Since 2005 seems to have been the year of security concerns and challenges (see Ivan Schneider's "Closing Line" on page 50), it's gratifying that at the year's close the financial services industry received at least indirect recognition for its role in the war on terrorism.
When the 9/11 Public Discourse Project -- a private group established by the 9/11 Commission when the panel formally went out of business last year -- issued its bleak final report earlier this month, the only positive news was the A- grade it awarded the government for its efforts to halt the financing of terrorist networks.
Although the numerous poor grades -- 17 F's or D's among the evaluations of performance on 41 recommendations -- doled out by the Public Discourse Project have put the Bush Administration on the defensive (again), the administration legitimately can take some credit for the successful efforts to cut off funding to terrorists, thanks largely to the provisions of the USA PATRIOT Act. However, these results would not have been achieved without the efforts -- and significant technology investments -- of the banking industry to implement effective anti-money laundering and fraud detection measures, as well as improved customer analytics and transaction tracking measures.
And even though it was largely a combination of regulatory mandates and self-interest that caused banks to make these investments rather than an altruistic impulse to protect the country, the outcome has been beneficial all the way around. Banks and their management deserve some praise and gratitude on this count.
But financial institutions should not be smug. Although many of the areas that received D's or worse involve politics, procedure and diplomacy (e.g., scholarship, exchange and library programs; checked bag and cargo screening; and the Privacy and Civil Liberties Oversight Board -- all of which were graded D), a frightening number of them involve technology -- record keeping, secure communications, identity management, etc. Even worse is the apparent inability (or unwillingness) of governments, legislative branches and agencies to share information.
This has to hit bankers close to home. They already know that technology is critical to their banks' success. But they might never have viewed it as a matter of life and death.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio