IBM Unfurls Financial Services Cloud

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Via this initiative IBM is hoping to make it simpler for organizations to build and deploy innovative financial services applications using a common pool of data, while simultaneously reducing their governance and compliance costs.

IBM today launched what it claims is the first public cloud optimized specifically for financial services firms and revealed that Bank of America (BoA) has become the first such company to sign on for the service.

Via this initiative IBM is hoping to make it simpler for organizations to build and deploy innovative financial services applications using a common pool of data, while simultaneously reducing their governance and compliance costs, says IBM Cloud CTO Hillery Hunter. Most customers are finding that governance and compliance issues are laying claim to 15 to 20% of their overall IT budgets, says Hunter. Reducing those costs will free up more dollars for innovative application development initiatives, adds Hunter.

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IBM is crediting BoA with collaborating intensively with Promontory, an IBM business unit, to create the controls required for the financial services cloud.   

With the rise of large numbers of fintech startups competition across the sector has never been fiercer. By providing access to a public cloud service. Hunter says it will also become easier to marshal the ecosystems of vendors and technologies needed to build and deploy those applications. From an innovation perspective, that approach may level the playing field between larger financial firms and startups that have aggressively made use of the cloud to drive financial services applications to gain share at the expense of incumbent rivals.

In general, latency-sensitive applications accessing a common pool data will perform better when they share access to a common set of infrastructure resources. As the data gravity forces surrounding any cloud become stronger, the more developers and data scientists will want to experiment with new applications to create new customer experiences, notes Hunter.

“Developer and data scientists discover they don’t need permission to explore,” says Hunter.

Aggregating all that data is also like to prove crucial in the development of artificial intelligence (AI) applications that require access to massive amounts of reliable data to be trained.

The IBM Cloud today is made up of more than 60 data centers spanning 190 application programming interface (API) services spanning multiple platform-as-as-service (PaaS) environments and Kubernetes clusters, says Hunter.

Over time, IBM envisions financial services firms will not only leverage those services to create their own private clouds but also collaboratively work together to drive new types of services that previously would have been too difficult to implement, adds Hunter.

While the concept of cloud computing platforms optimized for a specific vertical industry has been for some time, the success of any such initiative has been at best limited. However, given the level of intense competition across the financial services sector being driven by cloud-based applications, there may be more willing to share resources within the limits of the existing regulatory environment. At the very least, each of the major financial services providers has an opportunity to create their own cloud ecosystems consisting of internally developed and third-party custom applications. In truth, the biggest limiting factor going forward might soon have more to do with the imagination of financial services executives than any specific challenge involving IT.

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