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Global banks tire of slow cloud development

Three of the world's biggest banks are forming a syndicate that will allow them to buy IT at a lower price and develop cloud computing platforms themselves.

A...

Three of the world's biggest banks are forming a syndicate that will allow them to buy IT at a lower price and develop cloud computing platforms themselves.

A report in the Australian Financial Review (AFR) said Commonwealth Bank of Australia, Bank of America and Deutsche Bank will form a buying syndicate next month. This would allow them to get better deals.

Website ITwire reports that Michael Harte, Commonwealth Bank CIO and group executive for operations and technology, speaking at the Committee for Economic Development of Australia, said the big suppliers are holding back from the cloud because of their reliance on annuity income.

"You would think that IBM and HP and Oracle and Microsoft, the big household names, would be driving this change but they are still very dependent on accounting standards and still very dependent on annuity income, and they haven't made the transition fast enough," said Harte.

Harte said where the bank found solutions to reduce the cost of its infrastructure, it would share them. He also said the three banks could internationally agree on how data could be stored and processed and take it as a standard to regulators.

"It is hard to tell if this is just a procurement play or a broader initiative, clearly the official announcement will tell us that. It is interesting that even the biggest players appear to believe that they still need more scale than they have individually to enable themselves to negotiate with the large providers, both in terms of price and product direction," said one industry source.

"I guess we have to wait for the announcement as and when it comes."

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