-Secure
If ever 2020 had a lesson, it was that no organization can possibly prepare for every conceivable outcome. Yet building one particular skill will make any crisis easier to handle: operational resilience.
Many financial institutions have already devoted resources to building operational resilience. Unfortunately, this often takes what Miles Celic, Chief Executive Officer of TheCityUK, calls a “near death” experience for this conversion to occur. “Recent years have seen a number of cases of loss of reputation, reduced enterprise value and senior executive casualties from operational incidents that have been badly handled,” he wrote.
But it need not take a disaster to learn this vital lesson.
“Operational resilience means not only planning around specific, identified risks,” Charlotte Gerken, the executive director of the Bank of England, said in a 2017 speech on operational resilience. “We want firms to plan on the assumption that any part of their infrastructure could be impacted, whatever the reason.” Gerken noted that firms that had successfully achieved a level of resilience that survives a crisis had established the necessary mechanisms to bring the business together to respond where and when risks materialised, no matter why or how.
We’ll talk about the bit we know best here; by testing for cyber resilience, a company can do more than prepare for the worst sort of attacks it may face. This process can help any business get a clearer view of how it operates, and how well it is prepared for all kinds of surprises.
Assumptions and the mechanisms they should produce are the best way to prepare for the unknown. But, as the boxer Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” The aim of cyber resilience is to build an effective security posture that survives that first punch, and the several that are likely to follow. So how can an institution be confident that they’ve achieved genuine operational resilience?
This requires an organization to honestly assess itself through the motto inscribed at the front of the Temple of Delphi: “Know thyself.” And when it comes to cyber security, there is a way for an organization to test just how thoroughly it comprehends its own strengths and weaknesses.
The Bank of England was the first central bank to help develop the framework for institutions to test the integrity of their systems. CBEST is made up of controlled, bespoke, intelligence-led cyber security tests that replicate behaviours of those threat actors, and often have unforeseen or secondary benefits. Gerken notes that the “firms that did best in the testing tended to be those that really understood their organisations. They understood their own needs, strengths and weaknesses, and reflected this in the way they built resilience.”
In short, testing cyber resilience can provide clear insight into an institution’s operational resilience in general.
Gaining that specific knowledge without a “near-death” experience is obviously a significant win for any establishment. And testing for operational resilience throughout the industry can provide some reminders of the steps every organization should take so that testing provides unique insists about their institution, and not just a checklist of cyber defence basics.
The IIF/McKinsey Cyber Resilience Survey of the financial services industry released in March lasy year provided six sets of immediate actions that institutions could take to improve their cyber security posture. The toplines of these recommendations were:
- Do the basics, patch your vulnerabilities.
- Review your cloud architecture and security capabilities.
- Reduce your supply chain risk.
- Practice your incident response and recovery capabilities.
- Set aside a specific cyber security budget and prioritise it
- Build a skilled talent pool and optimize resources through automation.
But let’s be honest: If simply reading a solid list of recommendations created cyber resilience, cyber criminals would be out of business. Unfortunately, cyber crime as a business is booming and threat actors targeting essential financial institutions through cyber attacks are likely earning billions in the trillion dollar industry of financial crime.A list can’t reveal an institution’s unique weaknesses, those security failings and chokepoints that could shudder operations, not just during a successful cyber attack but during various other crises that challenge their operations. And the failings that lead to flaws in an institution’s cyber defence likely reverberate throughout the organization as liabilities that other crises would likely expose.
The best way to get a sense of operational resilience will always be to simulate the worst that attackers can summon. That’s why the time to test yourself is now, before someone else does.
Thomson Reuters to stress AI, machine learning in a post-pandemic world
By Kenneth Li and Nick Zieminski
NEW YORK (Reuters) – Thomson Reuters Corp will streamline technology, close offices and rely more on machines to prepare for a post-pandemic world, the news and information group said on Tuesday, as it reported higher sales and operating profit.
The Toronto-headquartered company will spend $500 million to $600 million over two years to burnish its technology credentials, investing in AI and machine learning to get data faster to professional customers increasingly working from home during the coronavirus crisis.
It will transition from a content provider to a content-driven technology company, and from a holding company to an operational structure.
Thomson Reuters’ New York- and Toronto-listed shares each gained more than 8%.
It aims to cut annual operating expenses by $600 million through eliminating duplicate functions, modernizing and consolidating technology, as well as through attrition and shrinking its real estate footprint. Layoffs are not a focus of the cost cuts and there are no current plans to divest assets as part of this plan, the company said.
“We look at the changing behaviors as a result of COVID … on professionals working from home working remotely being much more reliant on 24-7, digital always-on, sort of real-time always available information, served through software and powered by AI and ML (machine learning),” Chief Executive Steve Hasker said in an interview.
Sales growth is forecast to accelerate in each of the next three years compared with 1.3% reported sales growth for 2020, the company said in its earnings release.
Thomson Reuters, which owns Reuters News, said revenues rose 2% to $1.62 billion, while its operating profit jumped more than 300% to $956 million, reflecting the sale of an investment and other items.
Its three main divisions, Legal Professionals, Tax & Accounting Professionals, and Corporates, all showed higher organic quarterly sales and adjusted profit. As part of the two-year change program, the corporate, legal and tax side will operate more as one customer-facing entity.
Adjusted earnings per share of 54 cents were ahead of the 46 cents expected, based on data from Refinitiv.
The company raised its annual dividend by 10 cents to $1.62 per share.
The Reuters News business showed lower revenue in the fourth quarter. In January, Stephen J. Adler, Reuters’ editor-in-chief for the past decade, said he would retire in April from the world’s largest international news provider.
Thomson Reuters also said its stake in The London Stock Exchange is now worth about $11.2 billion.
The LSE last month completed its $27-billion takeover of data and analytics business Refinitiv, 45%-owned by Thomson Reuters.
(Reporting by Ken Li, writing by Nick Zieminski in New York, editing by Louise Heavens and Jane Merriman)
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