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Financial Cloud Summit 2023: ChatGPT says banks should be multi-cloud

Financial Cloud Summit 2023: ChatGPT says banks should be multi-cloud

Cloud migration is a major part of the financial industry today; traditional banks and emerging fintechs are in process of transitioning online to cloud services to become scalable, agile, and operate at a higher level.

As new cloud strategies emerge, the migration process becomes more complex in dealing with regulatory fragmentation, multiple options in cloud providers, and a unique array of approaches to the transition. The second stage of the cloud summit discusses how financial institutions are navigating their migration to the cloud.

Finextra’s head of content Madhvi Mavadiya moderates a fireside chat with senior operations and change management director at OakNorth, Neil Robinson, on OakNorth’s cloud migration journey with Amazon Web Services and their operations on the cloud.

OakNorth was the first bank in the UK to fully operate on the cloud as of May 2016. The bank’s partnership with AWS facilitated how they designed their cloud platform. Commenting on the most exciting benefit in operating on AWS, Robinson states: “The flexibility and ability to change is definitely high on the agenda. We have been able to launch products to market very quickly, by having bank in the cloud effectively. AWS also test the learning curve a lot earlier, allowing you to fail fast and move forward.”

AWS was the best choice for OakNorth due to their high security standards, Robinson details, which made it easy for the bank to operate across regions, leverage P2P testing, and maintain a high level of resilience throughout.

When asked about operational resilience as the responsibility of the bank, Robinson remarks that resilience measures are likely more complex with larger and older banks, whereas resilience is designed into OakNorth as a newer bank that was considering online risk when establishing their offerings.

Robinson mentions that the FCA is an innovative regulator and they are picking up on how the industry is changing, and it is essential to have the support of authorities to operate under their guidelines and frameworks to design products and services within the cloud infrastructure up to their expected standards.

When asked about security operations on cloud versus on premise, Robinson explains that cloud can invest more in security, which can then be outsourced where it can be applied at a higher standard. This leads into the build or buy debate – how do banks decide building in-house as opposed to buying from outside parties. Robinson believes that considering skillsets and ability to build offerings within the bank is a good way of considering whether to build products in-house or look elsewhere.

Commenting on how he defines a successful cloud migration in terms of agility, scalability, and disaster recovery, Robinson explains that customer outcomes and digital evidence are key indicators, and that rebuilding core banking infrastructure around operational resilience is significant.

Paige McNamee, senior reporter at Finextra, returned to the stage for the second Migrate session of the day on customer experience and keeping pace with demand. Ange Johnson De Wet, cloud enabled business transformation - head of function, Lloyds Banking Group; Monica Sasso, EMEA FSI chief technologist, Red Hat; and Martin Bradbury, regional director, financial services industry, Dynatrace.

The session covered how financial institutions can strike the balance between migration processes taking servers temporarily offline, ensuring data does not become unavailable or at risk of breach and keep pace with loyalty or personalisation initiatives, at the same time.

Johnson De Wet believes that “everything starts with the customer.” All users and customers are humans and banks, when establishing new products and services, should understand that their expectations are shaped by the experiences they are having with their financial services providers, but also their experience with social media.

Further to this, she added that transparency is crucial to the customer. A good example would be the Chase website, where they have a list of every outage they’ve ever had. As Johnson De Wet explained, human attention span continues to shrink – it is currently averaging at eight seconds, one second less than a goldfish.

Connecting this with social media, customer experience and ultimately, the cloud, she furthered that while some agree that personalised adverts are useful, a staggering “53% think that they are creepy.”

In Sasso’s view, “we’re all customers of a bank, or many banks and a few fintechs and startups. We want it fast, we want transparency and we want the journey to be the same.” Both software and hardware must support customers, but how can this be done, when everyone is different?

Bradbury added: “I don’t care about the tech being used by my bank, in the same way I don’t care what gets electricity and gas to my house. I just want the service to be there. We don’t tolerate unavailability and downtime anymore.”

McNamee posed a poll question to the audience and asked them: when was the last time your business reached out to existing or potential customers to ask them about the customer experience? 43% said they had in the last month.

Johnson De Wet stated that this task was “critical”; Sasso continued to say that banks must ensure to ask the extremes, the younger generations and older generations that we aren’t polling; Bradbury mentioned that banks should go “beyond being reactive and be proactive.”

At the end of the day, a treasurer within a bank has the same expectations as a retail customer. They want uptime, no outages, want to know the data is safe and want to know that improvements are being made. She went on to quip that before the session she had asked ChatGPT whether a big incumbent bank should move 100% of their infrastructure to the public cloud.

ChatGPT’s response was no, a big incumbent bank should be multi-cloud. Bradbury referenced the significant public cloud outage that occurred a few weeks ago. This had a substantial impact because all businesses rely on it and although multicloud can make a difference to resilience, there needs to be a trade off between that and managing complexity.

Sasso followed on from this to say that even though there is “no model example for a successful cloud migration,” a strategy for public and private cloud is important. Decisions must not be made in a haphazard way, because that is when things go wrong.

Johnson De Wet had a similar view and said that financial institutions must “do your homework.” To conduct a “good migration,” banks need to understand their current state and figure out whether the customer experience will change before, at, or after migration. She said that “before is much easier than hooking them into the go live date,” and when considering a long term plan, banks must think about multiple releases and think agile.

Bradbury agreed with Johnson De Wet and stated that “dependency is the biggest problem. A communication strategy is needed, as well as business change integration. There is no model.” Sasso, considering ChatGPT, called into AI into question and said that if no one cannot explain what the algorithm is doing and what the business value is, the product must be killed off.

Returning to the social media example, she went on to say that we all know the impact social media is having on us and financial institutions must avoid going into the same rabbit hole with personalisation. “We must drive better outcomes for our customers and get the product at the right time.”

As a concluding comment, Bradbury stated: “if you don’t understand your customers, don’t migrate because you have bigger problems to deal with.”

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