Some thoughts on platforms in financial services

As I’m on my last of 5 flights in 54 hours, I am thinking about the word Platform… This is a word that is being used a whole lot these days. Facebook is a platform. eBay is a platform. So is Amazon. Apple has several platforms: the iPod, the iPhones, the iTunes Music Store, the iMac…

What about financial services platforms? Sure, the firms I’ve worked in talked about their Equities business as a platform to deliver a variety of services to clients (e.g., sales & trading, research, banking, etc…). Then there are the technology platforms: the core order state engines (or order management platform), the messaging platform (was rnet the first platform I used in my career?), and the database platform. Is the instantiation of SOA a platform on which a variety of applications can be built? Sure…

Are there platforms that are external to the financial services firms? Surely, your Bloomberg terminal is a platform, and a pretty useful, albeit expensive one. Other products try to be a ubiquitous platform like Mayor Mike’s, but as I sit on my flight tonight I can’t think of a better Financial Services platform. What did I forget?

What makes a good platform? While not a comprehensive list, good platforms need to be extensible, they need to have utility beyond utility envisioned by the designers, they are foundational, they are simple, they are focused, they are powerful, they scale, and they are open. As we live in the age of Web 2.0 / Enterprise 2.0, I think modern technology platforms need to add two more features: (1) they incorporate, facilitate, and/or leverage collaboration, and (2) they are accessible and/or leverage the Internet (and are reachable via Web Services and/or SaaS?). What did I miss? Do you agree with my list of what is a good platform?

So, why does this all matter? When I designed applications I tried to build solutions that were a platform. One of the people in my career that had big impact on me told me that the best solutions solved not only the problem you were being asked to solve but two others. Over time, I took that to mean you should look to build solutions that either were a platform or solutions that leveraged an existing platform.

Amazon’s EC2 platform has revolutionized how startup technology firms launch their initial solutions. That platform takes away the need to have servers and lines in data center (and all of the staff and technology required to service this). You no longer need to forecast your demand and buy headroom. You simple pay for what you need and provision more space / power on the Amazon platform on demand.

What can financial services learn from this? I’ll explore that in future posts, but I encourage you to jump in and frame that conversation.