Podcast: Cloud migration ‘a should’ for FIs


Monetary establishments are prioritizing cloud migration as value discount and innovation proceed to be high of thoughts. 

“We positively see cloud migration as a should,”  Rodrigo Silvaregional director for the Americas at Temenos, tells Financial institution Automation Information on this episode of “The Buzz” podcast. 

In line with the tech supplier’s annual economics report, set for launch on April 15, banks are leaning into the cloud as they anticipate the next within the coming years: 

Temenos is a cloud and core banking software program supplier primarily based in Switzerland. It’s mortgage origination answer was chosen by $31.8 billion Commerce Financial institution in February to enhance the client expertise for financial institution shoppers. Different temenos shoppers embrace $521 million Varo Financial institution, $156 billion Areas Financial institution and $142 billion Alex Financial institution. Its economics research, which features a survey of 300 banking executives, is accomplished yearly, in response to the corporate. 

Pay attention as Temenos’ Silva discusses the way forward for the cloud in banking, what shoppers are requesting and find out how to strategy cloud migration. 

The next is a transcript generated by AI know-how that has been calmly edited however nonetheless incorporates errors.

Whitney McDonald 10:16:53
Hi there and welcome to The Buzz, a financial institution automation information podcast. My identify is Winnie McDonald and I’m the editor of financial institution automation Information. Immediately is April 11 2024. Becoming a member of me is Rodrigo Silva. He’s the pinnacle of North America tech supplier terminos. He’s right here to debate cloud migration, together with find out how to choose a vendor find out how to strategy transferring to the cloud, and a few knowledge on what banks are eager about the way forward for banking relating to the cloud. Welcome to the buzzer. I’d be go.

Rodrigo Silva 10:17:18
Sounds good. Whitney, thanks. It’s nice to be right here. My identify is Rodrigo Silva. I’m the Regional Director for 10 minerals for the Americas. I joined Temenos, nearly a yr and a half in the past, and not too long ago bought an prolonged position to guide our area for for the group. My background, I come from the business. I used to be for about 21 years at at Fiserv in a number of totally different roles primarily round gross sales and business with main groups across the globe. My final position there was with the posit options, which is a big group primarily targeted within the US. And as a company, Temenos is immediately the most important supplier of core banking functions all over the world. We function round 3000 shoppers in about 150 nations. We have now a market main know-how platform that caters to totally different segments of the marketplace for totally different industries, giant, small nice establishments. And, and North America is a really strategic, or area for us, the place we’re investing in, in our product, in in know-how in our cloud companies, on assets, we now have numerous current shoppers on this area. And I’m very excited concerning the alternative to be right here speaking to you and be main group on this territory.

Whitney McDonald 10:18:49
Nice. Effectively, thanks once more for being right here. And for sharing a little bit bit about your background. I’m excited right here immediately we’ll be speaking about cloud migration. And naturally, together with your background and within the position that you just’re in immediately. I’m certain that it’ll be an awesome dialog. So with that, why don’t we simply begin right here with the place we stand immediately with cloud migration? What are you listening to from financial institution shoppers? Is there nonetheless this massive push for cloud migration? What are what are you type of following and listening to out of your shoppers? Yeah,

Rodrigo Silva 10:19:18
completely. So so with the there’s extra confidence than by no means proper? The general public clouds has has now a stronger presence in, in all over the place in banking, tons of funding by the hyperscalers. Financial institution see value reductions and innovation being key for for the banking world. These days, adopting cloud is a should. We we see future, the way forward for banking is within the cloud. Our newest economics economist impression research confirmed that about 51% of bankers consider banks is not going to personal any knowledge heart in 5 years, as a result of they are going to be transferring a lot of the functions to the general public cloud. That’s that’s extra so in North America than anyplace else. We noticed out of the respondents that that 36% of banks are prioritizing, transferring their home core banking to the cloud, in comparison with 26. Banks. globally. We additionally noticed that the 79% of North America respondents stated that multi cloud technique might grow to be a regulatory prerequisite within the subsequent 5 years, in comparison with about 60%. In Europe. So we positively see cloud migration as as a should. Our shoppers are, are contacting us shoppers which are immediately on on prem options, working on their very own knowledge facilities are taking a look at transferring to the cloud, both their very own cloud suppliers or transferring to our SAS operation the place we handle the hyperscalers on behalf of our shoppers a

Whitney McDonald 10:21:09
couple of issues to interrupt down there, after all, nice stats, so thanks a lot for placing some numbers to it, however possibly like a break down a little bit bit what these conversations appear like when a shopper approaches Temenos and says, You already know what, I do wish to migrate to the cloud. What’s that the 1st step? After all, it’s it’s costly, and it may be a giant endeavor. So what are these conversations initially appear like?

Rodrigo Silva 10:21:33
It’s all about the advantages, proper that our shoppers will see with the cloud. And at first, what we have to perceive is the banking surroundings as we all know has modified. Proper? We have now demanding prospects which are in search of companies 24/7 Um, we now have the rise of latest rivals, proper, you’re speaking about fintechs, you’re speaking about new banks, you’re speaking about bass suppliers, you’ve gotten regulatory pressures out there, we now have very robust nonetheless very robust market circumstances with rates of interest being excessive. So all of that put pressures on the banks to grow to be extra revolutionary to vary the methods they’re doing issues. Additionally, you’re taking a look at new efficiency metrics and efficiency drivers, proper innovation, buyer centricity, operational efficiencies, threat, compliance, synthetic intelligence, AI, is in all places. So so there’s a whole lot of pressures within the banks to do issues in another way in rethink the best way they’re working immediately. And cloud brings precisely that with Cloud, they’re going to see value efficiencies, they’re going to see and be capable of present enhanced buyer expertise. They’re gonna have scalability benefits, adaptability benefits, you’ve gotten, you’ve gotten a whole lot of automation, inside throughout the cloud world deployment pace, the hyperscalers have invested quite a bit in safety, enterprise agility. So once more, the cloud is the place the banks will be capable of compete and thrive within the digital world. You take a look at the wave of fee suppliers and Neo banks on the market, and so they’re constructed from scratch on the most recent cloud know-how. And within the incumbent, which are utilizing nonetheless these legacy methods that spaghetti methods as we joke, are, are actually not suited to to the calls for of this digital period. So so it’s fairly frankly, a race in opposition to obsolescence. The transfer to cloud will give the banks the agility, they should go to market with new merchandise and, and cater to their shoppers wants, and actually future proof their know-how stack.

Whitney McDonald 10:23:48
Yeah, you simply talked by just a few advantages. After all, the aggressive facet, you talked about that fintechs are constructing on Cloud, they’re probably not having to try this carry. So from from the good thing about speaking by the advantages, and the necessity to keep aggressive, is unquestionably key right here. So possibly we will speak about what these concerns are. There’s clearly the professionals that we simply talked by. Nevertheless it’s not simply as simple as okay, we’re going to maneuver to the cloud now. So how do you actually contemplate value? How do you contemplate what it’s going to ivolve a time dedication? What does that sound like once you’re once you’re discussing that together with your shoppers?

Rodrigo Silva 10:24:24
Yeah, you’re completely proper. Proper. It’s it’s a whole shift to a brand new set of various practices. You’re speaking about automated testing, design, a extra of a buyer centricity mannequin, that the necessity for accelerated manufacturing environments, shorter supply cycles, larger high quality, so So the nice establishments, the banks, they must be ready for it, guarantee that they’ve the proper assets in place to tackle the world of cloud, in addition they must guarantee that they’re working with with distributors with companions, they’ve a broad and deep set of cloud native banking capabilities. Identical identical requires that we simply talked about for the banks you’ve gotten internally with their very own assets, you must anticipate that out of your distributors and out of your companions, proper. So having having confirmed cloud supply confirmed is scalability, confirmed migration credentials expertise doing so. So after I look internally at 10, home windows, proper, we now have expertise of working with 700 SAS shoppers immediately, they’ve already migrated or began in our SAS surroundings. So huge scalability, proper, we’re a company that has been doing this for for a few years now. We have now each on premise shoppers and SAS shoppers, and in a whole lot of our on prem shoppers is X have really applied the our functions on their very own cloud suppliers, proper, that being AWS, or your or, or what have you ever, as a result of we’re an utility that day. That’s that’s cloud agnostic. So once more, deep expertise, understanding of the regulatory surroundings, understanding of the safety surroundings, ensuring that you just’re compliant, and having a few years in our case, 30 years working with with financial institution IP is essential for, for our shoppers to to achieve success. And they need to be contemplating all of that after they’re making their transfer to the cloud.

Whitney McDonald 10:26:28
Plenty of the conversations that we now have is about that vetting course of and ensuring that the distributors that you just do choose have those self same, whether or not it’s safety and even simply values and type of what you’re attempting to perform all line up. So yeah, that positively resonates. I do know that you just additionally simply talked about tendonosis cloud agnostic So possibly we will speak a little bit bit extra about the place terminos suits in. So when you have a shopper that as mu is transferring towards the cloud, what does that appear like for terminos? How do you guys assist alongside that journey? Yeah,

Rodrigo Silva 10:27:01
completely. So we’ve been on that journey for for a few years, and evolving our cloud. Providing for a few years, we have been one of many pioneers to maneuver core banking and our shoppers to the cloud. And what’s what’s attention-grabbing and essential about 10 minnows is that we weren’t solely speaking a couple of retail utility or company utility, we’re, we’re one single platform that works in all all over the world for various various kinds of shoppers, these being small for establishments, giant completed tuitions, credit score unions, neobanks, Challenger banks. And we not solely, not solely we work with a number of forms of establishments, however we additionally work with totally different segments of the market. So one single platform that caters to retail, small enterprise, company personal wealth, we now have an finish to finish channel answer that does each the digital piece on-line banking, but in addition originations onboarding, we now have options for fraud monitoring AML. So funds hubs. So we, in all these options are cloud native, and in in cloud agnostic, that means that we may also help our shoppers in that journey into the cloud, not solely with their core, but in addition with these additionally supporting options that revolve across the core. And the composability of our functions is essential, as a result of when a shopper is testing the waters with the cloud, they might not be prepared to maneuver the complete platform directly. So with the best way the structure works, you’ll be able to transfer bits and items as as you you are feeling snug with. So possibly you’ve gotten a method, you’re going to begin with the posits solely as MVP one and sooner or later begin transferring then your lending and your credit score merchandise into the cloud. So you’ll be able to determine what makes most sense. So you’ll be able to you’ll be able to check you’ll be able to really feel snug, you’ll be able to see every little thing that’s working. After which you can begin transferring in response to your your wants and your your threat urge for food. So on the finish of the day, you’ve gotten a accomplice in 10 Home windows that lets you transfer not solely your core banking at your pace and your want, but in addition transfer all the opposite platforms that help the core and encompass the core into right into a core surroundings.

Whitney McDonald 10:29:30
Which makes it much less daunting, proper? You don’t need to do it all of sudden you’ll be able to type of do it piece by piece and see the way it works after which decide okay, what’s the subsequent piece that we should always transfer over? You don’t need to do it multi functional fell swoop.

Rodrigo Silva 10:29:45
That’s completely appropriate. So you’ll be able to take your time. And relying on your corporation technique and your threat urge for food, and the way snug you’re with the transfer, you’ll be able to determine which items to maneuver first. And once more, that’s these are the kind of conversations that we like to have with shoppers. I’m very lucky that in my position, I’ve an opportunity to talk with many banking executives and speak to them and with them about, you understand, what are their urge for food to maneuver to cloud? And we confirmed some stats earlier on it, everybody’s speaking about it. And the query is, how shortly can we transfer? And what ought to we transfer first? And who’re we going to be working with and we’re glad to see that there’s a whole lot of belief in what we now have been in a position to present the market. And, and we’re seeing a whole lot of curiosity in, on this transfer.

Whitney McDonald 10:30:32
So we’ve been seeing or following alongside this cloud migration journey. For fairly a while. We talked by some advantages, we’ve seen the carry and shift. However what do you assume is subsequent inside this cloud banking mannequin? How is that this cloud migration evolution altering? What are you waiting for? What’s subsequent in your perspective?

Rodrigo Silva 10:30:56
Yeah, so what we’re seeing is the market is altering. And so is the best way the banks devour know-how, proper? They’re transferring to SAS, we finish with a SaaS providing, you’re principally allocating all these high quality, the obligations round managing the infrastructure, managing the safety, the the monitoring the daily operations, the shut of enterprise, the updates the upgrades, placing that within the fingers of a of a vendor, proper, a company like like dominoes on a cloud surroundings. So we’re seeing them transfer increasingly more that could be very, it’s a mannequin that has been in place, particularly in North America for a few years. However we’re seeing that increasingly more all over the world as nicely. That took a little bit longer to adapt and to undertake that knowledge. Name it the the SAS mannequin or simply placing With all that duty within the fingers of a vendor, now, what we’re seeing as the subsequent wave is, is actually is Cloud Analytics, proper the quantity of name it what the banks can do with all the info that may be accessible within the cloud, as a result of cloud lets you permits the scalability to essentially transfer great quantity of information in and in with the pace and scalability that you have to, to have the ability to handle that. And with with Cloud Analytics, banks will be capable of to have actual time perception into buyer behaviors, market developments. And that’s tremendous essential as they’re launching their new merchandise and their subsequent greatest provide and the way they’re managing different elements of their enterprise equivalent to threat profiling, Fraud Administration, so on and so forth. So So with a extremely scalable, says mannequin, along with a strong localization and native operations, proper, the banks can really feel snug on transferring into into the cloud surroundings and, and once more, with a vendor that has been doing that for some time.

Whitney McDonald 10:33:04
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Transcribed by https://otter.ai