Blending technological and industry prowess that few if any competitors can match, IBM is fully exploiting its financial-services expertise by creating that industry’s first public-cloud platform with Bank of America as an anchor tenant.
This superior combination of extensive cloud-computing capabilities with several decades of experience in managing mission-critical workloads for financial institutions across the globe puts IBM in a great position to become a preferred cloud vendor for a complex and highly regulated industry that’s eager to accelerate its move into the public cloud.
Because of the stringent regulatory requirements regarding compliance, security and resilience, many banks and other financial institutions have been loath to pursue public-cloud deployments. The reluctance has persisted in spite of the various business advantages the cloud would deliver.
The Financial Services-Ready Public Cloud
IBM hopes to change all that. And it plans to do so with what it’s calling a “financial services-ready public cloud.” While that nomenclature’s rather industrial, the wide-ranging appeal of the platform plus IBM’s banking-industry knowledge has generated a huge collaborative commitment from Bank of America.
Calling the partnership with IBM “one of the most-important collaborations in the financial-services industry cloud space,” Bank of America chief operations and technology officer Cathy Bessant cited a few specific benefits. Specifically:
- It allows the bank to use the public cloud while meeting or exceeding all industry requirements for data security, resiliency, privacy and customer information.
- And it could well lead the way to a public-cloud “safety level that is unmatched,” Bessant said in a press release announcing the platform and the collaboration.
A New Hope for IBM
My take on this deal is that it represents a breakthrough opportunity for IBM to become a front-of-the-pack innovator in the Cloud Wars. The #7 vendor in my Top 10 rankings has a unique opportunity here. Namely, to pair its wide-ranging and deep technology capabilities with something else that no other tech vendor can match: its long and deep client relationships spanning not only financial services but every major industry on the planet.
Relying exclusively on its cloud technology, IBM has put together a vast fleet of cloud services and technology and cloud revenue for the past 12 months of $20 billion. But it hasn’t been much of a player, influencer or driver of customer-centric innovation.
However, the pairing of all that tech expertise with deep industry expertise could be a game-changer for IBM.
To dig into how IBM fused those two sets of capabilities, I asked for and received some extensive insights from Hillery Hunter. Hunter is an IBM VP and CTO for IBM Cloud, and also an IBM Fellow. Here are two sets of questions, highlighted in italics, that I sent to Hunter via email, followed by her replies.
How IBM Won Over Bank of America
1) All of the major cloud vendors would love to be able to help banks move to the public cloud. What are the unique capabilities of the IBM Cloud that allowed IBM to turn that wish into a reality? What can the IBM Cloud do for these financial institutions that’s beyond the ability of other cloud vendors?
Hunter: “Banks operate in an incredibly complex regulatory environment and are required to demonstrate compliance to regulators, typically once every 6 or 12 months. It is a process that is highly costly when a financial services institution has a rich ecosystem of vendors and partners. To make it easier for banks to demonstrate compliance, the financial services-ready public cloud has key controls and security features built right into its very core and ‘code’. Banks will be able to be as compliant on the public cloud as they are within their own data centers, and they can demonstrate compliance on a continuous basis, rather than every few months…
“The financial-services-ready public cloud is the only industry-specific public cloud platform that can provide preventative and compensatory controls for financial services regulatory workloads, multi-architecture support and proactive and automated security, leveraging the industry’s highest levels of encryption certification.”
At this point, Hunter blended in IBM’s cybersecurity expertise with its deep understanding of banking-industry requirements from its Promontory subsidiary. She also spoke to the benefits of the close collaboration with Bank of America.
“IBM collaborated with Bank of America to develop the control requirements for the platform, leveraging the security and compliance expertise gained through protecting their 66 million banking customers.
“And lastly, [IBM subsidiary] Promontory brings extensive regulatory experience to the collaboration. Promontory analyzed bank policies, industry regulations and cloud best practices to help promote a cloud platform that enables banks to address relevant regulations. Promontory will continue to play a defining, ongoing role, updating the policy framework as regulations evolve.
Inside the IBM & Bank of America Parnership
2) Bank of America is described as a “committed collaborator” and that’s a potentially fascinating partnership. What’s the difference between a traditional customer and a “committed collaborator”? Does IBM plan to work with other financial institutions as “committed collaborators”? If so, what might those collaborations with IBM focus on?
Hunter: “Bank of America has an unwavering commitment to the security and privacy of their banking customers and collaborated with IBM to put the data security, resiliency, privacy and customer-information safety needs front and center in their decision-making. In addition to hosting its key applications and workloads on the financial services-ready public cloud, Bank of America collaborated to help develop the right set of control and security requirements for the platform and address critical concerns related to deploying highly confidential workloads on the cloud. Together, they also worked with Promontory, who will continue to play a defining, ongoing role, updating the compliance framework as regulations evolve.
“IBM welcomes other financial-services institutions as customers and collaborators to address their ongoing compliance requirements.” (That’s the end of Hunter’s comments.)
IBM did not give a date for general availability of the platform, and the company did not release any financial details relating to public-cloud deal with Bank of America.
Disclosure: at the time of this writing, IBM was a client of Evans Strategic Communications LLC.
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