Podcast: Cloud migration ‘a should’ for FIs

Monetary establishments are prioritizing cloud migration as value discount and innovation proceed to be high 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 response to the tech supplier’s annual economics report, set for launch on April 15, banks are leaning into the cloud as they count on the next within the coming years: 

Temenos is a cloud and core banking software program supplier based mostly in Switzerland. It’s mortgage origination answer was chosen by $31.8 billion Commerce Financial institution in February to enhance the shopper 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 examine, 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 methods to strategy cloud migration. 

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

Whitney McDonald 10:16:53
Good day and welcome to The Buzz, a financial institution automation information podcast. My title 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 methods to choose a vendor methods to strategy transferring to the cloud, and a few knowledge on what banks are interested 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 title 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 received an prolonged position to guide our area for for the group. My background, I come from the business. I used to be for about 21 years at at Fiserv in a number of completely different roles primarily round gross sales and business with main groups across the globe. My final position there was with the posit options, which is a big group primarily centered within the US. And as a company, Temenos is at this time the biggest supplier of core banking purposes around the globe. We function round 3000 purchasers in about 150 international locations. We’ve a market main expertise platform that caters to completely different segments of the marketplace for completely different industries, giant, small positive 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 assets, now we have numerous current purchasers on this area. And I’m very excited concerning the alternative to be right here speaking to you and be main group on this territory.

Whitney McDonald 10:18:49
Nice. Properly, thanks once more for being right here. And for sharing slightly 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 an important 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 huge push for cloud migration? What are what are you type 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 all places 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 influence examine confirmed that about 51% of bankers imagine banks won’t personal any knowledge middle in 5 years, as a result of they are going to be transferring a lot of the purposes 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 turn out to be 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 can be at this time on on prem options, working on their very own knowledge facilities are taking a look at 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 possibly like a break down slightly bit what these conversations appear to be when a consumer approaches Temenos and says, You understand what, I do wish to migrate to the cloud. What’s that the 1st step? In fact, it’s it’s costly, and it may be a giant endeavor. 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 at the beginning, what we have to perceive is the banking surroundings as we all know has modified. Proper? We’ve demanding clients which can be on the lookout for providers 24/7 Um, now we have the rise of recent opponents, proper, you’re speaking about fintechs, you’re speaking about new banks, you’re speaking about bass suppliers, you’ve regulatory pressures out there, now we have very robust nonetheless very robust market circumstances with rates of interest being excessive. So all of that put pressures on the banks to turn out to be extra modern to vary the methods they’re doing issues. Additionally, you’re taking a look at new efficiency metrics and efficiency drivers, proper innovation, buyer centricity, operational efficiencies, danger, compliance, synthetic intelligence, AI, is everywhere. So so there’s a variety of pressures within the banks to do issues in another way in rethink the best way 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 of present enhanced buyer expertise. They’re gonna have scalability benefits, adaptability benefits, you’ve, you’ve a variety of automation, inside throughout the cloud world deployment velocity, the hyperscalers have invested so much in safety, enterprise agility. So once more, the cloud is the place the banks will be capable of compete and thrive within the digital world. You have a look at the wave of fee suppliers and Neo banks on the market, they usually’re constructed from scratch on the most recent cloud expertise. And within the incumbent, which can be utilizing nonetheless these legacy programs that spaghetti programs 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 by way of 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 carry. So from from the good thing about speaking by way of the advantages, and the necessity to keep aggressive, is certainly key right here. So possibly we are able to discuss what these concerns are. There’s clearly the professionals that we simply talked by way of. Nevertheless it’s not simply as straightforward as okay, we’re going to maneuver to the cloud now. So how do you actually think about value? How do you think about what it’s going to ivolve a time dedication? What does that sound like once you’re once 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, greater high quality, so So the positive establishments, the banks, they have to be ready for it, guarantee that they’ve the proper assets in place to tackle the world of cloud, in addition they have to guarantee that they’re working with with distributors with companions, they’ve a broad and deep set of cloud native banking capabilities. Identical identical requires that we simply talked about for the banks you’ve internally with their very own assets, it’s best to count on 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 once I look internally at 10, home windows, proper, now we have 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 company that has been doing this for for a few years now. We’ve each on premise purchasers and SAS purchasers, and in a variety of our on prem purchasers is X have truly carried out the our purposes 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 software 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 after they’re making their transfer to the cloud.

Whitney McDonald 10:26:28
Numerous the conversations that now we have 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 type 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 possibly we are able to discuss slightly bit extra about the place terminos matches in. So 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 had been one of many pioneers to maneuver core banking and our purchasers to the cloud. And what’s what’s attention-grabbing and vital about 10 minnows is that we weren’t solely speaking a few retail software or company software, we’re, we’re one single platform that works in all around the globe 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 sorts of establishments, however we additionally work with completely different segments of the market. So one single platform that caters to retail, small enterprise, company non-public wealth, now we have an finish to finish channel answer that does each the digital piece on-line banking, but additionally originations onboarding, now we have options for fraud monitoring AML. So funds hubs. So we, in all these options are cloud native, and in in cloud agnostic, which means that we can assist our purchasers in that journey into the cloud, not solely with their core, but additionally with these additionally supporting options that revolve across the core. And the composability of our purposes is essential, as a result of when a consumer is testing the waters with the cloud, they will not be keen to maneuver your entire platform without delay. So with the best way the structure works, you possibly can transfer bits and items as as you you are feeling comfy with. So possibly you’ve a technique, you’re going to begin 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 resolve what makes most sense. So you possibly can you possibly can check you possibly can really feel comfy, you possibly can see all the things that’s working. After which you can begin transferring in keeping with your your wants and your your danger urge for food. So on the finish of the day, you’ve a accomplice in 10 Home windows that means that you can transfer not solely your core banking at your velocity and your need, but additionally transfer all the opposite platforms that help 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 should do it abruptly you possibly can type 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 should 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 your small business technique and your danger urge for food, and the way comfy you’re with the transfer, you possibly can resolve 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 shortly 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 a variety of belief in what now we have been capable of present the market. And, and we’re seeing a variety 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 by way of some advantages, we’ve seen the carry and shift. However what do you assume is subsequent inside this cloud banking mannequin? How is that this cloud migration evolution altering? What are you waiting for? 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 best way the banks devour expertise, proper? They’re transferring to SAS, we finish with a SaaS providing, you’re mainly allocating all these high quality, the tasks round managing the infrastructure, managing the safety, the the monitoring the daily operations, the shut of enterprise, the updates the upgrades, placing that within the fingers of a of a vendor, proper, a company like like dominoes on a cloud surroundings. So we’re seeing them transfer increasingly more that could be very, it’s a mannequin that has been in place, particularly in North America for a few years. However we’re seeing that increasingly more around the globe as nicely. That took slightly longer to adapt and to undertake that knowledge. Name it the the SAS mannequin or simply placing With all that accountability within the fingers of a vendor, now, what we’re seeing as the following wave is, is actually is Cloud Analytics, proper the quantity of name it what the banks can do with all the info that may be obtainable within the cloud, as a result of cloud means that you can permits the scalability to essentially transfer super quantity of information in and in with the velocity and scalability that it is advisable, to have the ability to handle that. And with with Cloud Analytics, banks will be capable of to have actual time perception into buyer behaviors, market developments. And that’s tremendous vital as they’re launching their new merchandise and their subsequent finest provide and the way they’re managing different features of their enterprise equivalent to danger profiling, Fraud Administration, so on and so forth. So So with a extremely scalable, says mannequin, along with a strong 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 observe us on LinkedIn. And as a reminder, you possibly can charge this podcast in your platform of selection. Thanks to your time, and you’ll want to go to us at Financial institution automation information.com For extra automation information,

Transcribed by https://otter.ai

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