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Digital transformation: Why financial institutions are moving to the cloud to accelerate innovation

The pandemic has pressed fast-forward on cloud migration plans. The challenge ahead is not whether to do it, but how to make transitions seamless and fully realize benefits including scale and agility

Back in April 2020, Microsoft CEO Satya Nadella said that his company had seen two years of digital transformation in two months.

Albert Welgraven, Financial Services Industry Director at Western Europe at Microsoft, said: “The cloud is changing everything. And the current crisis has accelerated this change (and continues to do so).”

These remarks are a good summary of the challenges and opportunities for financial services. 

Cloud technology will enable your organization to bridge the data silos and strengthen your innovation power. It will create a ‘digital feedback loop’ to empower your employees, improve customer engagement, optimize your processes and transform your products.

As enterprises come to grips with the new normal in the wake of COVID-19, the pandemic’s impact on how and where IT infrastructure is deployed remains an open question. 

While the cloud can bring cost savings, its larger benefit to an organization lies in its ability to propel digital transformation by enabling faster time to market for new products and capabilities.

“We have entered into a multi-year transformation led by technology supporting the twin engines of cost and optimization and growth and transformation. Cloud is and will be playing a huge role in creating scale, resilience and adaptability,” explained Hemakiran Gupta, Business Unit Head, Banking and Insurance, TCS Europe, during a roundtable event organised by Tata Consultancy Services (TCS) and Microsoft.

The roundtable explored the process and challenges of cloud transformation and featured insights from ABN AMRO and Rabobank.


Speeding up the process with DevOps at ABN AMRO

For Karel Bosse, Director IT Transformation at Dutch Bank ABN AMRO, a key focus of its digital transformation strategy is deciding what cloud platforms to bring their applications to.

“Focusing on one provider helps to focus the future learning of the workforce, as well as our investments. Implementing DevOps capabilities on one platform is better than four or five,” Bosse explained.

While the organisation is still at an early stage in the move to cloud, in line with agile ways of working, ABN with help from external partners such as TCS, worked to help its teams offload some of their work and speed up the cloud migration process by adopting a factory model. 

“We are organising migration runs at a higher velocity as well, together with TCS and other partners. By adopting a factory model so that teams do not have to do everything themselves and can offload work to the factory or maybe get another opportunity to get resources and folks in our teams to actually speed up migrations,” Bosse said.

While still in the early stages of the migration process due to a lack of readiness, Bosse and his team refined the business transformation process further by breaking it down into smaller sub-sections to help cultivate an agile work environment that resulted in 150 applications running in the cloud.








Harvesting the benefits of migration to cloud at Rabobank

For Rabobank, scalability, agility and improved continuity are key motivations behind the migration to cloud.

“Security by design, faster time to market, speeding up innovation and making use of the innovation power of cloud, and leveraging that with the DevOps teams that are working with it, are important factors for us,” Siebren van der Kooij, Cloud Transformation Manager at Rabobank explained.

With a goal of 80% of applications transported to the cloud by 2023, Siebren also stressed that the migration alone will not bring these benefits. Implementing effective ways of working in the cloud and redesigning the applications and services, are both essential in order to harvest the benefits. 

Integral planning to manage the transformation

Managing the transformation of thousands of applications is no easy task. While approaching this challenge, Siebren and his team realised that while the cloud strategy was in place, an overview of every application that was moving, where it was moving to and what the status of that movement was had been missed.

As a result, the team composed integral planning of the 1,500 applications and monitored progress to have an overview of what would arrive to the cloud in the next quarter. Similarly, the benefits of the transformation are also tracked.

“From a data point of view, the transformation landscape has to be clear. What services must be adopted on the short-term to facilitate the transformation, which services are left out and do they have to be redesigned?” Siebren added.

As a result of this planning, the Rabobank team now have an overview of all of the IT services they currently have on-premises and in cloud, which will inform the way they are transforming in the years to come.

Compliance and audits to address the risk of breaches and data loss

Demonstrating effective business controls and managing compliance is becoming increasingly important to many industries and organisations in the digital, fast-paced world we live in.

For the audience attending the event, a key unresolved issue in businesses’ cloud approach was security and compliance.

Cloud technology is becoming a core part of many industries today and with this comes potential risk; the aim of compliance programs is to address these risks. With stories of breaches and data loss constantly making headlines, it is no surprise that compliance programs are being examined for their value.

One way of mitigating these risks is gaining visibility assets, much like what Siebren achieved with his team at Rabobank. However, as the industry grows and changes, the effectiveness of compliance programs will be impacted. Thankfully, the large Cloud Service Providers (CSPs), now offer hundreds of unique services to address business and security concerns and these have all had a major impact on almost every industry.

Unlocking rapid growth and global collaboration

As these examples from Rabobank and ABN Amro have shown, the process to cloud migration is a long and challenging journey. With so many options available, it is easy to lose track of the goal of technology — to serve the business by providing insight, improving efficiency, increasing productivity, and targeting new markets.

The cloud is driving entirely new business models to enable rapid growth and global collaboration while maintaining quality and compliance standards. The journey to the cloud is a necessity to survive and thrive in today’s hyper-competitive business landscape.