The dot com boom saw a glut of internet startups. Widely-available venture capital and increasing share prices led many executives to discard standard business models and attempt to maximise share price, sometimes at the expense of the bottom line.

Online bank Egg was launched at the height of the madness, and is a prime example of a dot com survivor.

Robin Young, chief technology officer of Citigroup, which bought Egg from Prudential earlier this year, says the online bank’s service-oriented architecture (SOA) has been crucial to its success in unstable times.

“Egg has had an SOA for a number of years. We were one of the very early adopters of this concept,” he says.

“The main thing that underscored the era was uncertainty. This meant that a management team put a huge premium on flexible IT systems.”

Executives at the bank recognised at an early stage that it was vital for an online-only operation such as Egg not to have its business strategy hampered by the IT department.

By creating an architecture of platforms as a series of loosely coupled services, the bank has been able to react quickly to take advantage of changing market conditions, and stay alive while many other financial startups have disappeared.

Such service-based innovations are only now being addressed by some high-street banks, some five years later. But moving to SOA will be crucial for banking firms in the future, says Amit Shah, financial services analyst with Datamonitor.

“Simplifying and rationalising legacy systems is crucial,” he says. “If you move to fewer platforms, or a single platform, the benefits are immense. A lot of other banks will soon realise the benefits and start doing it. They will lose out if they don’t.”

As a financial services firm expands into different countries, SOA can allow an organisation to transfer systems easily to other countries and to quickly create new applications.

A recent survey by Forrester Research found that 40 per cent of European financial services firms are using SOA. A further 37 per cent plan to use it, and only 18 per cent do not yet have concrete plans to move toward SOA.

European financial services firms are still much more conservative than large North American organisations. More than 70 per cent of these already reported using SOA one year ago.