Key Takeaways:
- The country’s banks are moving.
- Faced with increased competition from startups, higher consumer expectations.
The increased digital demands of COVID-19, experts say banks are hastening a massive shift of operations to the cloud from legacy computer systems.
The transition began before the pandemic, but the abrupt closure of branches and offices in March 2020 forced banks to rely even more on online systems, prompting the acceleration, according to Robert Vokes, Accenture’s managing director of financial services for Canada.
“What happened was that in March of last year, everyone realized, ‘Oh my gosh, I’ve got to go a lot faster.’ That was the main wake-up call.” Cloud-based systems, sometimes run privately by banks and more commonly by third-party tech giants. Allow data to move more quickly and freely, allowing banks to offer more customization to each customer, more automation, and potential cost savings.
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According to Vokes, such promises have been around since the dot-com bubble, but the hardware has only recently been up to the task.
“We didn’t have scalable technologies, but those technologies have now caught up.”
Several banks have made significant cloud commitments in recent months, including CIBC’s deal with Microsoft’s Azure, Scotiabank’s agreement with Google Cloud, and BMO’s agreement with Amazon Web Services, as they all pursue “cloud-first” strategies.
BMO recently completed its 1st major system shift since the Amazon partnership by moving its entire transportation finance operations to the cloud, involving data transfer from over a thousand servers.
According to Sid Deloatch, BMO’s chief information and operations officer for North American commercial banking, the bank made a move because it was finally convinced the cloud infrastructure was established and reliable enough.
“We had to reach that expectation threshold, and we feel it exists, and we’re very confident that it exists now, which is why we’re moving forward.” However, while the main concerns right now are about data security and ensuring that big tech companies don’t have too much power in dictating terms of service. Pathak believes that competition could emerge as a threat as well because big tech companies have both the scale and the speed to become a threat.
Source: Global news
