Major Canadian banks are in transition.
Faced with intensifying competition with start-ups, rising consumer expectations and rising digital demand for COVID-19, experts say banks are accelerating a tremendous shift in operations from legacy computer systems to the cloud. Say you are doing it.
The move began before the outbreak, but the sudden closure of branches and offices in March 2020 forced banks to become more dependent on online systems, accelerating them, Accenture’s Canadian finance said. Robert Volks, Managing Director of Services, said.
“What happened was last March, and suddenly everyone realized,’Oh, I have to go faster.’ That was a big awakening call.”
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Cloud-based systems can be run privately by banks, or more commonly by third-party tech giants, allowing data to move faster and more freely to banks. It offers the potential for customization, automation, and potential cost savings for each customer. ..
There have been such promises since the dot-com bubble, but hardware has fulfilled that mission in the last few years.
“We didn’t really have scalable technologies, but now they’re catching up.”
Several banks have made major cloud commitments in recent months, including CIBC’s Azure deal, Scotiabank’s Google Cloud deal, BMO’s partnership with Amazon Web Services, all in a “cloud-first” strategy. We are promoting.
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BMO recently completed its first major system shift by migrating its entire transportation finance business to the cloud since its partnership with Amazon. This included a data shift equivalent to about 1,000 servers.
Sid Deloatch, Chief Information Officer of BMO’s North American Commercial Bank, made this move because he was ultimately convinced that the cloud infrastructure was established and reliable enough.
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“We had to reach that expected threshold, and we feel it exists, and we are very confident that it exists now, and that’s what we move forward. That’s why. “
This shift will often allow BMOs to offer automated loan decisions, saving operating costs by more than 30%, he said.
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Sanjay Pathak, Head of Technology Strategy and Digital Transformation at PwC, not only waits for confidence in the new system, but banks have also been constrained by patchwork of legacy systems built over decades. I am saying.
“Unraveling current operations from some older technologies is very complex, very risky to the business, and can be confusing.”
He said it’s difficult to get executives alone to the right mindset, as it means giving up control of the underlying infrastructure that has been built over decades.
But banks can no longer be delayed because they feel both consumer pressure and employee expectations for a more seamless process, Pathak said.
Smaller banks without extensive legacy systems could migrate faster, with EQ Bank migrating the entire system to the cloud in 2019. New emerging financial companies, on the other hand, have the advantage of starting with the cloud and forcing banks to respond.
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“Financial services from FinTech are under this great pressure, and FinTech is often born in the cloud,” said Hillery Hunter, Chief Technology Officer of IBM Cloud.
She said banks are migrating more core systems to the cloud. This is because so many data sources need to be integrated and readily available to make immediate loan decisions and more.
“(Consumers) are all very impatient and expect things to be available soon.”
However, increasing reliance on third parties to host much of the bank’s business, including personal financial data, has increased regulatory concern.
The Bank of England said in October that additional policy measures would likely be needed to “mitigate the risk of financial stability resulting from a focus on the provision of some third-party services.”
Banking regulators in Canada said earlier this month that banks need to plan exit strategies from third-party cloud providers to allow them to switch data from one cloud provider to another, with technology. Published a draft guideline on cyber risk. We plan to release more specific third-party guidelines early next year.
“I think there is growing tension about cloud providers becoming competitors … that’s a real threat to banks.”
© 2021 The Canadian Press
Canadian banks are rapidly moving to the cloud in the COVID-19, fintech competition-nationwide
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