A 30,000 foot view of retail banking from Google Cloud


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Zac Maufe, head of global banking solutions for Google Cloud, knows the biggest obstacle preventing US banks from moving to the cloud: inertia. Part of this is because we were the first to move.

“Financial services were the first to adopt them dating back to the ’70s and’ 80s, and at that time they were very innovative, but that left them with a huge technological debt. ”

Today, financial companies are migrating to the cloud.

“We have been waiting for this for some time. “

The pandemic has accelerated the move to the cloud as banks pushed ahead with their digital transformation plans to deliver a much richer user experience, he added. Google sees many banks moving apps to the cloud, preferably using cloud-ready apps.

“Some financial institutions do transfer operations, and while this is probably faster, you don’t get many of the benefits of digital transformation because moving legacy infrastructure to the cloud misses innovation. ”

There are mainframe emulators for the cloud, but they don’t perform as well as software developed for the cloud. Banks should see the move to the cloud as an opportunity to upgrade their technology, he suggested.

Applications tend to be followed by a data phase.

“More and more customers are realizing that processing data and on-site analysis is very difficult. Some financial companies have created Big Data Lakes to bypass product silos. However, without a common taxonomy for data, it can quickly become data swamps. The cloud can be a catalyst to process these massive data sets and gain insight more easily. “

The emergence of AI and machine learning also works well with cloud computing, he said, citing fraud mitigation, chatbots for customer service and automated loan processing – a An area where the cloud offers great value by transforming unstructured data into structured data.

“Finally, a lot of innovation in retail banking happens in the cloud. Most of the new generation fintechs are cloud-centric. If you’re only into the on-premise game, you’re missing out on the forefront.

Speaking between the December AWS outages, Maufe said a multi-cloud strategy is really important.

“We provide tools to make it easy to do. You want to have the interoperability of your applications in order to be able to switch them; we have tools to run so you can run in multiple clouds. Some people call multi-cloud analytics in one space and apps in another, but if you’re thinking about resiliency, that’s not the best way to go.

Asked about the latency created with two or more datacenters running the same data streams, he said latency is an issue, but there are ways to stream and have data replicated.

Maufe has counted four big things he expects to see in banking for 2022.

“Embedded finance will really take off. We have seen it for a long time. The first time I entered carpooling and payment was integrated, that’s when I became Wow, this is the future of financial services. Financial products are catalysts for anything you want to do.

“Second, large-scale self-service. The Covid has really accelerated this. We have all learned to live without physical branches since we have done everything from home, online. Digital natives have really understood this: how to enable their customers to do everything in the app without the need for backend operations support. As things get more sophisticated, we’ll even see complex products like mortgages delivered through self-service channels. I think that will be the new normal.

“The third trend is the democratization of the public cloud. We’ve seen what the cloud has done for the retail industry, giving businesses the ability to grow quickly with almost infinite scale and low initial cost. We’re starting to see how the cloud can also be a building block of banking with other added capabilities like data analytics, machine learning, and AI.

“The final trend – the United States is finally going to catch up with Europe and APAC in the fintech space. We have seen Block, SoFi, Chime and other fintech companies start to gain significant momentum. interesting to see how this will start to change the dynamics of the industry.

He sees more similarities than differences in cloud use across geographies, but differences between industry segments with capital markets and slightly early payments.

As a former chief data officer (and head of corporate strategy, head of digital channels and head of innovation) at Wells Fargo, he believes banks have been slow to use their data to improve business. client experience.

“All of these financial institutions grew up in product silos, so having a horizontal view of the data is a huge advantage. ”

“Big banks have incredibly rich data assets. However, it’s surprising how little data you need to get enough in-depth insights and create a personalized banking experience.

“For example, if you have kids and I don’t our financial needs will be very different, so you have to go one step further, which is why financial services have been a relationship business for so long – advice and guidance has been guided by human interaction Now, with the help of cutting edge technologies like AI and machine learning, I believe banks can deliver the same personalized experiences virtually.

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