Canadian banks quickly move to the cloud amid COVID-19, fintech competition – National

Canada’s major banks are experiencing an exodus.


Faced with increased competition from startups, higher expectations from consumers and growing digital demands of COVID-19, experts say banks are accelerating the process. converter works to the cloud from legacy computer systems.

Robert Vokes, Accenture’s managing director of financial services at Accenture, said the move started before the pandemic hit, but the sudden closure of branches and offices in March 2020 forced banks must rely more on online systems and promote acceleration.

“What happened last March, people suddenly realized, ‘Oh my god, I have to go so much faster.’ That is a big warning. “

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Cloud-based systems, sometimes run by private banks and more commonly by third-party tech giants, allow data to move faster and more freely, and at the same time. giving potential banks more customization for each customer, more automation, and potential cost savings.

Vokes says such promises have been around since the dot-com bubble, but that the hardware has only worked in recent years.

“We didn’t really have scalable technologies, and now those technologies have caught up.”

Several banks have made major cloud commitments in recent months, including CIBC’s deal with Microsoft’s Azure, Scotiabank reaching an agreement with Google Cloud, and BMO partnering with Amazon Web Services when all both promote a “priority cloud” strategy.

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BMO recently completed its first major system change since partnering with Amazon by moving its entire transportation finance operation to the cloud, which involved moving about a thousand servers of data to the cloud. Whether.

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Sid Deloatch, North American commercial banking chief information and operations officer at BMO, said the bank made the move because it ultimately believed the cloud infrastructure was established and reliable enough. trust.

“We’ve had to hit that threshold of expectation and we feel it exists and we’re very confident that it’s alive right now, and that’s why we’re moving forward.”

This change makes it possible for BMOs to make automated lending decisions in many cases, as well as save up to 30% in operational costs, he said.

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Along with waiting to gain confidence in new systems, banks are also held back by the patchwork of systems, said Sanjay Pathak, head of technology strategy and digital transformation at PwC. Inheritance built over decades.

“Removing current operations from some legacy technology is very, very complex, and it can be very risky and disruptive to business.”

Just getting executives in the right mindset, he said, is challenging, as it means letting go of control of the underlying infrastructure built over decades.

But banks can no longer delay as they are feeling consumer pressure as well as employee expectations for more seamless processes, Pathak said.

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Smaller banks without extensive legacy systems were able to move faster, such as EQ Bank moving its entire system to the cloud in 2019, while financial startups has the advantage of starting in the cloud and forcing banks to respond.

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“There is a huge pressure that is being exerted on financial services from fintech and fintech that are often born in the cloud. Hillery Hunter, chief technology officer of IBM Cloud, said:

Banks are moving more of their core systems to the cloud, she said, because so many data sources need to be integrated and made available to be able to do things like instant loan decisions.

“(Consumers) are all getting pretty impatient and we expect everything to be available immediately.”

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However, increasing reliance on third parties to store so much of a bank’s activities, including personal financial data, is raising concerns from regulators.

The Bank of England said in October that additional policy measures are likely to be needed to “minimize financial stability risks stemming from a focus on providing certain third-party services”. father”.

Canada’s banking regulator released draft guidance on technology and cyber risks earlier this month, saying banks should strategically plan their exit from third-party cloud providers and ensure that they can migrate data from one cloud provider to another. It plans to release more specific instructions to third parties early next year.

But while the main concern right now is about data security and making sure the big tech companies don’t have too much power in dictating terms of service, competition could also emerge as a threat. threat, Pathak said, because the big tech companies both have the size and speed of being a threat.

“I think there’s more and more tension around cloud service providers becoming competitors as well… that’s a real threat to banks.”

© 2021 Canadian Press

https://globalnews.ca/news/8408124/canada-banks-cloud-covid/ Canadian banks quickly move to the cloud amid COVID-19, fintech competition – National

Aila Slisco

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