IBM and Bank of America Prep Financial Services-Specific Public Cloud

With security, privacy, risk, and control in mind, the duo have teamed up to provide an all-encompassing public cloud utility for the financial sector.

Connectivity

IBM and Bank of America (BofA) have together embarked on a project to bring the first financial services-specific public cloud to market. As collaborators, the pair are focused on addressing some of the industry’s main points of contention around the cloud, particularly threat detection, data privacy, and control over the environment.

The platform will be built on IBM’s public cloud, and once live—no specific launch day is set, but rather, the two intend a gradual roll-out of different components—the bank, and other participating parties will be able to deploy their workloads, from the most mundane to advanced instances such as data science, model development, and deep learning, Curt Leeman, IBM managing director covering Bank of America, tells WatersTechnology. The service covers the entire financial services market, from institutions focused solely on retail banking, to banks and asset managers in the wholesale capital markets. Users can also connect to the Watson suite of services.

[The launch] is not too far in the distant future. We’re moving as fast as we can. I think the first step was: let’s make sure we understand why we’re building this. Let’s have a clear objective, which I know we’ve done. Then let’s define what we’re building.
Curt Leeman, IBM

Banks are an obvious target, but independent software providers (ISVs) and software-as-a-service (SaaS) providers are just as much on IBM’s radar.

“It’s a very difficult environment for them today,” Leeman says. “Even the small ISVs—in a lot of cases, they’re not even getting a shot because they run on their own data centers, and for every one of those you add to the bank, you add risk.”

Leeman says that there have been instances where ISVs and SaaS providers aren’t 100% compliant with the internal requirements of their potential bank customers, and as a result, get rejected or have to put compensating controls or contractual mechanisms in place to work in specific environments. Part of the BofA’s and IBM’s intention is to standardize the management of those controls.

  • READ MOREIn March, WatersTechnology looked at how capital markets firms are using the major public cloud providers and some of the challenges they are facing. In it, Bank of America’s CTO Howard Boville explained why the company decided to build its own cloud environment via a program dubbed Project Greenfield and what some of the results had been to date. Click here to read more

While Bank of America has notably built its own private-cloud environment successfully, this latest endeavor will serve as the next evolution of Bank of America’s cloud journey (and again, this IBM offering is not exclusive to Bank of America). According to the bank, in 2012, which is when their private-cloud project began, it said that by EOY 2019, 80% of its workloads would be run on its own private cloud—that was accomplished last month. As a result, BofA once had 200,000 servers and roughly 60 data centers. Now, it has pared that down to 70,000 servers, and more than halved their data centers down to 23. The bank now spends $2.1 billion less per year on infrastructure costs than it did in 2012, due in large part to the private cloud, according to the bank.

But this latest announcement is not an about-face.

While the bank did not have someone available to talk as this story went to press, executives at the company have noted in the past that at some point in the future the scale and finances of the public cloud will eventually catch up as more users adopt public-cloud services. This latest endeavor is to help the bank prepare for the future.

Just the Beginning

At the start of this project, BofA provided a detailed set of requirements to IBM detailing how they would need the company to secure, control, and monitor a cloud in order to use it, and it pointed out a few things that will be incorporated into IBM’s broader public cloud, though they did not disclose what those requirements were, specifically. Some of them were already in IBM’s roadmap, and some were just good practices, Leeman says.

“We’ve agreed to do those things. So what we’re announcing is building out a specific set of technologies, controls, and monitoring capabilities that fit the industry requirement for one of the leaders in the industry,” he says. But what they realized is that BofA’s requirements could actually serve as a proxy for what the whole industry would need, and so they agreed to help create a utility.

Working intimately on the project is IBM’s acquired business unit, Promontory, who are providing regulatory expertise and insight. A lot of Promontory’s employees are ex-regulators, adds Leeman, and its CEO and founder, Gene Ludwig, is one of the project’s sponsors.

Though BofA is “the committed collaborator,” the platform will be extended to any and every financial institution that wants to submit its workloads and comply with the platform’s policies, which are still in development. Leeman notes that while some of those possibilities and functionalities are already definite, he expects things to change along the way.

“We’re going to find that we get into a particular ISV, and they may have a set of requirements that we haven’t seen before, or an idea, or additional automation,” Leeman says. “But [the launch] is not too far in the distant future. We’re moving as fast as we can. I think the first step was: let’s make sure we understand why we’re building this. Let’s have a clear objective, which I know we’ve done. Then let’s define what we’re building.”

With additional reporting by Anthony Malakian.

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