Banks Look Up To The Cloud

Banks are growing more comfortable using other companies’ servers instead of their own closely guarded data centers -- and that longstanding security concerns are fading.

Imagine closing your eyes and asking the voice-activated Amazon Echo on a nearby shelf when your next car payment is due. Just a few years ago, banks would have needed a houseful of their own computers to provide such service.

Instead, new capabilities announced by Capital One Financial Corp. run on Amazon.com Inc.’s cloud. 

For years, banks have been outliers, shunning web-based data centers run by Amazon, Microsoft Corp. and International Business Machines Corp. Pressures to reduce costs and innovate are changing that. Of the world’s 38 largest financial institutions and insurance companies, 25 have signed up with Microsoft and are beginning to put applications in the cloud. Capital One, the eighth-largest U.S. commercial bank, started deploying applications in cloud services in early 2015.

“The momentum has been tremendous, especially in the last six months,” said Karen Cone, general manager of worldwide financial services at Microsoft.

Banks are trying to speed up internal development to keep up with innovative startups that are reinventing everything from cross-border payments to bill pay and doing it faster by using the cloud. The lenders look to the cloud as a way to lower costs and improve profits in a climate of stiffer capital rules and low interest rates.

Capital One added to the services it first started offering through the Amazon Echo in March. The bank became the first company to give customers access to auto, mortgage and home-equity information using Alexa, the Echo’s voice-activated assistant, providing answers to questions such as “How much is my next mortgage payment?” and “How much more until my motorcycle is paid off?”

“The primary motivation for the banks to do this is because they want to create agility and flexibility in their middle and back office that would let them digitize their business on an end-to-end basis,” said Likhit Wagle, general manager of banking and financial services at IBM, based in Armonk, New York. “They want to be able to automate all of their processes.”

Two developments have contributed to the bankers’ growing embrace of cloud computing. Regulators have welcomed the shift and cloud companies have revamped their practices to accommodate lenders. “We see no fundamental reason why cloud services (including public cloud services) cannot be implemented, with appropriate consideration, in a manner that complies with our rules,” the UK’s Financial Conduct Authority said this month when it published new guidance for the industry.

Financial Services

Microsoft, based in Redmond, Washington, created a special financial-services compliance program that gives banks full access to all audit reports, notification of any security incidents and provides them with a road map on upcoming security and privacy features.

“I know from our own checks that both Amazon and Microsoft are all over the global banks,” said Karl Keirstead, a software analyst for Deutsche Bank AG. “This is a massive opportunity and prize that the public cloud vendors are well aware could move the needle for them.”

The transition to the public cloud began in Europe and Asia. Commonwealth Bank in Australia has begun using web-based computing for development and testing new software, and running its website, for example.

Major Savings

“Through this hybrid approach of combining the use of public cloud with our internal cloud, we have realized major savings in infrastructure costs and reduced project delivery times,” Nick Giles, executive general manager of IT Delivery Services at the bank, said in an e-mail. “As a result, we have been able to channel that capital toward innovation and customer-facing technologies.

Singapore’s DBS Bank said it will use Amazon Web Services and expects to move as much as 50 percent of its computing needs to the cloud by 2018

Capital One, based in McLean, Virginia, is so happy with cloud services it’s closing data centers and expects to be down to three from eight by 2018.

“There’s nothing we aren’t willing to put in the public cloud,” said Rob Alexander, Capital One’s chief information officer. “We are now doing the vast majority of all our new development in the public cloud, and we are systematically moving our legacy applications.”

Larger banks are expected to follow in coming months, though they are expected to do so cautiously. Many are starting by putting marketing, human resources and other non-core applications onto the cloud -- usually, no more than 10 percent of their total applications, according to IBM’s Wagle. Other parts of the businesses will take longer.

“Banks move slowly, especially regarding IT decisions with regulatory implications,” said Keirstead of Deutsche Bank Securities. “Hence one should expect any move to be gradual.”

Information-Management:  

 

« ISIS Is Tooling Up For Cyber Jihad
Hacking May Prompt Heightened US Election Security »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

Jooble

Jooble

Jooble is a job search aggregator operating in 71 countries worldwide. We simplify the job search process by displaying active job ads from major job boards and career sites across the internet.

Syxsense

Syxsense

Syxsense brings together endpoint management and security for greater efficiency and collaboration between IT management and security teams.

XYPRO Technology

XYPRO Technology

XYPRO is the market leader in HPE Non-Stop Security, Risk Management and Compliance.

Clayden Law

Clayden Law

Clayden Law advise global businesses that buy and sell technology products and services. We are experts in information technology, data privacy and cybersecurity law.

DigitalStakeout

DigitalStakeout

DigitalStakeout enables cyber security professionals to reduce cyber risk to their organization with proactive security solutions, providing immediate improvement in security posture and ROI.

National Centre of Incident Readiness & Strategy for Cybersecurity (NISC) - Japan

National Centre of Incident Readiness & Strategy for Cybersecurity (NISC) - Japan

NISC was established as a secretariat of the Cybersecurity Strategy Headquarters in collaboration with the public and private sectors to create a "free, fair and secure cyberspace" in Japan.

BSIMM

BSIMM

The Building Security In Maturity Model (BSIMM) is a study of existing software security initiatives.

Bittium

Bittium

Bittium provides proven information security solutions for mobile devices and portable computers.

Advanced Systems International SAC

Advanced Systems International SAC

Advanced Systems international is a global company dedicated to data security software design, development, support, and licensing.

ZenMate

ZenMate

ZenMate is a Virtual Private Network services provider offering secure encrypted access to the internet.

Destel

Destel

Destel is a system integrator and provider of IT services focused on Advanced Network & Security Solutions.

Johnson Controls International

Johnson Controls International

Johnson Controls is a global diversified technology company with a focus on smart cities, energy, infrastructure and transportation including the security of automation and control systems.

Calero Software

Calero Software

Calero is a leading global provider of Communications and Cloud Lifecycle Management (CLM) solutions designed to simplify the management of voice, mobile and other unified communications services.

SafeLogic

SafeLogic

SafeLogic provides strong encryption products for solutions in mobile, server, Cloud, appliance, wearable, and IoT environments that are pursuing compliance to strict regulatory requirements.

Telecommunications & Digital Government Regulatory Authority (TDRA) - UAE

Telecommunications & Digital Government Regulatory Authority (TDRA) - UAE

TDRA focuses on regulating the telecommunications sector and enabling government entities in the field of smart transformation. It is responsible for the overall digital infrastructure in the UAE.

Kratikal

Kratikal

Kratikal provides a complete suite of manual and automated security testing services.

Sky Republic

Sky Republic

Sky Republic offers a Smart Contract Platform to integrate and synchronize business networks beyond EDI and API.

Kontron

Kontron

Kontron offers a combined portfolio of secure hardware, middleware and services for Internet of Things (IoT) and Industry 4.0 applications.

Phished

Phished

Phished is an AI-driven platform that focuses on the human side of cybersecurity. By combining fully automated training software with personalised, realistic simulations of cyberattacks.

tTech

tTech

tTech is the first and foremost company providing outsourced Information Technology solutions to businesses in Jamaica.

TOTM Technologies

TOTM Technologies

TOTM Technologies provides end-to-end identity management and biometrics products, powering Digital identity and Digital onboarding solutions.