XML Gains Momentum in Financial Services Industry

Computerworld - Yet another XML-based standard has been added to the library of protocols being developed for financial services. Research Information Exchange Markup Language (RIXML) promises to make it easier for investors to share data about companies. A draft of the specification is expected within the next four months.
RIXML is backed by a number of industry powerhouses, meaning it will be an open standard rather than one that draws upon a particular vendor's technology. RIXML's supporters include Goldman, Sachs & Co., J.P. Morgan & Co., Merrill Lynch & Co., Morgan Stanley Dean Witter & Co. and PaineWebber Inc.
"We would expect people to be doing pilots in the first half of next year," said RIXML steering committee co-chairman Joseph Sommer, who is also director of U.S. electronic trading and connectivity services at Jersey City, N.J.-based DLJdirect Inc. A comment period will follow the draft release.
Sharing Research
RIXML would allow companies to share data by ensuring that their research reports all use the same electronic format so they can be easily published on the Web, on wireless devices or in paper formats.
RIXML is the latest of a large number of XML-based standards that promises to revolutionize the way Wall Street firms and investors make trades and exchange information.
Stamford, Conn.-based Gartner Group Inc. has estimated that some 350 XML standards are currently being developed, many of them in the area of financial services. The standards cover everything from corporate reports and press releases to internal accounting data.
On the brokerage side, standards fall into two categories, said Dushyant Shahrawat, an analyst at Needham, Mass.-based TowerGroup.
On the Sidelines
RIXML is a research-oriented standard. Other standards, such as Financial Information Exchange Markup Language, deal with processing trades.
"The majority of the industry is still on the sidelines and hasn't adopted these standards," Shahrawat said. "However, the 30% using them are driving 70% to 80% of the business. These companies comprise a large part of the overall market."
RIXML steering committee members said they don't think other upcoming information technology initiatives, such as the switch to next-day processing of trades (T+1) from the current third-day standard and the decimalization of stock prices, will hinder RIXML implementation.
"From T. Rowe Price's perspective, we're already in pretty good shape as far as T+1 is concerned," said David Seibert, co-chairman of the RIXML steering committee and vice president for investment systems at T. Rowe Price Associates Inc. in Baltimore. "We're 90% towards T+1 today, so we don't see that as a factor in our criticalpath."
In addition, RIXML, although firmly vendor-independent, will include vendors at later stages of the process. Rival standard Investment Research Markup Language, on the other hand, was developed primarily by Multex.com Inc. in New York. Because RIXML will be open, Wall Street firms will be able to outsource the conversion.
"Not every firm will be faced with the issue of building it internally," said Steve Chandler, director of research at American Century Investment Services Inc. in Kansas City, Mo.