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You’ve Got (potentially dangerous) Mail

Growing external e-mail threats and an evolving compliance and legal liability environment are forcing financial services firms to reevaluate their state of preparedness.

Take a Load Off

Dunkle says Tumbleweed not only protects American Fidelity from hostile work environment-type threats and other liability risks associated with spam, but it also addresses the considerable infrastructure burden of spam. Circulation of spam was, Dunkle explains, "increasing the load on the network and storage space, not to mention productivity on the employees' part."

Tumbleweed's DAS also frees-up IT human resources from antispam filtering duties. "We didn't have the resources in-house to keep up with spam and virus protection, so essentially what we've done is allowed Tumbleweed to maintain that for us," Dunkle says. "The individuals that were maintaining the system are now free to work on projects we need them to be working on."

Employee productivity is the chief reason for adoption of IM within financial services companies, and indeed the industry tops the list of business investment in the technology, accounting for 44 percent of IM revenues, according to technology market research firm The Radicati Group (Palo Alto, Calif.). Business uses include customer service chat, financial adviser-to-client communication and inquiry-and-response between securities traders. Nevertheless, according to Sara Radicati, president and CEO of The Radicati Group, "We find in most companies, IM is still prohibited and still used informally."

SNW's Abad says that while the firm has tolerated IM use for non-business purposes, it currently is rethinking the policy. Having seen the technology's potential for spreading viruses, Abad relates, "We're on the fence right now as to whether to continue allowing IM or totally taking it out."

Abad says a technology with the potential of IM cannot be resisted, but its adoption nevertheless must be conditioned by business justification. "If we decided we needed [IM] for business, then we would bring it in. But we would have to monitor, capture and log all conversations, and that would mean another investment of $20,000 to $40,000." While not prohibitive, that is enough of an expense to disqualify what is, for the time being, merely a "nice-to-have" technology. The question now, says Abad, is, "Is it more cost-effective to just kill it off? The answer is, 'Probably.'"

While its informal nature appears likely to doom IM at SNW - if only temporarily - it's also likely to suggest the utility of IM for the enterprise as employees, familiar with the technology from private experience, proselytize in favor of the convenience of IM for interoffice communication. Such starting points can familiarize companies with the management of IM, as well as its potential further benefits, within the context of a company-regulated deployment.

An example of this type of "domesticated" IM deployment is in place at Brotherhood Mutual (Fort Wayne, Ind.; $126 million in premium), a provider of P&C insurance to churches. Brotherhood Mutual is using the IBM (Armonk, N.Y.) Lotus Sametime platform to connect about 20 individuals within its IT department. "IM is wonderful for being able to see rapidly who is available, even when you're not running a thread of conversation but just checking to see if you can get someone on the phone," says Daryl Pannabecker, vice president, IS. The department uses the technology internally as well as with a select group of external IT developers. IM, Pannabecker explains, "has been a way of making that group feel more like part of a cohesive unit."

The deployment is being run essentially as a pilot to pave the way for other uses, should a business need arise. Brotherhood Mutual currently prohibits use of Internet-based IM and uses Belarc (Maynard, Mass.) software to monitor its network for illicit deployment. Brotherhood Mutual currently does not archive IM records, given its limited use of the technology.

While Pannabecker won't speculate as to possible future uses of IM at Brotherhood Mutual, he points to the technology's industry potential for uses such as customer service chat or the management of increasing numbers of remote employees. "IM gives you some of the feel of being more local, and in the case of [IBM's] Sametime, the pieces you get with it, such as desktop sharing and whiteboarding, further increase that local feel," he says.

While many companies may be better advised to prohibit IM for the time being, successful trial of the technology can keep a company in a "sweet-spot" of avoiding needless liability while being able to pull the trigger when failure to have IM might become a competitive disadvantage. Of Brotherhood Mutual's deployment, Pannabecker says, "The fact that we have it installed, ready and in use in certain areas - the capability is definitely there to go full scale with it at whatever point we would see necessary."

Employee interest in the technology also resulted in the implementation of an internal IM application at Golf Savings Bank (Mountlake Terrace, Wash.; $270 million in assets), which operates eight branch offices throughout Washington. Despite a company policy forbidding the use of IM, employees were installing AOL IM and Microsoft's MSN Messenger, according to Jane Fortier, Golf's vice president of IT. While the bank took a tough stance on external communications, it also took seriously employee demand for IM.

"The biggest part of our business is mortgage lending, and you'd have groups of people working in different parts of the building trying to put loans together and wanting to quickly ask, 'Hey, where is the appraisal on this loan?' and the person concerned would be on the phone and out of reach," Fortier explains. "We decided we'd take the other programs away from them but try to make them happy because they had a valid request."

Fortier conducted her own research and testing and found that San Diego-based WiredRed's e/pop solution met her requirements for scalability, speed, performance and security. Golf began a trial at a single branch in March 2003 and rolled out the solution enterprisewide the following June with very little modification. "We thought people would object to one thing or another, but e/pop was welcomed in almost 'out-of-the-box' condition," Fortier comments. The application is used on Golf's Windows 2000 servers and desktops, which are connected across the bank's branches, LAN to WAN, via frame relay.

Training on the application was minimal since many people were familiar with IM already. Integrating the bank's active directory made networking use easy, pre-providing potential connections across the enterprise, as did the creation of groups of frequent collaborators. The application indicates the status of users by color - red indicating someone who has not logged on, amber equating to "do not disturb" and green signifying receptivity to messaging. "Many people enjoy that feature just to see who is potentially available, especially on weekends," Fortier relates.

Golf does not shy away from worthwhile investments, Fortier relates, so the firm didn't blink at the implementation costs of e/pop. The bank incurred an initial cost of $6,300 for 160 seats, a figure that included "a nice purchase discount," she notes. Golf also pays annual maintenance for what Fortier characterizes as "really good" service. "We've had few issues, and when we've had them, we get an answer right away," she says.

Golf also has added WiredRed's audit and reporting capability as a proactive measure to supplement written policies governing electronic communications usage. "We already had something in place for e-mail, so when we decided to add another medium for conversation, even though at that time our regulatory agency [the FDIC] wasn't necessarily requiring it, we knew it was just a matter of time before we would need to archive messages and be able to audit and search for certain words or threads," Fortier explains. The bank currently saves all IM records indefinitely via off-site storage.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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