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DBS Bank in Singapore is using Amazon Web Services (AWS) cloud technology to support its push towards a more “fintech-like” culture and faster delivery of new applications.
An agreement between DBS and AWS was signed after an extensive period of evaluation by DBS, as well as a proof of concept experimentation to explore how AWS can complement the bank’s existing datacentres. The bank said it had ensured that the implementation meets the requirements of the Monetary Authority of Singapore’s (MAS) technology risk management guidelines.
One of the first use cases for AWS is in DBS’s trading business for pricing and valuing financial instruments for risk management, which requires extensive computing power.
AWS gives DBS the flexibility to rapidly scale the capacity of its computing grid up or down. In the past it would have had to have permanent overcapacity just in case. In the trading case, AWS will give the bank a quick and cost-effective way to handle short-term surges in trading volumes such as those recently caused by uncertainties following the UK referendum on leaving the EU, known as Brexit.
The bank plans to shift up to 50% of its compute workload to the cloud by 2018.
David Gledhill, head of technology and operations, at DBS, said that companies such as Amazon, Facebook, Google and Netflix are widely acknowledged as leaders in innovation.
“What sets them apart is their ability to constantly experiment, automatically scale and rapidly bring new features to market. They are able to do this in part by leveraging the flexibility provided by cloud technology,” said Gledhill.
Read more about banking IT in Southeast Asia
- Singapore’s DBS bank is piloting Microsoft’s Office 365 with 1,000 employees, making it the first Singapore bank to do so.
- The legacy IT system of Thailand’s TMB Bank was restricting its responsiveness to the demands of customers and staff, so it set a course for the cloud to sharpen its focus on banking in the digital age.
- Asean banks are using technology to serve locations that are remote or have low population densities, with the latest example being a bank on a boat from Bank Rakyat Indonesia (BRI).
DBS recently announced that it was piloting Microsoft’s cloud-based Office 365 with 1,000 members of staff.
Gavin Tay, research director at Gartner, said the adoption of a public or hybrid cloud environment in the banking and financial services sector will now accelerate.
“Banking and financial services institutions are notoriously slow to adopt emerging technologies and innovative business trends. This is especially so given the inherent conservative Asian trait on top of the stringent regulations as outlined by MAS. This makes DBS foray into public cloud use significant,” said Tay.
He added that there have been no similar announcements by financial institutions in Southeast Asia. However, some banks outside of Singapore have begun their journey on hybrid cloud. Much of this adoption is in the early stages, with a focus on non-core banking processes.
Prediction borne out
Five years ago Gartner had predicted that by the end of 2016 more than half of Global 1000 companies would be storing customer-sensitive data in the public cloud.
“2016 has not ended and this prediction is already right on track,” said Tay. “As soon as the regulators clearly define the parameters within which the banks can work, adoption will only become more rapid.”
While organisations may typically be concerned about customer data residing in the public cloud, “most banks are likely to exploit a public cloud environment for computing power serving analytical functions or especially that of application development, where the goal is to supplement their own datacentres in a hybrid fashion,” said Tay.
He added that CIOs of some banks have said that, when augmented with added security points in a hybrid cloud, such public clouds “are more secure than their own datacentres”.