Corporate IM software makers eye Wall Street

The adoption of instant messaging (IM) software by financial services firms mostly involves end users communicating via consumer-oriented products, often unbeknownst to IT managers. But vendors of enterprise-class IM products are trying to change that.

For example, Reuters Group PLC this month said that more than 225,000 financial services workers worldwide, including 80,000 in the U.S., have signed up for the Reuters Messaging technology it launched in October (see story). London-based Reuters collaborated with Microsoft Corp. to develop what is essentially the first version of the software vendor's upcoming corporate IM application, code-named Greenwich. It's due out in June.

IBM wouldn't disclose end-user totals in the financial services industry for its more established Lotus Sametime software. But Jeremy Dies, a manager of collaboration offerings at IBM's Lotus Software Group, said eight of the top 10 commercial banks worldwide use Sametime.

IM is attractive to banks and brokerages because it can streamline both internal and external communications. But analysts and IT managers said uncontrolled use of the technology could open up firms to computer viruses and to regulatory actions by government agencies, which require that electronic communications be logged and stored.

Products such as Sametime and Reuters Messaging include functionality that's designed to meet the security and regulatory compliance needs of financial services firms. In addition, the three top vendors of consumer IM products -- America Online Inc., Microsoft and Yahoo Inc. -- last fall announced versions of their software aimed at corporate users (see story).

Reuters Messaging is among the first IM products, of either commercial or consumer grade, based on the Internet Engineering Task Force's (IETF) Session Initiation Protocol (SIP) messaging standard. Products written using SIP will allow end users to speak with one another across different platforms.

Lotus' Sametime doesn't use native SIP code, but instead uses a SIP gateway device that doesn't allow streaming video or conferencing. Dies said the SIP standard, currently being devised by the SIP Working Group of the IETF, will soon be robust enough to natively allow streaming video or conferencing. "And we're absolutely gung-ho about adopting it [SIP] into our product then," he said.

Wells Fargo & Co. last year rolled out a set of Web chat and collaboration tools for its customers. Jim Smith, senior vice president of the San Francisco-based company's consumer Internet products, said Wells Fargo is considering the purchase of an enterprise-class IM product in order to support one-to-one communications internally and communications with its customers.

Jim Lenz, senior vice president and co-manager of trading at Bridge Trading Co. in St. Louis, said the Reuters-owned brokerage began beta-testing Reuters Messaging last summer as part of an effort to cut down on the use of unauthorized IM tools internally and at the banks and clearinghouses with which it does business. "We heard from a lot of [users] that they needed something secure because more and more people were using AOL or Yahoo or something that wasn't secure," he said.

But the use of consumer-grade IM software remains widespread in business environments, analysts said. For example, in a survey of financial services firms last fall by Black Diamond, Wash.-based Osterman Research Inc., respondents said that about half of their end users were downloading more than one consumer IM product for business purposes.

In October, seven top financial services firms formed the Financial Services Instant Messaging Association (FIMA) to push vendors to develop IM standards. But Ursula Mills, co-chairman of FIMA, this month said she doesn't expect the use of consumer-oriented services to stop anytime soon.

"Many of the customers are wanting to use the product of their choice," Mills said. "If that's AOL, Yahoo or MSN Messenger, then that's the product we want to use."

Related:

Copyright © 2003 IDG Communications, Inc.

7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon