IBM worked with Bank of America to create a financial services-focused public cloud, built for financial services companies and their suppliers, IBM announced Wednesday. Bank of America will use the platform to "host key applications and workloads."
Focused on "regulatory compliance, security and resiliency," the public cloud platform will allow financial services providers to work with suppliers that have met the technology platform's requirements, according to the announcement. With IBM's controls in place, independent software vendors (ISVs) and software as a service providers can focus on "core offerings."
The platform will allow Bank of America to put resiliency, data security and customer privacy at the "forefront of decision making," Cathy Bessant, chief operations and technology officer at Bank of America, said in the announcement. "By setting a standard that addresses the concern of hosting highly-confidential information, we aim to drive the public cloud to a safety level that is unmatched."
A tough regulatory environment and data security are top of mind as financial services organizations try to modernize technology stacks and offer leading edge services.
The effort is complicated when high profile breaches raise the ire of regulators; It's impossible for the financial services industry to ignore the pressure regulators are placing on Amazon Web Services following the Capital One data breach.
More providers are turning to industry-specific solutions to cater to vertical needs. Google Cloud and Microsoft Azure offer retail-specific offerings, a shot at AWS and its largest retail customer Amazon.com.
Landing Bank of America is a big win for IBM, a premier customer it can highlight as it pitches other financial services firms to adopt the platform.
IBM is considered one of the niche public cloud providers and in 2018 held 1.8% of the market share, trailing AWS, Azure, Alibaba and Google Cloud.
Where Big Blue shines is in its strong brand and existing customer relationships, according to Gartner analysis from this year's IaaS Magic Quadrant. Creating financial services-focused offering will help IBM work on one of Gartner's caution areas, which is a smaller partner ecosystem.
IBM has an opportunity with what it calls "the world's first financial services-ready public cloud." It builds on relationships the company already has with 47 of the Fortune 50 companies, along with 10 of the "largest financial institutions in the world," according to the announcement.
IBM has "extensive partnerships" with financial institutions globally, from West Bank to Santander Bank, said Hillery Hunter, CTO of IBM Cloud, in an interview with CIO Dive.
Those existing relationships and industry focus will help boost adoption. It creates a platform to vet the security and compliance of FinTech offerings new to market, bringing vendors under the compliance umbrella.
The regulatory concerns of the financial services industry extend to "not only a bank, but also their responsibility for their third-party providers," said Hunter. "One of the first things to tackle is data confidentiality, control over data, and enabling a banking institution to be able to evidence that they have fully secured the data context of their cloud deployments."
Bank of America has worked to consolidate its infrastructure footprint as part of an internal cloud strategy. But CEO Brian Moynihan said third-party cloud providers are 25-30% cheaper, in an October earnings call. At the time, the CEO said it was negotiating with potential providers.
Work with Bank of America on the public cloud platform began 18 months ago and it affirmed the platform's data security and resiliency in terms of privacy is safe for its 66 million customers, according to Hunter.
The bank is "committing to use this public cloud environment for even sensitive data," she said.