Podcast: Cloud migration ‘a should’ for FIs

Whitney McDonald 10:16:53
Hiya 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 methods to choose a vendor methods to method shifting to the cloud, and a few knowledge on what banks are desirous about the way forward for banking in terms of 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 obtained an prolonged position to steer our area for for the group. My background, I come from the trade. 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 position there was with the posit options, which is a big group primarily targeted within the US. And as a company, Temenos is right this moment the biggest supplier of core banking purposes world wide. We function round 3000 shoppers in about 150 nations. We’ve got a market main know-how platform that caters to completely different segments of the marketplace for completely different industries, giant, small wonderful 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, now we 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. Nicely, thanks once more for being right here. And for sharing just a little bit about your background. I’m excited right here right this moment we’ll be speaking about cloud migration. And naturally, along with your background and within the position that you just’re in right this moment. I’m certain that it’ll be a fantastic dialog. So with that, why don’t we simply begin right here with the place we stand right this moment 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 form 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 price 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 examine confirmed that about 51% of bankers consider banks won’t personal any knowledge middle in 5 years, as a result of they are going to be shifting a lot of the purposes to the general public cloud. That’s that’s extra so in North America than wherever 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 develop 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 can be right this moment on on prem options, working on their very own knowledge facilities are taking a look at 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, after all, nice stats, so thanks a lot for placing some numbers to it, however possibly like a break down just a little bit what these conversations appear like when a shopper approaches Temenos and says, You realize what, I do wish to migrate to the cloud. What’s that the first step? After all, 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 at the beginning, what we have to perceive is the banking setting as we all know has modified. Proper? We’ve got demanding clients which can be searching for companies 24/7 Um, now we 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 got regulatory pressures available in the market, now we have very robust nonetheless very robust market situations with rates of interest being excessive. So all of that put pressures on the banks to develop into extra progressive 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 way in which they’re working right this moment. And cloud brings precisely that with Cloud, they’re going to see price efficiencies, they’re going to see and be capable to present enhanced buyer expertise. They’re gonna have scalability benefits, adaptability benefits, you’ve got, you’ve got a whole lot of automation, inside throughout the cloud world deployment velocity, the hyperscalers have invested loads 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, and so they’re constructed from scratch on the most recent cloud know-how. And within the incumbent, which can be 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 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 via a number of advantages. After all, the aggressive facet, you talked about that fintechs are constructing on Cloud, they’re probably not having to do this carry. So from from the good thing about speaking via 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 via. Nevertheless it’s not simply as simple as okay, we’re going to maneuver to the cloud now. So how do you actually contemplate price? How do you contemplate what it’s going to ivolve a time dedication? What does that sound like if you’re if you’re discussing that along with your shoppers?

Rodrigo Silva 10:24:24
Yeah, you’re completely proper. Proper. It’s it’s an entire 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, greater high quality, so So the wonderful establishments, the banks, they must be ready for it, guarantee that they’ve the appropriate assets in place to tackle the world of cloud, additionally 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 similar requires that we simply talked about for the banks you’ve got internally with their very own assets, 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, now we have expertise of working with 700 SAS shoppers right this moment, they’ve already migrated or began in our SAS setting. So huge scalability, proper, we’re a company that has been doing this for for a few years now. We’ve got each on premise shoppers and SAS shoppers, and in a whole lot of our on prem shoppers is X have really carried out the our purposes 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 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 once they’re making their transfer to the cloud.

Whitney McDonald 10:26:28
Lots of the conversations that now we 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 form of what you’re attempting to perform all line up. So yeah, that undoubtedly resonates. I do know that you just additionally simply talked about tendonosis cloud agnostic So possibly we will speak just a little bit extra about the place terminos suits in. So you probably have a shopper 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 fascinating and vital 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 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 varieties 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, now we have an finish to finish channel resolution that does each the digital piece on-line banking, but in addition originations onboarding, now we 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 will 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 purposes is essential, as a result of when a shopper is testing the waters with the cloud, they is probably not prepared to maneuver the whole platform without delay. So with the way in which the structure works, you’ll be able to transfer bits and items as as you you are feeling snug with. So possibly you’ve got a technique, you’re going to start out 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 resolve 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 part 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’ve got a companion in 10 Home windows that means that you can 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 you’ll be able to form of do it piece by piece and see the way it works after which decide okay, what’s the subsequent piece that we must always transfer over? You don’t need to do it multi functional fell swoop.

Rodrigo Silva 10:29:45
That’s completely right. So you’ll be able to take your time. And relying on your enterprise technique and your threat urge for food, and the way snug you might be with the transfer, you’ll be able to resolve 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 already know, 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 a whole lot of belief in what now we have been capable of 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 via 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 way in which the banks devour know-how, proper? They’re shifting to SAS, we finish with a SaaS providing, you might be mainly allocating all these high quality, the duties round managing the infrastructure, managing the safety, the the monitoring the everyday operations, the shut of enterprise, the updates the upgrades, placing that within the arms of a of a vendor, proper, a company like like dominoes on a cloud setting. So we’re seeing them transfer an increasing number of 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 an increasing number of world wide as nicely. That took just a little longer to adapt and to undertake that knowledge. Name it the the SAS mannequin or simply placing With all that duty within the arms of a vendor, now, what we’re seeing as the subsequent wave is, is de facto is Cloud Analytics, proper the quantity of name it what the banks can do with all the information that may be obtainable within the cloud, as a result of cloud means that you can permits the scalability to essentially transfer super quantity of knowledge in and in with the velocity and scalability that you’ll want 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 vital as they’re launching their new merchandise and their subsequent finest provide and the way they’re managing different elements of their enterprise comparable 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 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