Cinnober Financial Technology has initiated a campaign aimed at setting up an industry organisation that will drive a quality standard across financial systems and software. The campaign is based on a draft quality standard proposed by Cinnober, the Financial IT Quality Assessment (FIQA), which is designed to provide transparency around the quality and cost of IT systems, and ensure investment in quality to a level that will restore public confidence in financial markets.
The company sent invitations to 20 C-level executives in exchanges, banks, clearing houses, regulatory bodies and brokers today, asking them to join a working group in London on June 8. The group will review FIQA and discuss the merits and possibilities of setting up an industry organisation that would define and implement a quality standard.
Veronica Augustsson, CEO of Cinnober, says: “I have spoken to many people across the financial industry and they all agree that we should invest in quality to build trust in financial markets. If the financial IT ecosystem – system vendors, buyers and users – pulls together on a common framework for quality assessment, we will be able to increase transparency on quality and costs, and buyers will be able to ensure system quality matches their requirements.”
Other arguments put forward by Cinnober for a standard include the ability to measure and define quality, making it possible to compare quality and make business decisions about which level of quality to invest in. Similarly, if companies like Cinnober invest in quality, they could compete not only on cost, but also on trust. There is also a business case for investing in quality that will reduce outages and their typically high costs.
Cinnober is using the proposed FIQA standard at the Australian Securities Exchange (ASX), where it is guiding the design and implementation of replacements systems. Tim Thurman, chief information officer at the exchange, says: “One of the reasons ASX chose Cinnober to replace its equities and derivatives trading systems with a common platform was the way Cinnober frames quality issues. We are looking forward to implementing a system with quality specified according to a well-defined set of guidelines based on performance and cost.”
The use of the proposed FIQA standard by ASX may be a small step towards developing industry quality standards, but even beginning to get the whole industry behind the initiative will need massive effort and buy-in from suppliers. Undaunted, Augustsson, concludes: “We hope the June 8 meeting will kick start the project and that the participants will contribute funds or personnel to create an organisation that will drive the quality standard. On the basis of dialogue I have had with companies, I am very positive about the initiative.”