Home LATEST NEWS HIGH TECH The transition to cloud computing is becoming a must for banks

The transition to cloud computing is becoming a must for banks


This trend began before the pandemic, but the sudden closure of branches and offices in March 2020 forced banks to rely even more on online systems, according to Robert Vokes, managing director of Canadian financial services at Accenture. .

In March 2020, everyone suddenly realized that faster service was needed. This was a serious warning, he says.

Cloud-based systems, sometimes managed by banks but more often by third-party technology companies, allow data to flow faster and more freely. Banks can more easily characterize each customer, automate even more and save money.

The idea has been around for almost 20 years, but the equipment has only been able to implement it for a few years, Vokes adds. We did not have the technical means, but the technology has caught up.

What is cloud computing?

This technology allows businesses and states to store their data on corporate IT servers located outside of their own buildings. It allows users to access data through their devices connected to the Internet.

BMO’s example

In recent months, several banks have entered into agreements with companies that provide cloud computing services. So the CIBC signed a contract with Microsoft Azure, Scotia with Google Cloud and BMO with Amazon Web Services.

BMO has just completed a first major transformation of its system since its agreement with Amazon by transferring all of its financial activities to the cloud, an operation which required the transfer of the equivalent of a thousand data servers.

The bank decided to go ahead because it is now convinced that the cloud infrastructure is well established and reliable, explains Sid Deloatch, of BMO.

We have reached the threshold. We felt the technology existed. We are convinced that it exists now. That is why we are moving forward.

A quote from Sid deloatch

This transformation will allow BMO to offer automated decisions for loans. It will be able to save up to 30% of its operating costs.

Speed ​​and consistency

According to Sanjay Pathak of the PwC firm, banks were reluctant to take the plunge due to the large number of files accumulated in older systems over the past decades. Untangling day-to-day activities from old techniques is very, very complex. It can be very risky and can disrupt a business, he emphasizes.

Convincing management has been a very difficult task, because the switch to cloud computing means giving up control of the infrastructures that have been in place for several decades. However, banks can no longer fall behind in this area because of pressure from their customers and the expectations of their employees, who want more consistent procedures, says Pathak.

The smaller banks were able to act faster. Thus, EQ Bank was able to convert to cloud computing in 2019.

For their part, financial start-ups could launch their activities directly in the cloud, thus forcing banks to react.

There is great pressure on financial services from FinTech companies. These have often sprung up in the cloud. They can move very quickly due to their full digital capacity.

A quote from Hillery Hunter, IBM Cloud

According to her, several banks are moving their basic systems to the cloud because so much of their data needs to be integrated. This data must be available quickly so that certain decisions can be made on the spot, especially in the case of loans.

Consumers have become somewhat impatient. They expect things to be available right away, she says.

Technology risk management

However, the use of a third party to store personal financial data raises concerns for some regulators.

The Bank of England said in October that action is needed to minimize the risks of financial destabilization created by the concentration of services provided by a third party.

The Office of the Superintendent of Financial Institutions Canada released a draft guideline on technology risk management and cyber risk in early November. According to the Bureau, banks and other financial institutions should develop sound exit strategies and consider the portability of data from one cloud service provider to another.

The Bureau expects to release guidelines specifically targeting third-party companies in early 2022. Data security and the assurance that high-tech companies don’t have too much power to dictate terms are the main sources of concern. worry, says Pathak. According to him, these companies are big enough and fast enough to become a threat.

The tension is growing. Cloud providers are becoming competitors. They pose a real threat to banks, he adds.

Previous articleFor the future, NASA is banking on private space stations
Next articleOperation Condor, the campaign of terror of Latin American dictatorships