I interviewed Paul Taylor co-founder and CEO of Thought Machine last week to find out more about what the company is doing in terms of replacing legacy core banking systems.
When it was revealed that Lloyds bank is moving hundreds of thousands of customer accounts from legacy systems to Thought Machine, I needed to hear more.
The interview with former Google tech lead Paul Taylor, was very revealing. The company is offering big banks an IT infrastructure designed and run like Google, and all on a pay as you use model. After a decade writing about banking IT and asking when legacy systems will be replaced it at leasr sounds like the tech know how is there if banks want it.
But the headline of the Thought Machine story for me is the fact that Lloyds bank plans to move 500,000 Intelligent Finance division customer accounts from its legacy IT onto Thought Machines Vault platform. All fintechs have great stories to tell. But to have a customer of the size of Lloyds bank announcing its plans with Thought Machine gives the story weight.
But there could be another big story bubbling away, although certainly not announced. Sometimes when you are a journalist interviewing people you links and don’t realise connections until later. So during the interview with Taylor we discussed how challenger bank Atom, is also a customer. Okay not as exciting as Lloyds in terms of scale, but it is 40% owned by Spanish giant BBVA, with talk of the bank eyeing a takeover.
During the interview with Taylor told me that the company’s customers are all tier one banks and most of them are currently using Thought machine banks to set up a digital challenger bank. They do this to see how it goes, so they can build confidence within the bank, the customer base and at the regulators. Eventually when everyone is happy they switch everything to the new digital bank.
So maybe it is BBVA that is the long term customer and it is using Atom on as a stepping stone to migrating from its legacy systems.
BBVA and Lloyds Banking Group have tens of millions of customers so we could finally beginning to see the tier one banks get rid of systems they have relied on for decades.