Alfresco: sound bytes - John Newton

In a financial sector blighted by controversy, Alfresco CTO and chairman John Newton tells Future Banking how taking control of your content management technology can help ensure the security of client data and, in turn, restore the public trust in banks.

Earlier this year, Bank of Scotland was fined by the UK Information Commissioner for repeatedly faxing customer account details and payslips to the wrong recipients. The bank, now part of Lloyds Banking Group, also sent statements, mortgage applications and contact details to the wrong people. The errors, in breach of the Data Protection Act, had been going on for three years - firm proof, if it were needed, that document mismanagement can be at best an embarrassment and at worst a serious operational risk.

"That's just one of the cases we heard about," agrees John Newton, CTO and chairman of Alfresco. "There are a lot more that you don't.

"Failure of process is the number one operational risk for banks today, but there's a lot that can be done to help from a content management point of view. When you look at banks' processes, a lot of it has to do with the flow of content and the flow of documents - the communication of information."

Newton has had one of the longest and most influential careers in content management. In 1990, he co-founded, designed and led the development of Documentum, a leading content management firm later acquired by EMC. For the next ten years, he invented many of the concepts widely used in the industry today, before co-founding Alfresco in 2005.

"Banks were our first target; we made sure we had a process engine, and the ability to handle content intelligently and to put lots of context around it so that we could catch any issues that might come up," Newton explains. "That has provided the tools for transparency and the means to communicate information safely. It has also made it easier to discover information."

Data handling

Newton believes that banks are reluctant to behave as data centres, which explains the meteoric rise of outsourcing in the financial world, especially of data and IT systems, to countries such as India. But with the sheer amount of data that banks process and distribute internally and externally, how should they decide what to outsource and what to keep in-house?

"That's something that all industries are facing right now," Newton says. "You should hold on to whatever is core to your business and outsource whatever is context. It's all about cutting down on overall people cost, but you need to make sure that you have the trust of your outsourcing partner to share information reliably, so you need to have all the audit trails."

"Investment bankers are using Dropbox – often a firing offence – and what’s really worrying is the amount of information in Evernote."

Ideally, all the controls and the automation required to ensure this safe relationship should be happening in the background as information is outsourced. This means the processes need to be designed carefully, with technology in mind. The weakness of taking things outside the four walls, and outside the control of the firewall, is something else that needs to be taken into account.

"We have a hybrid approach to this," says Newton. "We know that some things have to go outside the four walls but must be controlled from within.

"It's not like having a simple file store that you just put things in for collaboration; you need the process, the metadata and the search capabilities to make sure that you can trust your partner in the transactions that are going on. As they used to say in the 1980s, 'trust but verify'."

Cloud services

The process of verification would have looked very different in the analogue 1980s; in the digital 21st century, written contracts are being replaced with a host of electronic options, including the oft-criticised and more often misunderstood cloud services sector.

"Banks are schizophrenic about this," says Newton. "They really don't want to be in the data centre business and they see a huge opportunity to outsource it into the cloud and let somebody else take care of it. They're also realising that, in order to deal with peak-loads in analytics and big data, it's great to be able to call on additional computing power. But when it comes to content, I have rarely found banks that are willing to countenance putting stuff out into the cloud."

And yet it's happening all the time; investment bankers and brokers are using Dropbox for instance - often a firing offence - and what's really worrying, according to Newton, is the amount of information in Evernote.

"The Dropbox and Evernote usage is happening because banks aren't providing a viable alternative for sharing information. They need to look at archiving solutions for the information that is out there, recognise how and when people are using it, and certainly control it.

"It's clear that a different approach is required besides just using a standard, publicly available service. For regulatory, compliance and internal process reasons, you don't want to put stuff out in the cloud."

For Newton, that alternative solution is Alfresco. The company's open-source development model has led to rapid development and adoption by everyone from Fortune 500 enterprises downwards. The company ethos is that an open platform can outpace innovation of proprietary content management platforms while also delivering greater flexibility in a globalised society.

"When you look at the banking sector as a whole, it is a big user of open source, probably the second biggest user after governments," Newton says. "And that's one of the reasons banks like Alfresco - its basically adaptable to any IT situation. You can feel confident that the underlying software is not being infected by masses of people out in the community, because it is strictly governed, but you do have the ability to know what's going on, adapt it to your business processes and integrate it into your other systems, many of which are highly proprietary and require that openness to be able to connect to it."

Getting on board

It's not all about new technology, however. A common use for Alfresco systems is customer onboarding, which Newton believes is one of the most important parts of communication, making sure the customer has everything they need to build confidence and trust. As well as providing them with that welcome pack, it's an early opportunity to start on the road to upselling and cross-selling. In short, the content and the channels of communication that are set up at the outset of a new customer relationship are going to be really important later. And at this stage, there is still a place for traditional values and media.

"Banks are reluctant to behave as data centres, which explains the meteoric rise of outsourcing in the financial world."

"In the case of customer onboarding," Newton explains, "you're going to want to use paper as opposed to email. Firstly, you know it's going to get to them, but also, qualitatively, it can be a different experience. Actually taking and producing that client information and all the materials around it is a real editorial process. It needs to be treated like any high-quality publication in terms of authoring and publishing in a timely fashion.

"If you do that right, you can make an impression, and reputation is important for banks right now; we're in a time when they need to rebuild trust with their customer base. You can only do that with more communication, more transparency, and a lot of that is achieved with high-quality content.

"You might also want to tie that printed material to richer media, so video is also going to play an important role. There's an emotive effect that you get with video that you just don't get with printed material. Each one of these is a touch point with the customer.

Social media

In an era of smartphones and touch screens, these interactions are crucial. The behaviour of banking customers has transformed beyond recognition, and this is where big data truly meets content: in the use of context and metadata to understand customer behaviour patterns.

By and large, banks have been on the ball in this regard. They have looked at how to effectively use social communications between the institution and the customer early on, far earlier than most.

"It's strategically important because, if you don't get this right, the customer will go to another bank," Newton says. "I'm not aware of anything in the banking arena like the Sony credit card data breach or the password problems some of the online companies have had. They have the right people in place and it's not surprising, because they pay a lot of money."

And it's just as well; operational risk goes straight to the bottom line.

"It's so costly when things get screwed up," Newton continues. "I can think of a situation involving banks that had been negotiating terms using email to communicate the basis of a swap contract, where each counterparty thought they were referring to a different version of the contract and so effectively agreeing to two sets of terms. That's a multimillion-dollar problem and it's probably happening all the time. Improving these processes has a huge impact."

John Newton, CTO and chairman of Alfresco.
Banks need outsourcing partners that can share information reliably and securely.