The Banking Industry Architecture Network (Bian) called on the industry to move beyond technical discussions and consider which of their core systems banks can move to cloud platforms and share.
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Bian has written a white paper identifying 280 core bank processes that could be conducted in the cloud. These include payment execution, party identification and cheque processing.
Bian is a not-for-profit organisation that promotes common banking architecture, with a membership split 50:50 between global banks and IT suppliers. There are no UK banks among its membership, but it does include European organisations Deutsche Bank, UBS, ABN AMRO and Société Générale; as well as banks in anglophone regions such as North America and Australia. IT suppliers Microsoft, Infosys, Tata Consultancy Services and SAP are members.
Hans Tesselaar, executive director at Bian, said that, up until now, most discussions about the cloud in the finance industry were related to security and resilience.
Tesselaar said it is time banks identified the systems they run internally and their interdependencies. He said this will enable them to put individual processes on cloud platforms.
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“The whole cloud discussion is currently a technical discussion, but we are talking about functionality,” he said, adding that most banks use private cloud, so it is time they established what can be in the cloud. While banks are using public cloud for support functions such as procurement and HR, core systems cannot go public due to regulatory issues.
“The cloud-based solutions operate as a loose-coupled network, allowing banks to form alliances with other banks, specialist service partners and even to integrate their services in their customer’s operations,” said the Bian report. “The conventional product and service boundary banks have with their customers blurs as banks offer more flexible operational access to their core capabilities, such as cash flow management, currency exchange and cash management, financial risk management, financing and access to primary and secondary investment exchanges.”
Bian identified 280 separate services banks run and said the next step should be to define the interactions between them.
Tesselaar said this will help identify which services banks can put in the cloud and make available to other financial services suppliers.
In the future, businesses outside the finance sector will be able to offer banks' systems to their customers. Tesselaar said the ultimate goal would be an app store for core processing systems for financial services firms.