Many banking and financial services organizations haven’t migrated mission critical workloads to the cloud due to concerns over security, risk, governance and control, according to Joel Spieth, GM, IBM Cloud for Financial Services.
“Banks transact with highly sensitive data and need to ensure that data is moving through their infrastructure with stringent security controls in place,” Spieth said.
According to a 2020 IBM banking on open hybrid multicloud survey, while 91% of financial institutions are actively using cloud services today or plan to in the next nine months, on average only 9% of their mission-critical regulated banking workloads have shifted to a public cloud environment.
“To keep pace with new technology and meet consumer demand, financial organizations are adopting hybrid cloud strategies, including platforms such as the IBM Cloud for Financial Services, for their mission-critical workloads,” Spieth told Traders Magazine.
“The built-in security controls are designed to de-risk the ecosystem for financial services institutions, including their partners and FinTechs, enabling them to accelerate innovation,” he added.
Spieth explained that a strategic hybrid cloud approach enables innovation at speed by providing the flexibility to securely host workloads across different platforms – connecting data and workloads across public clouds, private clouds, on-premises data centers, and the network edge.
“Trust and security are essential components of this infrastructure. That is why our clients’ data and insights remain theirs, and IBM cannot access it,” he stressed.
The financial services industry has traditionally been reticent to move mission-critical workloads to the cloud because their platforms were not built with specific regulatory compliance and security needs of the industry in mind, according to Spieth.
“We developed the IBM Cloud for Financial Services to accelerate cloud adoption within the industry and help financial services institutions move to the cloud with confidence,” he said.
First revealed in 2019, the IBM Cloud for Financial Services was designed in collaboration with Bank of America. And according to Spieth, IBM is working with several other global financial institutions such as BNP Paribas, Luminor Bank, MUFG and more.
Last week, IBM and EY announced the creation of Center of Excellence to help accelerate digital transformation for financial services institutions.
The Center of Excellence is a centralized virtual hub with offerings in areas like regulatory compliance, digital trust and security to help clients leverage the cloud at scale.
Available on IBM Cloud for Financial Services and built with Red Hat OpenShift, the hybrid cloud solutions leverage IBM technology and EY teams’ experience working with financial institutions executing business transformation, cloud migration, risk management and compliance.
“IBM’s collaboration with an ecosystem of more than 90 partners such as EY will help drive digital transformation for customers, enabling them to scale and innovate through partnerships that combine best-in-class technology and industry expertise,” Spieth commented.
He further said that the $1trn hybrid cloud market opportunity is expected to increase nearly 20% by 2024 – and a large portion of that is comprised of the financial services industry.
According to recent IBM internal analysis, cloud technologies are expected to account for about 60% of that future market opportunity as financial institutions are accelerating innovation to meet heightened customer expectations, deliver consistent services, and navigate the ever-complex regulatory environment.
“IBM is working with financial institutions to simplify their journey to the cloud by streamlining the onboarding process, which includes a technical and security assessment, cloud-native and virtual machine workload migration, and readiness validation designed to address third- and fourth-party risk. This collaboration will help bring new partner offerings to market faster that enhance the digital experience for bank customers,” Spieth said.
“Supported by an ecosystem of collaboration partners like EY, we are propelling digital transformation to help enhance the offerings of financial services institutions by transforming everything from the customer experience, core banking applications and payments, to risk and compliance management, cybersecurity, financial reporting and more,” he concluded.
