Grafico Azioni Bank of America (NYSE:BAC)
2 Mesi : Da Ott 2019 a Dic 2019
By Angus Loten
Bank of America Corp. and International Business Machines Corp. have teamed up to develop a public-cloud computing service for banks, which have been reluctant to store customers' financial data outside their in-house systems.
The tool, unveiled Wednesday, features measures designed to meet the banking sector's regulatory and compliance requirements, IBM and Bank of America officials said. They include automated security tools and top-level encryption -- a process of preventing unauthorized access by converting data into code.
"Even people at IBM with deep access to the cloud will not have access to the key" to unlock a bank's encrypted data, said Arvind Krishna, IBM's senior vice president for the cloud.
The two companies have been working on the project for more than a year.
With a public cloud, businesses rent computer capacity from third-party providers including IBM, Microsoft Corp., Amazon.com Inc. and others. Unlike a company's own private cloud, a public cloud is shared by other businesses. Mr. Krishna says he hopes the move catches the attention of other banks in the months ahead.
An important benefit of public-cloud computing is cutting the cost of running on-premise data centers and servers, Mr. Krishna said. A public cloud also offers more storage and the flexibility to access a wider range of applications and emerging technologies, such as blockchain and artificial intelligence.
He said AI could enable banks to speed up lending decisions, such as mortgage applications, by quickly parsing a range of applicants' financial data.
Most banks have been hesitant to shift payments and other back-end systems to public-cloud services, in part due to concerns over security and data privacy.
That is giving less-regulated financial-technology upstarts an edge over banks in online payments, digital lending and investing, and other fast-growing markets.
Venmo, a digital money-transfer service operated by PayPal Holdings Inc., reported more than 40 million active users for the first three months of 2019. Over the same period, Bank of America reported 37 million active digital users, while Wells Fargo & Co. counted 29.8 million. Among large U.S. banks, only JPMorgan Chase & Co. surpassed Venmo, reporting 51 million digital users for the first quarter.
Bank of America said the move to a public cloud is part of a plan launched in 2012 aimed at paring down the use of its own data centers and servers.
As of October, the bank is running 80% of its IT workloads in its private cloud, cutting the number of on-premise servers to 70,000 from 200,000 seven years ago. It operates 23 data centers, down from 60 in 2012. The bank said it now spends $2.1 billion less per year on infrastructure than it did in 2012. It now plans to gradually shift many of these workloads into the public cloud.
Cathy Bessant, the bank's chief operations and technology officer, said the move to IBM's public-cloud service is "one of the most important collaborations in the financial services industry cloud space," according to a statement.
Write to Angus Loten at firstname.lastname@example.org
(END) Dow Jones Newswires
November 06, 2019 00:15 ET (05:15 GMT)
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