Magazine article American Banker

Glass-Steagall Repeal Will Ignite Hiring War for Wall St, Data Executives

Magazine article American Banker

Glass-Steagall Repeal Will Ignite Hiring War for Wall St, Data Executives

Article excerpt

The impending repeal of the Glass-Steagall Act is likely to unleash a hunt on Wall Street for experienced information technology executives.

It will begin once commercial banks and insurance companies step up to the plate for the type of talent needed to build and manage the highly distributed, Unix-based client-server systems that have been the private domain of Wall Street firms.

Though Wall Street possesses a clear competitive edge in this field, it must consider how to maintain that strategic advantage in a post-Glass Steagall era.

Consider this: Information systems and technology now function as the manufacturing and product development departments of financial services companies. Technology is a platform for competitive differentiation.

Commercial banks were the first to appreciate the benefits of technology, in the 1960s and 1970s, and began automating both as a way to improve service and to cut costs.

Here, the use of technology was confined largely to automating manual procedures and reducing paper flow. Insurers took similar steps; however, they did not keep pace with banks' continual technology investments.

Wall Street firms were the last to make significant investments in technology, but within a few years, these firms had leapfrogged banks and insurance companies in the use of systems.

The watershed event was in 1990 when investment firms widely grasped that their key to success was highly distributed, Unix-based client-server systems.

During this revolution, power over information moved from the mainframe system to the account executive's desk, igniting the investment of hundreds of millions of dollars.

The irony is that, because they were the last to employ technology for competitive advantage, Wall Street firms now have more flexibility than banks and insurers. …

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