Reflections on SIFMA 2011

Now that SIFMA 2011 is behind us, let’s take a moment to look back on a conference whose conversations and content mirrored the extremes of our post-crisis world.

This year the Leaders Forum explored two main topics – Dodd Frank implementation and the use and impact of social media – two themes that couldn’t be more different.

On the one hand how does the industry embrace the freest form of technology – social networking – while on the other support the stiffest regulation since the 1930s? Think Facebook merging with Con Edison and you have some idea of what’s involved.

But there were other extremes. New devices are ‘all the vogue’. Slates and tablets are disrupting the front office while the cloud is redefining the way technology is deployed.

“If a bank CIO doesn’t have a cloud strategy they’re asleep at the wheel,” declared Stanley Young, CEO of NYSE Technologies.

The data market also reflected deep divisions. Low latency market data providers at one end of the exhibition halls vied with analytical and visualization kings at the other. In the world of big data, it’s no longer enough to deliver the goods, you’ve got to be able to absorb it and make sense of it as well.

This theme was reinforced by Gillian Tate of the FT who remarked that the publishing industry had become polarized between commodity news on the one hand and analysis and commentary on the other.

But, when it came to social media, we had to look to Jim Cramer for the entrepreneurial perspective. For Jim, a master of the verbal and more recently the viral, print was dead and social media the new mouthpiece for financial services.

But the industry seemed more anxious about compliance than the right to bare tweets.

Which brings us back to financial reform. And Dodd-Frank certainly cast its long shadow over the conference. But, once again, it was the FT’s Gillian Tate, who provided us with the broader view. The issue was not so much financial reform but financial repression as governments seek to reduce the highest ratios of sovereign debt to GDP since WWII with a yield below inflation – a stealth tax on investors.

But financial reform did reinforce the need for financial firms to get on top of the data. Effective risk management and real time reporting are now compulsory. While some vendors outwardly expressed outrage at the exigencies of Dodd Frank they must have inwardly rejoiced at the emergence of a problem that can really only be solved by the more effective use of technology.

And the good news from the exhibition halls was that technology is more pervasive, more powerful and less expensive than ever even though licensing models might have to adapt a bit if the cloud becomes ubiquitous.

While the industry debated inside the conference, the markets outside swung violently from hope to despair, reminding us that, whatever was going on inside our industry, recovery is still a work in progress.