TOOLS OF THE TRADE: CLOUD SERVICES
Banking on the Cloud When asked during the pandemic how quickly their organisation was able to adapt to industry change, only five per cent of senior banking executives in key European markets said they were exploring how and what they needed to do to be more responsive. Natalie Marchant asks what it will take to move them on – and up 2020 will forever be associated with a life-threatening global pandemic, economic turmoil and widespread business uncertainty. It will also be remembered as the year that technology literally came home, with millions of businesses and individuals finding innovative new ways of working together while physically apart.
Cloud enables us to be nimble and work in step with our clients as they scale.” BBVA Open Platform is part of BBVA’s push to maximise the potential for open application programming interface (API) platform banking more widely. It is both a platform bank and a BaaS supplier. Ahead of Europe’s revised Payment Services Directive requirements three years ago, it launched BBVA API Market in Spain, initially making 11 banking APIs available The lack of flexibility in many existing for third parties whose services it offered banking services – already frustrating for to its account holders. The bank initiated some – was laid bare by the pandemic. a similar roll-out in Mexico, but its Open More than anything, organisations needed Platform is only available so far in the US. to be adaptable, agile and resilient – three One of the most forceful arguments characteristics most strongly associated for adopting a Cloud-based architecture with Cloud-enabled systems. is that it frees up organisational space Having an exclusively, or even partially, to focus fully on the customer, enabling Cloud-based infrastructure means that the business to change, pivot and grow new capacity and capabilities can be as users seek stronger, seamless digital tested and added on quickly and easily, journeys and personalised with minimum disruption financial services. The to users. Individual pieces The hybrid well-documented problems of architecture can also transformational banks have with legacy be replaced or updated, approach is really systems sap the mental with little impact on the important because energy and investment that rest, making for an it ensures clients could be better deployed extremely flexible and unlock value every on those front-end projects. secure service. In fact, step of the way Pieced together over the without Cloud it’s hard Ciaran Chu, years, many on-premise to imagine platform ACI Worldwide systems are not only difficult banking or bankingand costly to maintain, but as-a-service (BaaS). also often unable to run and As Abhishek Gupta, update in real time – an CEO of BBVA’s BaaS annoyance for personal business, BBVA Open customers but a major Platform, says: “The true impediment for SMEs and differentiator is our corporate treasurers. As Cloud-native technology recently as 2017, 43 per cent stack. Being built on the
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of US banks were said to still use COBOL, a program language dating back to 1959. The design of such systems, along with the complexity introduced over many years of incremental upgrades, makes it impossible to employ modern development best practice such as agile methodology and continuous deployment. Upgrades and service additions are labour-intensive and costly on server-based systems. Nearly everything we access in our lives via the internet – from email to Netflix and social media – exists in the Cloud. But, as core banking provider Thought Machine’s CEO Paul Taylor says: “The one exception is the financial services industry, which is new to the Cloud or, to be blunt, slow to the Cloud.” This is despite Cloud technology being able to solve the fundamental problems that plague it, he adds. Temenos CEO Max Chuard agrees, describing Cloud as an enabler for new business models. “We see Cloud as a way to differentiate, as a way to offer different types of models for banks. Ultimately, for me, banking in the Cloud is all about the innovation this can bring to the industry,” he says. So, the advantages of moving away from a server-based system to the Cloud are both technological and organisational, making for leaner and more agile operations. And it also allows banks to embrace innovation from outside the bank itself – for the benefit of the provider and customer alike. This hasn’t entirely escaped the notice of decision-makers. But, while many traditional players in the sector had
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