Thought Machine, the core banking startup set up by a gaggle of former Google engineers, has inked a global implementation partnership deal with IBM, gaining a heavyweight partner in its efforts to win over big clients.
Thought Machine has spent the last few years trying to solve one of the biggest problems in banking: how to replace the decades old legacy core systems which hamper the delivery of new customer-facing digital services.
The firm's answer is Vault, a cloud-native modern alternative that comes with a full suite of retail banking products that are implemented via a system of smart contracts and has cryptographic ledgers for watertight security.
In the last few months, Thought Machine's work has begun to bear fruit, with digital-only challenger Atom Bank signing on for the technology and Lloyds Banking Group making an investment in the startup as part of a strategic partnership.
IBM has already been a part of that process, working with Lloyds to explore Vault’s functionality and ability to deliver value for the bank and its customers, as well as the options available for further development and roll-out of the platform.
IBM and Thought Machine are also in "advanced discussions" with a number of other major banks around the world, touting Vault's cloud-native nature, which allows banks to fully realise the benefits of IBM Cloud.
Along with the new alliance with Thought Machine, IBM Services will create a global practice headquartered out of London which will bring together banking transformation and implementation expertise from existing consultants along with new hires to support the demand from banks for core overhauls.
Jesus Mantas, managing partner, IBM Global Business Services, says: "Most banks are constrained by their legacy core banking systems. Vault offers the first core banking platform built in the cloud from the ground up, massively scalable and with the flexibility to create and launch new products and services in days versus months, at unprecedented levels of cost and speed.
"Our relationship with Thought Machine enables us to provide a lower risk option for banks to reduce cost of operations and increase customer service and speed to market."
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