Cloud native core banking enables consumers to personalise what they buy

Banks using Thought Machine’s cloud-based core banking system, known as Vault, can now offer millions of different varieties of financial products to millions of different customers through the technology’s latest release.

This is near-impossible for traditional banks to do on their legacy IT architectures, but can now be done by the customers themselves once they are approved on Thought Machine’s platform, using an app known as Vault Rare.

Offering customers the ability to edit the parameters of their financial products via a smartphone would traditionally require major surgery in core banking infrastructures at banks. Traditionally, banks have different core banking environments and systems for different products.

In fact, traditional banking infrastructures involve hundreds of legacy systems interlinked, with the creation of personalised products not feasible. This, for example, limits the number of different loans it can offer.

Thought Machine takes the common parts of these environments, which are up to 80% the same, and created code that banks can use to create a smart contracts.

Once customers are approved by the bank, they can use Vault Rare to make realtime changes to things like mortgage repayment periods, take loan repayment breaks and even release funds from a mortgage.

The Vault Rare app is linked to the core banking system, so changes made by the customer will create smart contracts which will be recorded in the core system. Smart contracts allow customers and banks to agree terms and sign off highly personalised agreements in minutes.

Mark Warrick, chief design officer at Thought Machine, said that rather than the customer being able to just change loan amounts and durations, the system can offer dozens of extra parameters they can edit. “Users can adjust obvious things like the amount, the duration and the payback frequency but can also add repayment breaks,” he said.

“This goes straight into their instance of a smart contract and banks can have millions of customers with millions of individually configured loans and mortgages.”

Thought Machine already works with a diverse group of banks, including Lloyds Banking Group, Atom Bank, Standard Chartered and Sweden’s SEB – all of which have gone public – as well as others yet to.

Ed Twiddy, chief customer officer at Atom Bank, said changing people’s relationship with their money is “at the heart of Atom” and a “cornerstone” of its three years of work with Thought Machine. “The launch of Vault Rare throws down the gauntlet to the idea that in banking one size fits all.”

Set up in 2016, Thought Machine is the London-based brainchild of ex-Google executives, including Paul Taylor, the internet giant’s former head of text to speech.

Its cloud native Vault platform is Google inspired, aiming to enable banks to offer the functionality and ease of use for customers similar to that offered by the internet giants. Such functionality offers huge operational cost savings and gives customers the digital services they want.

While Google’s capabilities – such as automatically switching to a new datacentre when things go wrong, and making software upgrades with no downtime or the need for human intervention – are interesting to operations teams at banks, Vault Rare is an example of what banks can do with the technology at the customer-facing side of the business.