Jules Verne authored the novel Around the World in Eighty Days, Le tour du monde en quatre-vingts jours in its native French, which was published serially in 1872. It would be presumptuous of me to rescript the story of the unflappable Phileas Fogg’s trip around the world, but allow me to take you on a ten-legged journey to explore how the Cloud can enable productivity, innovation, and scalability in financial services. Each of my ten blogs over the coming eighty days will echo the themes discussed in Reply’s ten-part webinar series, Cloud in Financial Services, in which we’ll highlight some of the key points offered by our presenters and panel members.
Nelson Phillips kicked off the first webinar by highlighting the preliminary findings of a research project that he and I have launched in Europe and the United Kingdom on the adoption of Cloud in financial services. “At the broadest level, there is general consensus that moving to the Cloud is overwhelmingly positive”, noted Nelson. The financial institutions we have talked to all make the same claims of increased productivity, increased innovation, and rapid scalability.
Whilst overwhelmingly positive, the journey to Cloud is not without pitfalls. Julien Recan, who was a senior manager with Revolut and Natwest Markets before joining Reply in early 2019, contrasted the use of the Cloud in Cloud-native institutions compared with incumbents. A key success factor for incumbent banks in embracing the Cloud, he noted, is to ensure that their teams become Cloud-savvy and that the adoption of the Cloud goes hand-in-hand with a change in the operating model. My key take-away from Julien’s insights is an awareness of the rise of the ‘Product Owner’, i.e. empowering the Product Owner with end-to-end accountability, including technology enablement, for the design and delivery of a new product or service offering.
The third topic we discussed revolved around the use of personal data and the concerns that senior leaders often feel regarding data protection. We benefited from the cross-sector experience of another highly regulated sector — the health sector. As far back as 2011/2012, the European Medicines Verification Organisation (EMVO) adopted the Cloud and put in place a system connecting 2,000 pharmaceutical companies, 6,000 wholesale distributors and 140,000 pharmacists. This system protects the health of 550 million Europeans against falsified medicine. The insights from Andreas Walter, General Manager of EMVO, resonate with me.
Future of Finance,chaired by Huw van Steenis
The fourth point we touched on: COVID-19 and the Cloud. We concluded that our collective experience with the pandemic has probably provided proof to the assertion that Huw van Steenis made last year in the Future of Finance review that he chaired for the Governor of the Bank of England, Mark Carney. He asserted that the Cloud has matured to the point where it is resilient, commercially viable, and very appealing for both traditional and new financial institutions. The last three months has been a proof point for the maturity achieved by Cloud technologies and made Board Members and the C-Suite increasingly aware of how beholden they are to the Cloud platforms.
The fifth key point was articulated by Jeremy Arnold, Chief Risk Officer, Natwest Markets: “We mustn’t forget that the accountability for everything still remains with the executives and the Directors of the financial institution. Even though you are using a service provider, you have to think of it as an outsourcing contract. You retain the accountability if anything goes wrong. You need to have good risk management of that service provision.”
As a general rule, financial institutions develop a Cloud Governance Framework, which – amongst other things – addresses concentration risk and supplier risk.
Stephan Schmidt-Tank,EMEA Financial Services,Amazon Web Services
The proof of the pudding is in the eating…
We concluded the webinar with an impressive case study shared by Stephan Schmidt-Tank, EMEA Financial Services, Amazon Web Services (AWS).
Stephan highlighted how AWS’s customer, BBVA, implemented a global remote working plan using Amazon AppStream. Confronted with the pandemic, BBVA executed this global remote working plan to protect its customers and employees, including a significant reduction of the number of employees working in its branch offices. Leveraging AWS Cloud, BBVA ensured continued and uninterrupted operations for both consumer and business customers by strengthening digital access to its full suite of services in line with regulatory requirements.Click here to watch the recap video for Webinar #1/10
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Part 1 of the journey makes it clear; the Cloud is an enabling technology that Board Members and the C-Suite ought to consider. Now, the journey will not be plain sailing. Brace yourself for episode 2, as we start looking at Cloud infrastructure!