Podcast: Cloud migration ‘a should’ for FIs

Whitney McDonald 10:16:53
Howdy 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. At the moment 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 how one can choose a vendor how one can method shifting to the cloud, and a few information on what banks are serious about the way forward for banking with regards 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 12 months and a half in the past, and lately acquired an prolonged function 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 completely different roles primarily round gross sales and industrial with main groups across the globe. My final function there was with the posit options, which is a big group primarily targeted within the US. And as a corporation, Temenos is at this time the biggest supplier of core banking functions world wide. We function round 3000 shoppers in about 150 nations. We now have a market main know-how platform that caters to completely different segments of the marketplace for completely different industries, giant, small high-quality 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 providers, on sources, we have now a lot of current shoppers on this area. And I’m very excited in regards to 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 somewhat bit about your background. I’m excited right here at this time we’ll be speaking about cloud migration. And naturally, along with your background and within the function that you simply’re in at this time. I’m positive that it’ll be an awesome dialog. So with that, why don’t we simply begin right here with the place we stand at this time with cloud migration? What are you listening to from financial institution shoppers? Is there nonetheless this huge 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 in every single 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 affect research confirmed that about 51% of bankers consider banks won’t personal any information middle in 5 years, as a result of they are going to be shifting 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, shifting their home core banking to the cloud, in comparison with 26. Banks. globally. We additionally noticed that the 79% of North America respondents mentioned that multi cloud technique might change into a regulatory prerequisite within the subsequent 5 years, in comparison with about 60%. In Europe. So we undoubtedly see cloud migration as as a should. Our shoppers are, are contacting us shoppers which are at this time on on prem options, working on their very own information facilities are shifting to the cloud, both their very own cloud suppliers or shifting 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, in fact, nice stats, so thanks a lot for placing some numbers to it, however possibly like a break down somewhat bit what these conversations appear like when a consumer approaches Temenos and says, You realize what, I do wish to migrate to the cloud. What’s that the 1st step? In fact, it’s it’s costly, and it may be a giant enterprise. 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 before everything, what we have to perceive is the banking setting as we all know has modified. Proper? We now have demanding prospects which are on the lookout for providers 24/7 Um, we have now the rise of latest opponents, proper, you’re speaking about fintechs, you’re speaking about new banks, you’re speaking about bass suppliers, you may have regulatory pressures available in the market, we have now very robust nonetheless very robust market circumstances with rates of interest being excessive. So all of that put pressures on the banks to change into extra modern to alter the methods they’re doing issues. Additionally, you’re new efficiency metrics and efficiency drivers, proper innovation, buyer centricity, operational efficiencies, threat, compliance, synthetic intelligence, AI, is everywhere. So so there’s plenty of pressures within the banks to do issues in a different way in rethink the best way they’re working at this time. And cloud brings precisely that with Cloud, they’re going to see value efficiencies, they’re going to see and be capable to present enhanced buyer expertise. They’re gonna have scalability benefits, adaptability benefits, you may have, you may have plenty of automation, inside inside the cloud world deployment velocity, the hyperscalers have invested lots in safety, enterprise agility. So once more, the cloud is the place the banks will be capable to compete and thrive within the digital world. You take a look at the wave of cost suppliers and Neo banks on the market, they usually’re constructed from scratch on the newest cloud know-how. And within the incumbent, which are utilizing nonetheless these legacy programs that spaghetti programs 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 towards 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 via just a few advantages. In fact, the aggressive aspect, you talked about that fintechs are constructing on Cloud, they’re probably not having to try this carry. So from from the advantage of speaking via the advantages, and the necessity to keep aggressive, is certainly key right here. So possibly we will discuss what these concerns are. There’s clearly the professionals that we simply talked via. But it surely’s not simply as simple as okay, we’re going to maneuver to the cloud now. So how do you actually think about value? How do you think about what it’s going to ivolve a time dedication? What does that sound like while you’re while you’re discussing that along 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 high-quality establishments, the banks, they must be ready for it, be sure that they’ve the suitable sources in place to tackle the world of cloud, in addition they must be sure 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 may have internally with their very own sources, you need to count on 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 once I look internally at 10, home windows, proper, we have now expertise of working with 700 SAS shoppers at this time, they’ve already migrated or began in our SAS setting. So huge scalability, proper, we’re a corporation that has been doing this for for a few years now. We now have each on premise shoppers and SAS shoppers, and in plenty of our on prem shoppers is X have truly 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 software that day. That’s that’s cloud agnostic. So once more, deep expertise, understanding of the regulatory setting, understanding of the safety setting, ensuring that you simply’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 once they’re making their transfer to the cloud.

Whitney McDonald 10:26:28
A number of the conversations that we have now is about that vetting course of and ensuring that the distributors that you simply 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 undoubtedly resonates. I do know that you simply additionally simply talked about tendonosis cloud agnostic So possibly we will speak somewhat bit extra about the place terminos matches in. So in case you have a consumer that as mu is shifting 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 had been one of many pioneers to maneuver core banking and our shoppers to the cloud. And what’s what’s attention-grabbing and necessary about 10 minnows is that we weren’t solely speaking a couple of retail software or company software, we’re, we’re one single platform that works in all world wide for various several types 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 completely different segments of the market. So one single platform that caters to retail, small enterprise, company personal wealth, we have now an finish to finish channel answer that does each the digital piece on-line banking, but in addition originations onboarding, we have now options for fraud monitoring AML. So funds hubs. So we, in all these options are cloud native, and in in cloud agnostic, which means that we may 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 consumer is testing the waters with the cloud, they might not be keen to maneuver all the platform without delay. So with the best way the structure works, you’ll be able to transfer bits and items as as you you’re feeling snug with. So possibly you may have a method, you’re going to begin with the posits solely as MVP one and sooner or later begin shifting 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 take a look at 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 shifting in accordance with your your wants and your your threat urge for food. So on the finish of the day, you may have a companion in 10 Home windows that permits you to transfer not solely your core banking at your velocity and your need, but in addition transfer all the opposite platforms that assist the core and encompass the core into right into a core setting.

Whitney McDonald 10:29:30
Which makes it much less daunting, proper? You don’t need to do it unexpectedly 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 following 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 online business 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 function, I’ve an opportunity to talk with many banking executives and speak to them and with them about, , 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 rapidly 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 plenty of belief in what we have now been in a position to present the market. And, and we’re seeing plenty 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 via some advantages, we’ve seen the carry and shift. However what do you suppose is subsequent inside this cloud banking mannequin? How is that this cloud migration evolution altering? What are you anticipating? 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 shifting 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 arms of a of a vendor, proper, a corporation like like dominoes on a cloud setting. So we’re seeing them transfer increasingly that may 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 world wide as effectively. That took somewhat longer to adapt and to undertake that information. Name it the the SAS mannequin or simply placing With all that accountability within the arms of a vendor, now, what we’re seeing as the following wave is, is basically is Cloud Analytics, proper the quantity of name it what the banks can do with all the information that may be out there within the cloud, as a result of cloud permits you to permits the scalability to actually transfer super quantity of knowledge in and in with the velocity and scalability that it’s good to, to have the ability to handle that. And with with Cloud Analytics, banks will be capable to to have actual time perception into buyer behaviors, market developments. And that’s tremendous necessary as they’re launching their new merchandise and their subsequent finest provide and the way they’re managing different elements of their enterprise similar to threat profiling, Fraud Administration, so on and so forth. So So with a extremely scalable, says mannequin, along with a sturdy localization and native operations, proper, the banks can really feel snug on shifting into into the cloud setting 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