For banks, “hybrid cloud is the utopian path”
Cloud banking is now about value and strategy, not cost, says IBM’s Howard Boville
Howard Boville is senior vice president of IBM Hybrid Cloud. After eight years leading the digital transformation of Bank of America as chief technology officer, he joined IBM to oversee IBM’s Cloud business.
With the financial services industry now moving aggressively onto the cloud, Boville sat down with Industrious to discuss what he’s learned over a decade of doing it from scratch.
We’re seeing banks, and really most businesses who want to innovate, turning to cloud in a big way. What’s behind that?
There’s been a big pivot. For cloud, it used to be, “Let’s look at your costs, and we’ll do it cheaper.” It’s a cost-centric perspective.
Now we’re moving to a value play oriented around business process. How do we fix a calcified business process that, over time, has atrophied, as every business process does?
You can re-engineer the labor element, but then you’re stressing your developers, because you haven’t addressed the other three elements: applications, data and the digital supply chain. So at IBM, we almost do a digital transformation in reverse, back to front. We do it from the IT back into the business line, with a focus on higher value for our clients.
On the IBM Cloud for Financial Services, we have a set of industry-specific controls that can address the very nuanced regulatory issues that banks have.
These include things like their vendor-risk management and all the controls banks have to show the 75-plus regulators around the world that they’re adhering to. It’s how they handle data and data privacy and the increasing changes around data sovereignty around the world. It’s how they manage cyber controls drawing from the Cloud Security Alliance and all of the bodies that feed into that.
We have that built in. The noble purpose is, as I’d tell the teams I was managing at Bank of America, by building this capability, we reduce systemic risk in the financial system. Without the controls, you’ve got a very brittle supply chain as a bank and the SaaS providers that feed into it. It’s just waiting for an issue to arise.
We saw that with one of the biggest financial data breaches the past few years, where a bank was building its own controls with its own full-stack engineer on a platform that wasn’t friendly to that industry. It resulted in a multi-million-dollar fine and, even more serious, a major breach of customer loyalty and trust.
So for all the benefits, the stakes are pretty high with cloud banking?
There’s really two dimensions: Utopia and dystopia. If an organization takes the wrong approach, it’ll be a Frankenstein’s monster of complexity and pieces and parts stuck together. That monster creates more cyber breaches, more cyber issues, more outages—not because those platforms are inherently insecure, but because they’re too complex and too open to develop against. That’s why you need the controls architecture.
And the costs—why you went to cloud in the first place—will spiral out of control, as customers are precisely locked into these complex single cloud environments, and they can’t easily get out of them.
Which is why you’re such a firm believer in…
It’s about meeting clients where they’re at, in terms of the IT infrastructure choices they’ve made and the various places they do computing. It doesn’t matter whether it’s in a public cloud, or a private cloud, on-premises and even on the edge. Hybrid cloud is what knits everything together. It’s why clients find that hybrid cloud is 2.5-times more valuable than a mono-cloud approach.
Is Hybrid just about IT, then?
To the contrary, it connects everything, not just IT.
Hybrid is where our industry expertise comes in, too. It’s not just banking, we’re working on telco, insurance and others, with control layers that are tailored to each industry. These controls are what will allow you to more fully realize the benefits of cloud.
You can unleash greater agility; diminish unit costs through virtualization; boost developer productivity; and supercharge the ability to get at your data and organize and analyze it in a very secure way—all irrespective of geography. You can only do that if you move forward on the right open and secure architecture with the right industry experience.
We have all those assets already inside our cloud—it’s how we’re taking our customers down the utopian path. Hybrid cloud isn’t a pitstop on the way to the future. It is the future.