The cloud computing providers are going center stage in financial services in 2017. Some are public (all apps and data on the cloud), some are hybrid (some apps and data on private centers). We will be monitoring how these giants grab share from the financial sector as it grows (Fintech startups) and as it transforms (incumbents and their suppliers).
Our watch list includes (not limited to) the cloud computing providers below that are global and are no longer under the radar screen in terms of their strategic moves in the financial industry.
Google Cloud, Amazon Web Services, Microsoft Azure, IBM Bluemix, Aliyun
Salesforce, Accenture, Oracle, CSC, Rackspace
Amazon Web services are 100% public. Pay as you go outsourced services from AWS are growing (total 100,000 customers, 10,000 new in 2016). Once you are onboard, you can shop on their marketplace for all sorts of apps and additional services. International data centers (to address data security concerns) are being planted globally as we speak.
Singapore’s DBS bank partnered with AWS as they accelerate their digitization journey (Pirates with Ties interview with Olivier Crespin of DBS Digital Bank).
What caught my attention is their recent launch of AWS Financial Services Competency which will certify technology and consulting partners that specialize in the financial industry. The current certified list of AWS Partners is:
- Core Systems: Avoka (digital sales), Calypso (capital markets on demand), Corezoid (process mgt), EIS Group & Guidewire (cloud insurance), Mambu (cloud deposit taking & loan offering), Moven (mobile banking)
- Risk Management: FICO, FIS-Prophet, NICE Systems
- Data Management: IHS Markit
- Consulting Partners: 2nd Watch, Accenture, Capgemini, Cloud Technology Partners, Cloudreach, Cognizant, Infosys, REAN Cloud, Sopra Steria, Wipro
Google Cloud has been mainly focused on consumer banking and the retail experience. Unless I have missed some enterprise level collaboration, Google Cloud is last on the Western cloud computing financial sector penetration (for now).
Microsoft Azure, a hybrid provider (i.e. clients can keep some data in their own data centers), has announced new UK data centers as part of its move to grab a share of the Fintech market. Startupbootcamp, the international accelerator with a significant Fintech component, offers its members access to a variety of cloud providers (e.g. Amazon Web Services, Microsoft Azure, and Google Cloud etc).
Cross River Bank, a leader in the digitization of banking (see post) and the first incumbent bank to be funded by a VC much like a startup, is being built on Microsoft Azure.
Bank of America Merrill Lynch and Microsoft Azure announced a collaboration at SIBOS on blockchain technology to host the Bofa transformation of trade finance transacting. The R3 consortium, hosts its lab and research center on Microsoft Azure. Seems like Microsoft Azure is the preferred provider for blockchain related projects?
IBM Bluemix is being used by incumbent banks to interact with the startups (seems like they are the preferred provider for the accelerators run by banks, for now). The largest deal is with ANZ, which has a 5year development contract with IBM Bluemix. Citi is also using the IBM Bluemix cloud services to interact with startups, Nordea Bank in the Nordica, Tangerine bank in Canada, Adelaide Bank in Australia, and Bank Sohar in Oman.
Aliyun, the cloud computing arm of Alibaba (hybrid), continues to open data centers in Japan, Germany and Australia. The opening of the second US data center caught my attention. 2017 will be the year that Aliyun will strike international partnerships (beyond Intel, the Singaporean Telco, and Equinix, US data center provider) and grow further in Asia as the digitization of financial services continues.
Kapronasia reports that in 2013, Alibaba verticalized their cloud with the announcement of Ali Cloud for financial services. Aliyun is the only cloud provider that developed industry specific applications in the cloud (more like Salesforce). Ant Financial developed a cloud based core banking solution, of course on Aliyun that they used and then sold to other banks. Kapronasia’s estimate is that around 40 organizations in China are using the Ali Financial Cloud including, banks, payment providers and even P2P platforms.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Efi Pylarinou is a Digital Wealth Management thought leader.