The last ACORD club meeting was a panel debate on e-Accounting. A couple of what I considered to be interesting points emerged that I thought I would share my thoughts on. The first was raised by Dan Lott of LIBM who expressed the opinion that there were four tiers of organisations within the London Market: Tier one were the larger players who have both the resources and the desire to push forward market reform. They tend to have representation on the various committees and are very engaged; Aon are a great example. Tier two is those organisations who have the resources but not the inclination, for what ever reason, to get involved in market reform. Next comes tier three (where Dan saw LIBM) that have the desire and inclination to get involved, but not the resources. Tier four has neither the resources nor the inclination. Dan felt that there is frustration among the tier three that the various reform programmes do not take into account the reality of their available resources.

I can understand the frustration, but integrating ACORD e-accounting and other forms of messaging need not be a scandalously expensive exercise. Of course it depends on the ‘openness’ of the ‘back end’ system, a system that is service enabled will be easier than one that is not. Also, without a service layer or other APIs to get data into and out of a system, the only other way is to write to core files directly. If the system is licensed then this can present issues, as writing directly to core may invalidate warranties. In that situation you are somewhat at the mercy of the vendor. 

Sometimes I think that the concept of ESBs is communicated in a way that make them sound more complicated and expensive than they actually need to be. What is needed is a well designed file handling layer that can receive, validate, transform and load disparate data sources. By ‘well designed’ I mean capable of processing new data sources by ‘plug in’ modules, whether those data sources are simple spreadsheets or ACORD messages. They can be built incrementally as long as the initial design is sufficiently ‘future proofed’. We have built such a framework for clients on a strict budget, so we know it can be done.

The second point of interest was a discussion on ‘choice’ and whether the monopoly Xchanging has over market processing was desirable. Ian Summers view was that from a cost point of view competition is good, but the important advantage we currently have is that there is a single clearing house for the whole market that we should not want to see broken up. Given that the market is a shareholder, the cost would seem to be a controllable point, with the market benefiting from any profit. My own view is that there is another important element that would be improved by competition and that is the provision of technology fit for the sort of market reform that the market seeks.

My concern is that there seems to be no technology vision emanating from Xchanging. Where is the messianic CTO? Where is the technology roadmap? We have seen some tactical moves such as ACORD For All, but no vision for how Xchanging will rise to the technology challenge in order to facilitate market reform.

A great example for me is CLASS. I have been to a number of panel discussions on ECF and a constant complaint is the use ability of CLASS (or lack of it). This hampers take up. CLASS was never designed with the ECF concept in mind and whilst it has been given a ‘lick of paint’ needs overhauling to provide industrial strength ACORD messages. I have no idea whether technology provision was an ITT point or whether there is any service level agreement that sets out Xchanging’s obligations here. In order to achieve the market reform goals we really need them on board with their own roadmap of technology changes that dovetails with the reform goals.