December 10, 2006
Term Project Summary - Developments and Reflection
Developments
In an industry where information is extremely important to each and every member of the firm, several developments have been made to make data both more secure and easier to communicate. Additionally, we have seen the launch of a new, revolutionary software suite (Microsoft Office 2007) that embodies both of these ideals. We have seen several things related to this topic through our tagging and have highlighted some in our blogs. We will provide you with a brief summary of these to recap what we have found:
- Security- Information needs to be shared internally and externally of the firm but it also needs to be secured. ID Management and Password protection are very hard to keep secure and companies are working hard to find a way to do this. One possible development is the smart card which combines and ID badge and IT badge into one card. These can prove to be very beneficial to financial service companies who are having problems with identification of users. Also, with hand-held devices being used more and more the need to secure them is also necessary, as they too hold important information. There is software that provides password protection for these devices and it is making its way into the financial service firms.
- Ease of Communication- With travel being common and work being done outside of the traditional office space data needed to be made easier to communicate. The laptop proved to be an improvement development in technology as they could be brought with the user. Now with the emergence of wireless handheld devices communication of data is made even easier. One recent development has been the BlackBerry, and devices of the like, that can fit in a person’s pocket. These devices support wireless email and internet faxing and thus make it much easier for people both outside and inside a firm to communicate data. A current and future development is a Java-developer toolkit that will be used in the BlackBerry which will allow developers to create new products for the BlackBerry. We will soon see where this development will take us.
- Microsoft Office 2007-This software suite features a group of updated and repolished software applications that are popular with financial professionals. Microsoft touts the aesthetic changes to the applications and claims they enhance user functionality. Pinnicle among these is the Ribbon that replaces the traditional menu bar options at the top of the screen. Also, there will be "new" applications, including: InfoPath, Communicator, and Groove.
Reflection
The past semester has been filled with many developments in ourselves and how we learn. We were introduced to del.icio.us and the information-finding opportunities it presents to us. Using this tool, we were able to find information on our topics that other people thought was worthwhile. In many ways, this is more efficient than Google searching something.
This past week our group had the opportunity to meet and discuss this past semester. We talked about what we thought went right and what we thought could have gone better. Surprisingly, we all reached a consensus on the importance of del.icio.us. We agreed that del.icio.us was something that we could see ourselves using outside of our BIT lives. In fact, all of us had used it to bookmark information about other, more exciting things.
Posted by ccorteg at 01:03 PM | Comments (0)
Factset
Factset provides tools to enable traders to perform analysis of financial data and to manage trading risk. Its electronic trading services also connect financial communities. Many other Finance professionals aside from those in sales and trading use Factset on a regular basis as compared to bloomberg because of it's diversity of applications and that allow more advanced analysis of financial data. For example, Investment Managers, Analysts and portfolio managers rely on FactSet to help them gather information, conduct in-depth quantitative analyses, and manage their portfolios effectively. Investment banking deal teams stay connected with FactSet's comprehensive suite of investment banking solutions, designed for each stage of every task. Wealth Managers like Financial advisors, private bankers, and registered representatives use Factset's web-based suite of investment research analytics and streaming real-time market data solutions.
Factset Timeline
In September 1978, FactSet is founded. Howard Wille and Charles Snyder leave their Wall Street jobs to build a business, headquartered in New York, centered on computer-based financial analysis.
1981 First FactSet client terminal released, allowing direct access to the Company FactSet report.
1982 Charles Snyder develops an application to enable mainframes to deposit items from any database directly into a spreadsheet cell.
1983 FactSet downloading upgraded to Lotus 1-2-3.
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1988 Universal Screening™ is released, allowing clients to use customized screening criteria.
1989 Private Database Service (PDS) is released, allowing clients to store and integrate proprietary data such as portfolio holdings, estimates, and model scores into their daily analysis.
1991 The first real-time earnings estimates databases are released on FactSet.
1992 FactSet for Windows is released.
In recent years, Factset has been constantly upgrading its functions, acquiring other financial dataproviders like Derivative Solutions, a leading edge provider of analytics to fixed income market participants and integrating their capabilities within factset to satisfy the growing need for more information and capabilities.
It also has an online service and has many client resources like Request Disaster Recovery Assistance and FactSet Support Center.
In order to collect more information and gain insight into market sentiment, Factset also invites open contributions from analysts which can are collected within the FactSet JCF Estimates database. Data collected includes
Analyst Information
Price
Accounting Standard (e.g., IFRS, IAS, U.S. GAAP, FRS3)
Price and EPS Currency
EPS, EPS Before/After Goodwill
EPS Dates
EPS Long-Term Growth Rate
Per Share Items
Other Financials (e.g., EBIT, EBITDA, Enterprise Value, etc.)
In addition to their powerful financial analytic solutions, FactSet provides a variety of quality data to the financial community. Factset Subscribers can gain access to premium content like FactSet's estimates, ownership, transcripts and events, takeover defense, and mergers and acquisitions data through the FactSet suite of applications. Certain proprietary data categories are listed below.
Available FactSet Data
Database Description
FactSet CallStreet Event transcripts and details
FactSet JCF Estimates Consensus- and detail-level estimates
FactSet LionShares Global equity ownership data
FactSet Mergerstat M&A activity details
FactSet SharkRepellent Takeover defense intelligence
Many of their estimates can be accessed through dedicated web applications (www.mergerstat.com, www.lionshares.com, and www.callstreet.com).
Posted by weiyuan at 12:29 PM | Comments (0)
December 09, 2006
del.icio.us Highlights
Over the course of this semester, we have used del.icio.us extensively to save our favorite articles and the like so we could find them at a later date. Additionally, we used del.icio.us to tag sites, pages, articles, and blogs relevant to our class BIT 200 at the Ross School of Business at the University of Michigan - Ann Arbor. To differentiate our topic tags (finance) from our normal tags, we used the "techfinance" tag.
After taking a look at the latest del.icio.us progress report, it is clear we have concentrated on Microsoft products:
- Vista -- Microsoft's new operating system has had quite a lot of press over this semester. From a supposedly secure OS, to a product vulnerable to a slew of problems, Windows Vista has been a dynamic tagging specimen.
- Excel -- This ever-popular spreadsheet software is a great source of online tagging opportunities. Our group covered a variety of Excel topics: VBA programming, templates, and the new Excel in Office 2007.
- Access -- Another key component of Microsoft's Office, Access was relatively unknown to us. Through tagging and research on del.icio.us, we were able to find a bunch of information on this software, including some awesome VBA examples!
Posted by ccorteg at 02:38 PM | Comments (0)
December 06, 2006
Cingular 8525 and the Mobile Finance Professional
Cingular 8525 and the Mobile Finance Professional
Over the past couple of weeks I have been researching potential new cell phones. My 2-year contract with Cingular Wireless recently expired and I am eligible to receive a new phone at a discounted price. I'm generally impressed with Cingular's network performance so I want to stay with them.
I'm torn between going with the traditional clam-shell style "flip-phone" (e.g. Motorola's new 3G HSDPA RAZR Maxx) and the new PDA/Smartphones (e.g. Samsung's Blackjack and others).
After weighing all the options and reading some convincing reviews (1, 2), I've decided that Cingular's best PDA/Smartphone is their own Cingular 8525. This next generation smartphone runs on Cingular's new, superfast 3G HSDPA network.
The 8525 offers a slew of features that will benefit the mobile finance professional, including: Windows Mobile 5.0 (Excel, Word, Access) and a mobile PDF reader. There is also a pull-out keyboard and a sleek design. Most attractive, however, is the fact that it features WiFi built-in!
Posted by ccorteg at 01:30 PM | Comments (0)
December 03, 2006
PAPA Writeup
Marketers for years have tried to figure out the buying behavior of customers and how best to sell their products and receive the highest margin. With technology and the Internet a large gap has been filled between customers and companies. The question is: is this ethical? This can be seen by applying the PAPA model to the Wall Street Journal article “Online retailers are watching you.”
Privacy: This holiday season the price people will pay for online orders may differ depending on things such as where you live, your gender, and if you’ve visited the site before. However, this can be gained just by accessing information from the user’s computer and does not need consent from the user in order to obtain the information. Does this threaten privacy? Of course; the companies are accessing private information about the users without them knowing or giving consent.
Accuracy: Another question comes to mind, is this information accurate? One would say that computers are pretty accurate but you can’t tell with certainty everything about the user. The article says you can tell if the user is male or female after about 5 to 10 clicks but what happens if it is a male looking for a gift for a female (or vice versa). The article also says that the companies can tell if they are first time visitors, but what if two or more people share the same computer. Therefore information could be wrong and consumers could be harmed. The cost of designing a web portal that is capable of tracking and customizing the website to the consumer may outweigh the benefits. The costs of the web portal is probably offloaded to the consumer. Any benefits to the consumer like easier surfing and highlighting of products of interest may be offset by the higher prices charged to them. If information is not accurate and consumers incur higher costs, such a system only creates inefficiency and should be eliminated.
Property: Is this information legally obtained? A person’s personal computer is personal and therefore they should have the right to hide or share whatever information they want. Most internet browsers have the option of asking the user whether they wish to accept cookies from a website or not. However, most online shoppers probably do not understand the implications of accepting a cookie or know how to set their browsers to ask before accepting a cookie. The fact that companies are obtaining this information without their consent seems like an infringement on property rights.
Access: Companies clearly have access to this information and consumers can find ways to sort of hide the information. However because the information is so easily accessed by companies and harder to hide by consumers it seems that companies have the edge (as seen by the price discrimination). In addition, when companies are authorized to gain and store consumer information, there is the issue of safety. There have been many cases where hackers accessed a whole database of credit card information through major retailers. Who is to be held responsible and compensate consumers any losses they may incur?
Using the PAPA model shows that online retailers are unethically obtaining information from consumers. But ethics are ethics and since there is no law that says this is illegal companies will continue its use because it give them the best opportunity to obtain the highest profits.
Posted by mklohr at 03:54 PM | Comments (0)
Communicating Data
Speed and Ease in Communicating Data is Key for Investment Bankers
In investment banking their are rewards for the swift and risks for the inexperienced. This can lead to great inefficiencies in the information-technology world. A study has shown that investment banks spend twice as much on information technology as do their commercial and retail counterparts. The product-centic culture of the job values speed and flexibility over operating efficiency. This results in higher technology at a much higher cost (Investment Banks Can Do 'IT' Better).
Technology is making its way into investment banking processes which is forcing automation into the industry (Automation Finds Investment Bankers). This can be seen through the emergence of the BlackBerry that clips to every bankers waiste. There are several versions of the BlackBerry and things like it. The BlackBerry is a wireless handheld device that supports e-mail and internet faxing. It has a full keypad on it to make e-mailing easier for the user. It proves to be very beneficial for bankers who travel a lot and are not in the office throughout the day. Company updates can be immediately e-mailed to the banker and can be received just as fast as any e-mail received on a computer. It is also very small which makes it easy to carry. Click here to see several versions of the BlackBerry.
Here are some of the features of the BlackBerry (BlackBerry Desktop Software):
- Powerful Message Filtering- gives complete control over e-mail by being able to limit the amount of e-mails you receive by setting filters that monitor key words and message fields
- Synchronization- synchronizes your e-mail and organizes information
- Data Migration Wizard- allows you to import contacts, calendar entries, tasks, and memos
- Load Handheld Applications- allows you to load new applications and upgrades from your PC to your handheld
- Folder Management Tools- allows you to file or delete your e-mail directly from your handheld
- Information Backup Utilities- allows you to backup any important information from the handheld to your PC or restore previously-saved files back to your handheld
- Auto Signature- allows you to create an auto signature to be included in your outgoing mail messages sent from your handheld
The wireless device-maker Research in Motion (RIM), the company that created the BlackBerry that won over Wall Street, has taken major steps to become a device of choice for wireless-financial services. This comes at a time when financial-service firms are eyeing more in-house development of wireless financial-services because of the shaky performance of some wireless companies in the past. RIM announced a Java-developer toolkit which opens the doors for developers to start writing applications for RIM. The BlackBerry is the "toy of choice" among investment bankers and it has a strong foothold in the financial-service industry. There should be no problem with getting developers to jump at the chance to develop products because you can do so much with the BlackBerry. It is these addictive features, both current and future, that gave BlackBerry the nickname "CrackBerry" (RIM Looks to Break Out of the e-Mail Box).
Here are some articles related to this topic:
- Deal Management Technology Makes In-Roads In Financial Services
- Fidelity Frees Up Brokers With 'Broker To Go' Wireless Wealth Management Solution
- Wireless E-Mail Comes Down A Peg
Posted by mklohr at 03:23 PM | Comments (0)
Data Protection
Data Protection is Key for Investment Bankers
Financial service firms are starting to feel the impact of the vulnerability of their IT systems. For instance, this year a UBS PaineWebber systems manager was found guilty of infecting the company's network with harmful code that cost the company millions of dollars (See Article Here). As a result of this vulnerability many Wall Street firms are looking to create the best identity and password management procedures.
Due to the nature of the job and the fact that information needs to be accessed internally and externally at all times, ID management becomes difficult to track. This problem can possibly be overcome through the use of smart cards that combine ID badges and IT badges into one card. These smart cards could be very beneficial for financial service firms who have problems with authentication and are trying to protect their data.
Password protection is also very difficult to maintain. Bankers can remember only about five passwords, yet the have to remember over 15. This places a lot of responsibility on the end users (the bankers who have to use the passwords). There have been several security breaches due to compromised passwords. Firms have to find a way to place restrictions on the end users setting their passwords without causing frustration.
Technology has proven to be very beneficial for investment bankers and businesses in general. Data can now be accessed from virtually anywhere in real time. However, these IT systems can prove to be very costly to firms. Their information is very valuable and security must be tight. Problems regarding ID management and password protection are breaching this security. Therefore, solving these problems should be at the top of firms lists in order to ensure that these security problems don't wind up costing them millions of dollars (as with UBS).
Here is an example of what JPMorgan Chase is doing to protect its data (Outer Defenses):
- Every laptop has a hard-disk encryption software. They are also set up with personal firewalls and access company information through a virtual private network. Also as soon as the laptop loses power a password is needed to restart it.
- Supports smart phones (such as BlackBerry) with software that provides password protection.
- Recently implemented malicious code scanning to further prevent compromised remote devices from infecting their network.
- Remote workers found authentication too intrusive but JPMorgan made sure they knew why they were doing it.
Here are some related articles for this topic:
- When Risk Managers Cry Wolf
- RiskProfile Helps Banks Target Risk IT Spending
- Financial Services Among Top Companies Making Strong Case for Security Programs
- Hackers vs. Hand-Helds
Posted by mklohr at 02:46 PM | Comments (0)
December 02, 2006
Important Software for Corporate Finance Professionals
Important Software for Corporate Finance Professionals
Doing the "Computer Usage" assignment gave us all an interesting and enlightening opportunity to interview professionals in our respective fields. In addition to networking with potential future employers, we had the chance to learn about these peoples' daily activities and how they are affected by technology.
Like the investment bankers we interviewed, the corporate finance professionals utilized a combination of Microsoft Office applications with a handful of company specific proprietary software. The Microsoft titles included the popular Word, Excel, and Access.
Through the techniques listed in the Google Search blog entry and the subsequent tagging, we were able to learn a little bit more about the software applications and important features that corporate finance professionals use everyday.
Excel:- NPV -- Net Present Value (NPV) is an important tool used by financial managers to evaluate the financial benefits of a potential project. These projects can range from buildings and equipment to divisions and human capital. Excel offers up the NPV function to assist these professionals in making their important investment decisions. A very helpful tutorial can be found here.
- IRR -- Internal Rate of Return (IRR) is another important tool used by financial managers to evaluate the financial benefits of a potential project. It can evaluate the same things as NPV; however, it is different in the fact that it presents a rate to managers, which can be compared to their cost of capital. Many managers prefer this over NPV (even though it is not as good of a measure)! IRR in Excel is explained here.
Access: During our interviews with financial professionals, we discovered that while most of their employing companies have their own databases that utilize more powerful technologies, these individuals still use Access for a variety of tasks. Many use the databases for client relationships (e.g. names, contact information, products). Others use it for creating quick, understandable databases for clients. A great Access tutorial can be found here.
Posted by ccorteg at 01:47 AM | Comments (0)
November 30, 2006
Software used in Sales and Trading
There are a few major competitors that provide Sales-Traders with real time financial information. They are Bloomberg, Thomson Corporation, Reuters, FactSet Research Systems, and Dow Jones.
I have personally tried out Bloomberg Terminal and Factset during workshops at the
Bloomberg Terminal
This is a computer system that financial professionals use to monitor real-time financial market movements and trades. Bloomberg combines news, data and analysis for financial markets and businesses; it also provides pricing, historical pricing, indicative data, analytics and electronic communications 24 hours a day. Help is provided almost immediately through instant messaging; it also enables you to message other users of Bloomberg instantly. It costs between $1,750 to $2,100 per terminal per month and most large financial organizations subscribe to the service. It is considered one of the leading service providers in its field and is owned by Bloomberg L.P. Here is a picture of the Terminal:
Bloomberg’s GUI is proprietary and takes quite some time to get used to. It is not highly intuitive but there are many shortcuts available which is essential for a fast paced environment like in trading. Here is a snap shot of the interface:
The terminal utilizes a Client-Server architecture and the server runs on a multiprocessor UNIX platform. End Users(Client) usually use Windows to interact with the system. FORTRAN and C programming languages were used to develop the server side of the terminal. Multiple instances of the server process are run by each server machine. The servers utilize a form of a context switch to keep track of the state of each End User. This allows user interaction to be handled by different server processes. A high level of performance is maintained by using a proprietary non-relational database system.
Posted by weiyuan at 04:57 PM | Comments (0)
November 26, 2006
Google and Tagging
Google and Tagging
Throughout the semester, our group has utilized the popular search engine Google to find many of the sites we have tagged. While using Google may seem to be easy, there are many tricks and features in addition to the traditional search that the user might not know about. that make "googling" something much more efficient.
Blog Search
Google's Blog Search has been my new favorite tool when it comes to searching the internet for original material. Often when searching for information, you will come across the same AP or Reuters artices time and time again. Needless to say, this can be very annoying. A useful way to combat this is to read blogs about the information you seek; they are always original and often add insight not found in traditional articles. Blog Search allows you to narrow your Google search to blogs only!
Google Alerts
Google Alerts has helped me greatly when researching specific companies, industries, and technologies. You simply go to the Google Alerts website, type in the topic you want information about, type in your email address, and you're good to go. You will then receive daily emails whenever your chosen topic comes up on the web!
Google Finance
Google Finance allows users to gather a variety of information regarding finance-related topics, including investments, companies, etc. This tool has given me a definite advantage when searching for information on finance and technology through its innovative search techniques.
Posted by ccorteg at 11:25 AM | Comments (0)
November 11, 2006
Topic Announcement
Technology in Finance
All members of our group are interested in finance and all hope to secure internships in a financial institution this coming summer. We decided as a group to research the world of finance to find out about how technology is used in the job. By learning about technology in finance we hope to put the knowledge to use during our summer internships.
We are all interested in various aspects of the financial world. Therefore, each member will be researching more specific topics that tailor to their interests. They are as follows:
- Corporate Finance- Chris will be researching Corporate Finance. This will entail finding out about Microsoft Excel and Access. From this we hope to find out how these programs are used and what the most common aspects of usage are.
- Investment Banking- Mike will research the Investment Banking career. This will entail looking into the uses of Microsoft Excel and PowerPoint along with Access and the popular growing Blackberry. This research should prove to provide valuable information about these technologies and how they are used on the job.
- Sales and Trading- Wilson will be researching Sales and Trading. This will mainly deal with researching the uses of Bloomberg and Factset. The research on these two programs should provide information about how these programs are used and how they help a trader on a daily basis in the market.
We hope to learn about our interests in our perspective careers. This will allow us to become more knowledgeable about the financial world, particularly about how technology is used day in a day out in order to ensure success. For the remainder of the term we will be blogging and tagging about the information we find on technology in finance.
Posted by mklohr at 08:10 PM | Comments (0)
- Powerful Message Filtering- gives complete control over e-mail by being able to limit the amount of e-mails you receive by setting filters that monitor key words and message fields
