Challenges Remain for Wireless Services

By Maria Trombly | Securities Industry News | June 23, 2003

Those who took a break from the Securities Industry Association conference in New York City last week to jog across town to the other tech conference, CeBIT America, got a chance to play with some nifty new gadgets-and heard warnings that wireless technology, although stirring a buzz again, may not quite be ready for prime time.At least, not in the securities industry.

Participating on a panel about the business adoption of wireless systems, NASD CTO Martin Colburn said it will be at least two to three years before wireless devices are sufficiently secure and reliable to carry vital transactions. By comparison, other exchanges are already using wireless devices on their trading floors, but these are on wireless local area networks and not cellular systems. However, Colburn did say that the NASD is using cellular wireless for office automation applications, such as e-mail and spreadsheets.

One tool for such apps, the Handspring Treo 600 Series, won the "Best of Show" award at CeBIT in the wireless and mobile category. CeBIT attendees were able to try out this device early, but it won't be released until the fall. This was the first public showing of the device, said Handspring marketing VP Joe Sipher. The device combines a phone and a Palm OS-based personal digital assistant with a QWERTY keyboard, comes with six hours of battery life, a smaller size and a brighter screen than previous versions. The Treo 600 includes a Web browser and a built-in camera for taking and sending pictures. The camera can be used in conjunction with the phone feature for picture caller ID.

Handspring, based in Mountain View, Calif., was formerly part of Palm and will merge back with its parent this fall.
Many other portable devices are also offering e-mails and the telephone version of instant messaging-the Short Messaging System.

But the unchecked use of these devices could pose problems for securities firms.

"If you aren't archiving this stuff, then you'll probably get in trouble with regulators," said Damon Kovelsky, an analyst at Framingham, Mass.-based Financial Insights. "They'll say, Where's the data from these five days?' You can't say, Well, I was using this fancy phone.'"

Kovelsky recommended that firms looking at allowing their employees to use portable devices consider making sure that there's enough memory to save all the messages, then move them to archives when the device is synchronized back with the desktop computer.

"The costs of added memory to do this function shouldn't be that much," he said. "And if Wall Street demands it, they'll make it."

Wireless was also a big topic for CeBIT's keynote speaker, MCI CEO Michael Capellas. The convengence between voice and data is a major driving force for the wireless industry, he said. For example, MCI Advantage allows users to direct mobile phone and office phone messages to be delivered as text messages to a central inbox. Conversely, text messages can be converted to voice mail and accessed through a mobile phone.

MCI also launched its IP VPN Remote service at last week's CeBIT conference. This service allows business users to support a hybrid virtual public network that uses both public and private networks. The company also talked about plans to roll out a service for wireless networking in July and a new satellite service.

"Wireless is one of the top three opportunities facing financial services," said John Davies, vice president of the sales and marketing group at Intel Corp. "If you look at the New York Stock Exchange floor, they're using wireless. The ability to send information wirelessly to people as they move around is a major opportunity for the securities industry."

Intel is a major player in the wireless area, with its new Centrino chip promising to combine wireless capability and a longer battery life in such devices as Sony's lightweight VAIO laptops, due out this summer.