While fintech startups have disrupted the banking industry, the COVID-19 crisis will see traditional banks, neobanks, and fintechs converging and collaborating to address the needs of customers.
“Fintechs, while regulated, almost don’t have any baggage to begin with. This is where they kind of flew up front to provide the experience profile, to provide the experience management for the market. But at the same time, they needed to connect back with systems so that the customer that they are serving has an end-to-end experience. And this is where I think the new age digibanks, the new age fintechs, and the heritage banks have a real opportunity to now leverage technology and leverage partnerships,” Aju Murjani, IBM Public Cloud Executive, Sales, IBM Asia Pacific, told Digital Life Asia.
Murjani was one of the speakers at a media briefing to announce the general availability of IBM Cloud for Financial Services, the industry’s first financial services-ready cloud platform.
First revealed in 2019, IBM Cloud for Financial Services was designed in collaboration with Bank of America to meet the stringent security, compliance, and resiliency requirements of the highly regulated financial services industry. According to IBM, the platform is meant to reduce the risk for financial institutions, their partners, and fintechs. It includes support for Red Hat OpenShift and other cloud-native services.
The COVID-19 pandemic has not only accelerated digital transformation, but also demanded consumer-led innovation. As consumer behavior changes, expect even more disruption, as well as convergence as fintech startups continue reshaping the financial services landscape throughout this pandemic and beyond.
“When you look at the IBM framework for financial services, we’re not just looking at the platforms. We are looking at how we embrace the partnerships that banks and financial institutions are familiar with. Also, how do we then bring new practices, new protocols, and obviously compliance and regulatory requirements,” Murjani said.
Banks and cloud adoption
One of the results of the need to fast-track their digital transformation has been a greater willingness by banks to embrace the cloud.
“We’ve actually seen a lot of banks in ASEAN that, until about 18 months ago, the only cloud services that they were really using were for data backup and disaster recovery. The COVID-19 pandemic definitely has accelerated the move to the cloud. This is actually becoming a space where they want to digitally transform, and be more creative and innovative with the ideas that they have,” Ashish Malholtra, Consulting Services Leader for Cloud and Digital Transformation, IBM Security Services APAC, told Digital Life Asia.
“But the fact is that digital transformation, most of it has happened at the cost of security, and digital transformation and security are two very interrelated topics that are reliant on each other as the cyber as well as the traditional ecosystems evolve. We’ve actually seen a lot of clients who have moved to the cloud in a knee-jerk manner just because they actually wanted to avoid operational disruptions to their supply chains, to the changing consumer behavior. But the fact is, now, in hindsight, they want to actually look at security. And that’s where we are actually helping most of our clients, developing an operating model that looks at how security can be managed across the cloud,” Malhotra said.
Are you ready for even more disruption and convergence?