Home Finance Podcast: Cloud migration ‘a should’ for FIs

Podcast: Cloud migration ‘a should’ for FIs

Podcast: Cloud migration ‘a should’ for FIs


Monetary establishments are prioritizing cloud migration as value discount and innovation proceed to be prime of thoughts. 

“We undoubtedly see cloud migration as a should,”  Rodrigo Silvaregional director for the Americas at Temenos, tells Financial institution Automation Information on this episode of “The Buzz” podcast. 

In keeping with the tech supplier’s annual economics report, set for launch on April 15, banks are leaning into the cloud as they anticipate the next within the coming years: 

Temenos is a cloud and core banking software program supplier primarily based in Switzerland. It’s mortgage origination answer was chosen by $31.8 billion Commerce Financial institution in February to enhance the client expertise for financial institution purchasers. Different temenos purchasers embody $521 million Varo Financial institution, $156 billion Areas Financial institution and $142 billion Alex Financial institution. Its economics research, which features a survey of 300 banking executives, is accomplished yearly, in keeping with the corporate. 

Hear as Temenos’ Silva discusses the way forward for the cloud in banking, what purchasers are requesting and the best way to strategy cloud migration. 

The next is a transcript generated by AI expertise that has been evenly edited however nonetheless comprises errors.

Whitney McDonald 10:16:53
Howdy and welcome to The Buzz, a financial institution automation information podcast. My identify is Winnie McDonald and I’m the editor of financial institution automation Information. At the moment is April 11 2024. Becoming a member of me is Rodrigo Silva. He’s the pinnacle of North America tech supplier terminos. He’s right here to debate cloud migration, together with the best way to choose a vendor the best way to strategy transferring to the cloud, and a few information on what banks are fascinated by the way forward for banking with regards to the cloud. Welcome to the buzzer. I’d be go.

Rodrigo Silva 10:17:18
Sounds good. Whitney, thanks. It’s nice to be right here. My identify is Rodrigo Silva. I’m the Regional Director for 10 minerals for the Americas. I joined Temenos, nearly a 12 months and a half in the past, and just lately obtained an prolonged position to guide our area for for the group. My background, I come from the trade. I used to be for about 21 years at at Fiserv in a number of totally different roles primarily round gross sales and industrial with main groups across the globe. My final position there was with the posit options, which is a big group primarily targeted within the US. And as a corporation, Temenos is at this time the most important supplier of core banking functions world wide. We function round 3000 purchasers in about 150 international locations. We’ve got a market main expertise platform that caters to totally different segments of the marketplace for totally different industries, giant, small high-quality establishments. And, and North America is a really strategic, or area for us, the place we’re investing in, in our product, in in expertise in our cloud providers, on sources, we’ve a lot of present purchasers on this area. And I’m very excited in regards to the alternative to be right here speaking to you and be main group on this territory.

Whitney McDonald 10:18:49
Nice. Nicely, thanks once more for being right here. And for sharing a bit bit about your background. I’m excited right here at this time we’ll be speaking about cloud migration. And naturally, along with your background and within the position that you just’re in at this time. I’m positive that it’ll be a terrific dialog. So with that, why don’t we simply begin right here with the place we stand at this time with cloud migration? What are you listening to from financial institution purchasers? Is there nonetheless this massive push for cloud migration? What are what are you sort of following and listening to out of your purchasers? Yeah,

Rodrigo Silva 10:19:18
completely. So so with the there’s extra confidence than by no means proper? The general public clouds has has now a stronger presence in, in in every single place in banking, tons of funding by the hyperscalers. Financial institution see value reductions and innovation being key for for the banking world. These days, adopting cloud is a should. We we see future, the way forward for banking is within the cloud. Our newest economics economist affect research confirmed that about 51% of bankers consider banks is not going to personal any information middle in 5 years, as a result of they are going to be transferring many of the functions to the general public cloud. That’s that’s extra so in North America than anyplace else. We noticed out of the respondents that that 36% of banks are prioritizing, transferring their home core banking to the cloud, in comparison with 26. Banks. globally. We additionally noticed that the 79% of North America respondents mentioned that multi cloud technique might change into a regulatory prerequisite within the subsequent 5 years, in comparison with about 60%. In Europe. So we undoubtedly see cloud migration as as a should. Our purchasers are, are contacting us purchasers which might be at this time on on prem options, working on their very own information facilities are transferring to the cloud, both their very own cloud suppliers or transferring to our SAS operation the place we handle the hyperscalers on behalf of our purchasers a

Whitney McDonald 10:21:09
couple of issues to interrupt down there, in fact, nice stats, so thanks a lot for placing some numbers to it, however perhaps like a break down a bit bit what these conversations appear to be when a consumer approaches Temenos and says, You realize what, I do need to migrate to the cloud. What’s that the first step? In fact, it’s it’s costly, and it may be a giant enterprise. So what are these conversations initially appear to be?

Rodrigo Silva 10:21:33
It’s all about the advantages, proper that our purchasers will see with the cloud. And initially, what we have to perceive is the banking surroundings as we all know has modified. Proper? We’ve got demanding clients which might be in search of providers 24/7 Um, we’ve the rise of latest rivals, proper, you’re speaking about fintechs, you’re speaking about new banks, you’re speaking about bass suppliers, you will have regulatory pressures out there, we’ve very powerful nonetheless very powerful market circumstances with rates of interest being excessive. So all of that put pressures on the banks to change into extra modern to vary the methods they’re doing issues. Additionally, you’re new efficiency metrics and efficiency drivers, proper innovation, buyer centricity, operational efficiencies, threat, compliance, synthetic intelligence, AI, is everywhere. So so there’s plenty of pressures within the banks to do issues in a different way in rethink the way in which they’re working at this time. And cloud brings precisely that with Cloud, they’re going to see value efficiencies, they’re going to see and be capable to present enhanced buyer expertise. They’re gonna have scalability benefits, adaptability benefits, you will have, you will have plenty of automation, inside inside the cloud world deployment pace, the hyperscalers have invested lots in safety, enterprise agility. So once more, the cloud is the place the banks will be capable to compete and thrive within the digital world. You have a look at the wave of cost suppliers and Neo banks on the market, and so they’re constructed from scratch on the most recent cloud expertise. And within the incumbent, which might be utilizing nonetheless these legacy techniques that spaghetti techniques as we joke, are, are actually not suited to to the calls for of this digital period. So so it’s fairly frankly, a race towards obsolescence. The transfer to cloud will give the banks the agility, they should go to market with new merchandise and, and cater to their purchasers wants, and actually future proof their expertise stack.

Whitney McDonald 10:23:48
Yeah, you simply talked via just a few advantages. In fact, the aggressive facet, you talked about that fintechs are constructing on Cloud, they’re not likely having to do this elevate. So from from the advantage of speaking via the advantages, and the necessity to keep aggressive, is certainly key right here. So perhaps we are able to discuss what these concerns are. There’s clearly the professionals that we simply talked via. But it surely’s not simply as straightforward as okay, we’re going to maneuver to the cloud now. So how do you actually take into account value? How do you take into account what it’s going to ivolve a time dedication? What does that sound like while you’re while you’re discussing that along with your purchasers?

Rodrigo Silva 10:24:24
Yeah, you’re completely proper. Proper. It’s it’s an entire shift to a brand new set of various practices. You’re speaking about automated testing, design, a extra of a buyer centricity mannequin, that the necessity for accelerated manufacturing environments, shorter supply cycles, larger high quality, so So the high-quality establishments, the banks, they have to be ready for it, make it possible for they’ve the appropriate sources in place to tackle the world of cloud, in addition they have to make it possible for they’re working with with distributors with companions, they’ve a broad and deep set of cloud native banking capabilities. Similar identical requires that we simply talked about for the banks you will have internally with their very own sources, you must anticipate that out of your distributors and out of your companions, proper. So having having confirmed cloud supply confirmed is scalability, confirmed migration credentials expertise doing so. So after I look internally at 10, home windows, proper, we’ve expertise of working with 700 SAS purchasers at this time, they’ve already migrated or began in our SAS surroundings. So huge scalability, proper, we’re a corporation that has been doing this for for a few years now. We’ve got each on premise purchasers and SAS purchasers, and in plenty of our on prem purchasers is X have really applied the our functions on their very own cloud suppliers, proper, that being AWS, or your or, or what have you ever, as a result of we’re an utility that day. That’s that’s cloud agnostic. So once more, deep expertise, understanding of the regulatory surroundings, understanding of the safety surroundings, ensuring that you just’re compliant, and having a few years in our case, 30 years working with with financial institution IP is important for, for our purchasers to to achieve success. And they need to be contemplating all of that once they’re making their transfer to the cloud.

Whitney McDonald 10:26:28
A variety of the conversations that we’ve is about that vetting course of and ensuring that the distributors that you just do choose have those self same, whether or not it’s safety and even simply values and sort of what you’re making an attempt to perform all line up. So yeah, that undoubtedly resonates. I do know that you just additionally simply talked about tendonosis cloud agnostic So perhaps we are able to discuss a bit bit extra about the place terminos matches in. So if in case you have a consumer that as mu is transferring towards the cloud, what does that appear to be for terminos? How do you guys assist alongside that journey? Yeah,

Rodrigo Silva 10:27:01
completely. So we’ve been on that journey for for a few years, and evolving our cloud. Providing for a few years, we have been one of many pioneers to maneuver core banking and our purchasers to the cloud. And what’s what’s fascinating and essential about 10 minnows is that we weren’t solely speaking a few retail utility or company utility, we’re, we’re one single platform that works in all world wide for various several types of purchasers, these being small for establishments, giant completed tuitions, credit score unions, neobanks, Challenger banks. And we not solely, not solely we work with a number of forms of establishments, however we additionally work with totally different segments of the market. So one single platform that caters to retail, small enterprise, company non-public wealth, we’ve an finish to finish channel answer that does each the digital piece on-line banking, but in addition originations onboarding, we’ve options for fraud monitoring AML. So funds hubs. So we, in all these options are cloud native, and in in cloud agnostic, that means that we may also help our purchasers in that journey into the cloud, not solely with their core, but in addition with these additionally supporting options that revolve across the core. And the composability of our functions is essential, as a result of when a consumer is testing the waters with the cloud, they is probably not keen to maneuver the whole platform directly. So with the way in which the structure works, you possibly can transfer bits and items as as you you’re feeling comfy with. So perhaps you will have a method, you’re going to start out with the posits solely as MVP one and sooner or later begin transferring then your lending and your credit score merchandise into the cloud. So you possibly can determine what makes most sense. So you possibly can you possibly can take a look at you possibly can really feel comfy, you possibly can see the whole lot that’s working. After which you can begin transferring in keeping with your your wants and your your threat urge for food. So on the finish of the day, you will have a companion in 10 Home windows that lets you transfer not solely your core banking at your pace and your need, but in addition transfer all the opposite platforms that assist the core and encompass the core into right into a core surroundings.

Whitney McDonald 10:29:30
Which makes it much less daunting, proper? You don’t need to do it you possibly can sort of do it piece by piece and see the way it works after which decide okay, what’s the following piece that we should always transfer over? You don’t need to do it multi function fell swoop.

Rodrigo Silva 10:29:45
That’s completely right. So you possibly can take your time. And relying on what you are promoting technique and your threat urge for food, and the way comfy you’re with the transfer, you possibly can determine which items to maneuver first. And once more, that’s these are the kind of conversations that we like to have with purchasers. I’m very lucky that in my position, I’ve an opportunity to talk with many banking executives and discuss to them and with them about, you understand, what are their urge for food to maneuver to cloud? And we confirmed some stats earlier on it, everybody’s speaking about it. And the query is, how rapidly can we transfer? And what ought to we transfer first? And who’re we going to be working with and we’re glad to see that there’s plenty of belief in what we’ve been in a position to present the market. And, and we’re seeing plenty of curiosity in, on this transfer.

Whitney McDonald 10:30:32
So we’ve been seeing or following alongside this cloud migration journey. For fairly a while. We talked via some advantages, we’ve seen the elevate and shift. However what do you suppose is subsequent inside this cloud banking mannequin? How is that this cloud migration evolution altering? What are you looking forward to? What’s subsequent in your perspective?

Rodrigo Silva 10:30:56
Yeah, so what we’re seeing is the market is altering. And so is the way in which the banks eat expertise, proper? They’re transferring to SAS, we finish with a SaaS providing, you’re mainly allocating all these high quality, the obligations round managing the infrastructure, managing the safety, the the monitoring the each day operations, the shut of enterprise, the updates the upgrades, placing that within the arms of a of a vendor, proper, a corporation like like dominoes on a cloud surroundings. So we’re seeing them transfer an increasing number of that may be very, it’s a mannequin that has been in place, particularly in North America for a few years. However we’re seeing that an increasing number of world wide as properly. That took a bit longer to adapt and to undertake that information. Name it the the SAS mannequin or simply placing With all that duty within the arms of a vendor, now, what we’re seeing as the following wave is, is absolutely is Cloud Analytics, proper the quantity of name it what the banks can do with all the info that may be out there within the cloud, as a result of cloud lets you permits the scalability to actually transfer great quantity of knowledge in and in with the pace and scalability that it’s good to, to have the ability to handle that. And with with Cloud Analytics, banks will be capable to to have actual time perception into buyer behaviors, market developments. And that’s tremendous essential as they’re launching their new merchandise and their subsequent greatest supply and the way they’re managing different features of their enterprise corresponding to threat profiling, Fraud Administration, so on and so forth. So So with a extremely scalable, says mannequin, along with a sturdy localization and native operations, proper, the banks can really feel comfy on transferring into into the cloud surroundings and, and once more, with a vendor that has been doing that for some time.

Whitney McDonald 10:33:04
You’ve been listening to the excitement, a financial institution automation information podcast, please comply with us on LinkedIn. And as a reminder, you possibly can price this podcast in your platform of selection. Thanks to your time, and make sure to go to us at Financial institution automation information.com For extra automation information,

Transcribed by https://otter.ai



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