Fresh for 2004, the team at Bloor Research look at a way to find Wi-Fi hotspots, money laundering challenges and the 'people risk' financial institutions face...If we are to believe the hype, wireless hotspots will be everywhere. They're not all here today but promised in the near future. In the UK, BT Openzone has accelerated plans to have 4,000 hotspots by the summer of 2004. That still leaves the majority of the country cold, so how do you find where's hot?
Use a directory of hotspot locations, perhaps? Search a website before leaving the office and do the same as you do when you access online map sites - print it off.
However, at least one hotspot directory provider has plans to go a stage further. It's obvious really. Provide a location aware service on a mobile phone, since all those carrying laptops or wireless personal digital assistants are likely to be carrying a phone as well.
That's part of what HotSpot Hotel, a London-based hotspot directory service, and BT Openzone plan to offer to extend the basic web look-up service. They will allow users to list the three nearest hotspots to their current location together with detailed directions and have them sent to their mobile phone by text message or multimedia message (SMS or MMS).
That will be far more effective than just looking up on the web. Although for today's early wireless adopters, HotSpot Hotel has almost 10,000 already listed worldwide and a decent search interface which allows you to specify wireless technology, operator with roaming deals and type of location, in addition to the geography.
Locations sign up and pay a subscription to be listed. Those who wish to search for locations must first register and this is currently free. It's likely that the mobile location service will incur a charge and that is a better way to generate revenue. I'm sure the search engine model of paying to be presented further up the table will start to kick in at some point too, so there's another revenue opportunity.
Paying to be listed is the same model as most business directories and the relationship can go a little further with advertising and links through to the hotspot provider, as with BT Openzone. The challenge for HotSpot Hotel, as with all directory services, is how to be the first choice web directory for someone to look up.
On the HotSpot Hotel website, it says "It's all about seamless mobility", and they're right. That's why the link to the mobile phone is vital. People rarely walk down the street with their laptop switched on, antenna twitching searching for a wireless network. Although it's possible to look for hotspots ahead of time - and that's how most early adopters use it today - it's not a realistic long-term proposition. Remember when mobile operators used to make a feature their coverage maps?
We expect and rely on mobile phone coverage; so on-the-spot hotspot finding is a worthwhile location service for one wireless network to provide for the other. HotSpot Hotel will find accommodation on my phone if it can deliver that sort of room service.
*Cleaning up that money*
Money laundering legislation is already generating an increase in demand for people resources, skills and technology to detect and report what may be described as suspicious transactions in the financial services sector. Although not yet officially published, it has emerged that changes to wording of the Money Laundering Regulations 2003 "companies providing business services in relation to the formation, operation of a company or trusts" will be required to appoint money laundering advisers and train staff to identify and report suspicious transactions.
The legal profession is as always ready to deploy the 'fear' factor, take the widest interpretation rather than a strict constructionist view of the regulations. There are suggestions the provisions encompass companies, which provide services to companies beyond lawyers, accountants and professional advisers. Doubtless the regulations will have to be tested in the courts to determine their scale of applicability. However, there is concern that those who provide cleaning, advertising, auctioneering and management consultancy services are enmeshed by the regulations.
Leaked information from the National Criminal Intelligence Service (NCIS), the agency responsible for following up on reported suspicious transactions, appears to strengthen anecdotal evidence. The volume of reported suspicious transactions is such that the only those of the most suspicious nature, are followed-up.
The regulations provide extended user sectors for technology companies to deliver capabilities for detecting and isolating potentially suspicious transactions. However, the regulations are already confusing and intrude on the privacy and normal conduct of the personal affairs of the majority of the UK population. The scale of money laundering is in truth unknown.
Before the new regulations fall into disrepute, the HM Treasury need to spell these out.
*Dearth in the City*
The Training & Competence regime is the way in which the financial services sector seeks to address what has become known as 'people risk'. Specifically, this is to ensure that they do their job competently. Competence not only requires the individuals to perform tasks to a defined standard. Training programmes, of course, help this. Competence, however, extends to codes of conduct, values and ethics. The rationale instilling these qualities is 'a good business culture' brings out strong performance reducing the requirement for strong controls and reducing the 'people risk'.
Of course, it is important that employees, senior employees in particular, demonstrate through their conduct the 'values' of the company. Various consultants and gurus in the industry urge that a more comprehensive approach is required towards 'people risk' - an approach which "takes up the challenge to bridge ethics, compliance and regulation". They suggest that assessments, promotions and bonuses are based in part on 'valued' behaviour not only financial contribution and performance. These are worthy aspirations but can they work?
Many of the 'people risks' derive from the short-term perspective of the financial institutions, admittedly much of which is the consequence of shareholder pressure for short-term rewards. People are recruited to deliver performance on an immediate basis. The management of people is conducted according to cyclicality of the financial markets. They are recruited in large numbers when the markets demand skills and, as they say in the US, 'let go' when demand slackens. The results are often there to see. When demand picks up there is a dearth of talent and experience, money is thrown at the problem by the financial institutions to acquire the talent and experience.
We are currently going into a period where there is a general growing demand to fill expanding employment opportunities in the City of London and a dearth of experience, after there years of downsizing and redundancy. The experience has melted away. Until financial institutions change this mindset, the effects of financial market cyclicality will provide the greatest challenges to managing people risk.