Hey bank, get onto my cloud!

The Finanser | Chris Skinner | July 21, 2020

fintechs banks and cloud - Hey bank, get onto my cloud!I’ve seen a few big deals signed this month to get banks onto the cloud, such as National Australia Bank (NAB) switching to Microsoft’s Azure, and Deutsche Bank moving to the Google Cloud.

McKinsey expect that cloud usage will rise from less than a quarter of banks business being cloud-based to anything between 40 and 90 per cent of banks’ workloads globally moving to the cloud over the next decade. Bankers believe coronavirus will accelerate that shift dramatically which is why companies like IBM made a big announcement of renewed Cloud for Financial Services offer yesterday.

This is a development building on when Bank of America and IBM announced their collaborative efforts in creating the first public cloud specifically designed to address the requirements of financial services institutions late last year.

See:  4 Digital Transformation Lessons that Banks Need to Learn from Covid-19

Bank of America’s Cathy Bessant, Chief Operations and Technology Officer at Bank of America described the new partnership with IBM as “one of the most important collaborations in the financial services industry cloud space. This industry-first platform will allow Bank of America to use the public cloud, putting data security, resiliency, privacy and customer information safety needs at the forefront of decision making.”

Interesting.

There’s a number of interesting points here.

First and foremost is why didn’t they do this before? They didn’t do this before because it was too risky. They worried about security and how data in the cloud would be protected.

Second, why are they doing it now? Because of COVID19. Plain and simple, banks are being forced into the cloud because their staff are all stuck at home. Tough.

Third, why Google and Microsoft? Because everyone else is really busy. I spoke the other day to a leading cloud services provider, and they said: every bank is knocking on our door to move to our platform now, but we are too busy and told them to join the back of the queue? Cool.Doing Digital cover 152x225 PRESS 1 - Hey bank, get onto my cloud!

However, in the press releases, the picture is different.

See:

“For more than 150 years, Deutsche Bank has been an industry pioneer, with a strong record of innovation in the financial services sector,“ said Sundar Pichai, CEO of Google and Alphabet. “We’re excited about our strategic partnership and the opportunity for Google Cloud to be helpful to Deutsche Bank and its clients as they grow their business and shape the future of the financial services industry.”

This is the bank that’s worth less than half a Stripe, has completely lost its way, has taken serious body blows in the last decade and has a questionable future.

Nevertheless, the new Deutsche Bank leadership team is at least committed to technology and may see a way out. It announced a strategy in 2019 with a key line I use in all my presentations today:

At its heart, our technology strategy empowers our businesses to control “what” is produced, while technology has control of the “how”.

In other words, banking is what we do but technology is how we do it.

This is a critical statement and it encourages me that the new Deutsche Bank leadership team has finally got it.

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