As continued coronavirus cases across Europe raises the prospect of sustained economic uncertainty, incumbent banks are facing the prospect of losing ground to the emerging challenger banks. Financial services consumers are becoming accustomed to virtual interactions and expecting increasingly customised, collaborative, and coherent customer service applications. But at the same time, they are becoming more conscious of security and data privacy.

This has traditionally been a problem for incumbent banks. Inter alia, they face the challenge of working with legacy infrastructure, complex organisational structures, historic customer data and multi-market regulatory requirements. This is particularly so when it comes to innovating and rolling-out new digital offerings. Some 90-95% of banking workloads today are not even in the cloud.

Major banks fight back against challengers

However, according to Alfred Escala Sisquellas, Vice President, Banking and Financial Markets, IBM, new industry-focused cloud solutions, in-built compliance controls, innovation ecosystems and security solutions are paving the way for the major banks to fight back. Sisquellas tells RBI that the majority of banks have yet to deploy core systems to the cloud because of complexity concerns as well as issues such as risk, governance and control.

Moving to the public cloud takes a significant amount of time, months, if they are doing anything in the public cloud. It took BBVA two years for example. The proposition of the IBM cloud, is that we have a policy framework and we have Promontory.” This specialist firm was acquired by IBM in 2016 to help financial services firms navigate the regulatory environment. Financial institutions are looking to the cloud to help them transform. They typically employ a hybrid multi-cloud cloud strategy, using both private and public clouds for their data, applications and services. With IBM Cloud for Financial Services, public cloud becomes an increasingly strategic option. Sisquellas says that this enables banks to efficiently speed up their digital transformation.

IBM Cloud: building trust, optimising security and compliance

IBM Cloud for Financial Services is designed to build trust and enable a transparent public cloud ecosystem with features for security, compliance and resiliency that banks require. FIs can confidently host their mission critical applications in the cloud and transact quickly and efficiently. With an ecosystem of multiple FIs and more than 40 ISV partners to start, the IBM Cloud for Financial Services offers a new generation of cloud. And so banks can now deploy on public cloud to enable innovation and deliver new, more personalised customer experiences. At the same time, they can manage stringent industry regulations for sensitive data and complex workloads.

Financial Services Cloud Advisory Council

IBM has formed the IBM Financial Services Cloud Advisory Council to advise on the ongoing advancement of the cloud framework for financial services,

The Council is focused on bringing major financial institutions together to help drive the strategic evolution of cloud security. The Council comprises C-level members from large, global FIs along with regulators recognised for their knowledge and awareness of best practices for security and compliance.

Alfred Escala Sisquellas, Vice President, Banking and Financial Markets, IBM, speaks with RBI editor Douglas Blakey

As part of its drive to create a centre of excellence dedicated to helping financial institutions accelerate digital transformation and adopt hybrid cloud solutions, IBM is teaming up with EY.

Specifically, as part of IBM’s Centre for Excellence, IBM will help banks modernise their systems by integrating EY industry and regulatory experience with IBM’s open hybrid cloud and cognitive technologies, to accelerate digital transformation.