EDITORIAL
By Pierre Haren, ILOG CEO

The Internet has extended the hours for banking from 9-4 to 24/7. From almost any computer with a Web connection, one can access a bank account, apply for a loan or invest in the future. Banking on the Internet has also drawn the attention of regulators. To support the industry and protect customers, government agencies are establishing regulations and standards for online financial services.

For many services, meeting new regulations will be tough, as they have committed themselves to hard-coded Web applications that are difficult to upgrade and maintain. As regulations are introduced, they will have to pull systems offline to refit them.

ILOG software components bypass this problem. They impart an open architecture that supports change. Services using our products do not have to worry about going offline to accommodate new regulations. Already several leading financial services rely on applications built with ILOG components. They know that we build the future into our products to help ensure theirs.

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FOCUS

Online Financial Services
Engineered for change

The need for order and security is driving governments to establish codes to regulate and standardize online financial services.

The Internet has become a convenient place to bank. Increasingly more financial operations, including moneylenders and investment houses, are providing Web-based services to keep or attract customers. The boom has produced a vast array of services varying not only in appearance and products, but also in terminology, data processing and financial practices.

The European Commission plans to establish regulations and standards for the services by 2005, in order to bring to the Internet the quality of service customers receive from brick-and-mortar operations. The EC is not alone in its effort. As Orson Swindle, commissioner of the U.S. Federal Trade Commission, pointed out in his talk, "E-Commerce: The Future of Banking and Financial Services," at Suffolk University Law School, Boston: "There is a very strong political interest in Washington, within the Congress and the FTC to increase the nature and extent of federal regulation of e-commerce."

Code conformity
For many online financial services, staying abreast of regulations and standards will be a very complex and expensive task. With each new government-mandated change, they will have to revise the code of their Web-based applications. For some, this may involve taking applications completely offline, effectively going out of business temporarily. A few days offline, however, can be long enough to undo a company.

Fortunately with ILOG's advanced products, updating an online application is an easy task. ILOG software components impart an open architecture that allows users to upgrade a running system without taking it offline. They are able to do this by externalizing the logic, leaving the core code untouched. The user changes the logic externally, and then employs an application programming interface to integrate the changes with the running system. ILOG JRules and ILOG JConfigurator take code revision even a step further, by placing it in the hands of nontechnical personnel. Code revision typically requires the intervention of a software developer. ILOG JRules and ILOG JConfigurator - ILOG's Java components for business rule programming and optimized product configuration, respectively - come with a "natural language" editor that allows employees responsible for implementing policy to use a familiar lexicon in directly changing the logic of a running system.

ILOG software already supports XML, the emerging standard for data exchange. ILOG and Wall Street & Technology recently conducted a survey that showed that 53 percent of those contacted considered XML critical to their business strategies. ILOG JRules works directly with XML, without a converter, and ILOG JViews supports scalable vector graphics for exchanging XML graphics via the Web.

Web services
Further benefiting the industry will be the large-scale introduction of Web services. Accessible through standard Internet protocols, a typical Web service performs one task and is combined with other services to form an application.

Web services have the advantage of being loosely linked, so they can be shared by widely distributed online applications. When a new regulation is introduced, potentially hundreds of applications can be updated centrally through changes to a shared Web service. Subscribers to the service need not worry about changing their applications directly.

Ready for the future
First Union, Visa International and Sony Bank are just three of many providers of online financial services that can quickly adopt new regulations and standards because they use ILOG software components. Moreover, they are readily able to provide new services to satisfy customer demand. Whatever the future has in store for them, they are ready with ILOG.

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