Will Banks Soon Run In The Cloud?

Cloud computing has become prevalent in many industries. A glimpse at the figures Amazon and Microsoft, the two biggest public cloud providers, reveals a multi-billion dollar market which grows rapidly. Starting with online startups, the public cloud has grown to become mainstream within enterprises. And now they’re having their eyes on the financial jackpot – the banks.

Amazon is pitching its cloud-computing service to big U.S. banks, hoping to break into one of the last major strongholds of old-line technology companies. According to a new article by The Wall Street Journal, the public cloud giant has approached Citigroup, Goldman Sachs, JP Morgan Chase and others to show the value of its Amazon Web Services (AWS).

In fact, Amazon already got an early adopter on board: Capital One. Last October at Amazon’s re:Invent conference the bank’s CIO Rob Alexander gave an enthusiastic keynote, describing how they started experimenting with AWS back in 2014 in different areas such as online banking and stream data processing and with use cases such as cloud bursting during Black Friday shopping, and late 2015 launched its new mobile banking app in production on AWS. By “outsourcing” its IT to Amazon’s cloud, the bank aims to reduce its datacenter footprint from 8 to 3 by 2018.

Amazon is not alone in this quest: Microsoft and Google, Amazon’s leading competitors in the public cloud, are also looking to penetrate this challenging niche. According to WSJ, JP Morgan has been examining Google’s cloud platform in addition to Amazon’s. Yet still missing such high-profile early adopter reference.

While the operational benefits are great, public cloud vendors need to address the bank’s strict security needs: concerns such as compliance, regulation, access control and encryption need to be met at the highest standards. According to Capital One’s CIO, the bank has been working closely with Amazon’s team to develop the security model. Alexander went as much as saying it now operates “more securely in the public cloud than we can on our own data centers“. Amazon’s CIA reference also serves it well in proving its security case.

This sort of close collaboration with the industry and regulatory bodies will ultimately bring public cloud infrastructure to the levels of the banks’ data centers, and pave the banks’ path to the cloud.

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2 Comments

Filed under Cloud, Financial Services

2 responses to “Will Banks Soon Run In The Cloud?

  1. Pingback: Verizon Shutting Down Its Public Cloud | horovits

  2. Pingback: Want To Scale Like Google, Amazon? Design Your Own Data Center | horovits

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