Suppose, just suppose, that you, as a customer of several different financial services providers, wanted to see all your balances and activity together at one time. Actually, this is not such a far-fetched idea! It would be really useful to be able to see your checking account and car loan balances from your bank(s), combined with money market and stock/investment balances and activity from your brokerage service(s), along with your mortgage information from your non-bank mortgage provider(s) and insurance coverage from your insurance provider(s) – all on the Web, of course! Being a financial services aggregator is a strategy some organizations don't want to attempt. But it has the potential to provide competitive advantage to the organization that braves the challenges. Among the challenges is the issue that various competitive organizations may not see the need to share information (except for the fact that the customer wants it that way, of course!). But if that hurdle is crossed, there is also the very real difficulty of getting files in sync. Usually, this is done is by passing strip files containing the specific information requested. The aggregator needs to specify hard and fast rules involving what data is needed and the specific format the data should be provided.

Enter XML – extensible markup language. XML is a World Wide Web Consortium-developed set of standards regarding information exchange. XML enables the creation and manipulation of information content, thus supporting data interchange. In order to understand what XML brings to the table in sharing financial information, it is necessary to think about the "tags" that provide descriptions of data in markup languages in general. The tags in HTML (hypertext markup language) indicate style and formatting (in other words, what the data looks like). For example, 3775 indicates that the number "3775" should be in bold print. However, XML tags provide semantic meaning (what the data means). So 3775 indicates that the number "3775" represents the last four digits of the social security number.

Now the power of XML comes from the fact that it allows data to be put in any order. The tag, not the location of the data in a particular file format, describes the data's meaning. A parser can ignore data that is not needed. XML involves data only – it contains none of the business rules or processes associated with the data commonly found in application program code. This separation of the data from the process is key to XML's success. To see how XML aids in our financial services data aggregation issue, let's continue.

Collecting balance and activity information from other, competing financial services providers becomes easy with XML. Instead of requiring files with a specific format, which changes frequently and is difficult, if not impossible, to comply with, now the only requirement is a file containing financial data with tags describing its meaning. So a financial services provider need only describe the data it provides via XML "tags," and all other entities (financial services providers or otherwise) can understand what the data means and correlate it with similar data from other providers.

Actually, the financial services aggregation scenario is only one example of why XML is a big issue for the financial services industry. Similar to interapplication communications with external partners, XML can facilitate the ad hoc exchange of electronic commerce transactions. But often overlooked is the role XML can play in internal application integration. XML supports the ability for computers to operate on document information as data. Data definitions can be specified that are processable by multiple applications, enabling application integration. Think about a customer completing one loan application, for example, which can then be used by mortgage, credit card, line of credit and other credit systems within the bank without having to rekey information. FNMA, title insurance companies, flood insurance companies and the bank all can understand the same mortgage loan application without having to rekey data. XML can provide a universally accepted data format that reaches all the way through the organization, from the customer, through middleware and down to the legacy applications.

XML will have a profound affect on the financial services industry. Our basic business activity is information rich. Success in the future will be measured on how well we share information both inside our institutions and with our external partners. Using information effectively requires that we understand it within context. XML can help provide that context.

What can we do to prepare? We can take time to understand XML and its implications, use it internally, push vendors to comply with it as a standard and push toward standard financial industry data definitions that will enable cross- organization communication. Forward-thinking organizations can indeed "set the eXaMpLe!"

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