Digital Banking is 24×7 Trusted Banking

By Jeff Hong, Global Industry Marketing Lead, IBM Systems

January 24, 2019

With cyberterrorism, Fintech startups, and changing consumer profiles, a bank’s future depends on providing more than just core banking services. A bank needs to anticipate and meet its customers’ expectations that are increasingly personal and influenced by social media. To do so, a bank must make smart technology choices that deliver a satisfying omnichannel experience for clients 24×7 – whether a client is logged in or not. For example, a bank must ensure that the client’s data is always protected. In the event that the client’s data becomes compromised, the bank must alert the client immediately and implement corrective actions. Digital banking is built on trust; a bank must do all it can do to maintain that trust.

Modern infrastructure is critical for digital banking

Even as banks adopt Artificial Intelligence (AI) and customer service bots, they are looking into the future to blockchain and new payment platform technologies. Banks are investing in open infrastructure technologies for greater operating efficiency and customer-centricity. One of the most important technology investments is in datacenter modernization. Many banks begin their digital transformation by implementing a hybrid cloud infrastructure to gain operational agility and to lower fixed costs in their data center.

Banks often start by migrating their mobile applications that support a variety of retail and investment services like basic checking and stock trading. Moving the front-end of mobile applications from an in-house VM environment to a VM environment on a public cloud is a relatively straightforward migration. Less straightforward is moving the back-end and more complex core banking systems. For these, some are being or will be redesigned using containers and micro-services technologies including Docker and Kubernetes. Sensitive applications such as financial risk applications that run on in-house computing grids will likely remain in-house, but are being extended to support bursting to public cloud for additional capacity.

Banks have achieved greater agility and cost savings by adopting a hybrid cloud platform. One Asian bank reaped cost savings of 75% by eliminating hundreds of servers in their datacenters that were used for disaster recovery or reserved for peak analytical workloads. IBM Spectrum Symphony enabled the firm to create a flexible hybrid cloud, using public cloud resources only when needed. The system can anticipate when to burst to Amazon Web Services (AWS) for additional compute capacity in order to avoid delays in time-to-completion of critical risk and pricing analytics. In fact, many firms have more than one public cloud and one private cloud; many have on average five clouds. For these hybrid multi-cloud customers, open technologies and APIs that work on multiple platforms is a critical requirement.

Beyond cloud

A successful digital banking experience relies on petabytes of unstructured and structured data. New digital services for both retail and investment banking depend on the 24×7 availability of high quality data – and lots of it – and on the ability to do more with this data. However, data requirements will vary by use case. As a result, banks can’t rely on a single storage solution for all their needs. Nor can they continue to adopt point-solutions for each use case. Banks need a flexible data management approach that leverages multiple storage formats, media, and environments – with the ability to integrate and manage across data stores. The right hybrid multi-cloud storage solutions will allow the bank to:

  • Modernize on-premises storage
  • Leverage storage on both public and private clouds
  • Support a mix of formats (object, file, and block)
  • Integrate and migrate data stores, to support users and applications
  • Strongly encrypt data when at rest and in motion
  • Support automated, policy-based data access, distribution, backup/archives, et al

Predicting Success

Going digital unfortunately increases a bank’s exposure to cybercriminals. From data breaches to electronic fraud, an average financial organization is 65% more likely to be hacked than a non-financial enterprise. With an average incident cost of $206 per capita cost of a data breach[1] and potential penalties imposed by regulators for the data loss, financial firms are rightly reviewing and updating their data policies and technologies. Software such as IBM Spectrum Protect Plus protects and quickly recovers data in physical, virtual, software-defined or multi-cloud environments including IBM Cloud and AWS. RESTful API support ensures seamless data access. Regulations such as GDPR amplify the need for consistent data policies across a hybrid multi-cloud system.

AI, whether deployed in customer engagement or in risk/fraud management, depends on scale-out deep learning (DL) systems.  A distributed, software-defined infrastructure – compute and storage – allows clients’ choice of machine learning (ML) framework, big data platform, storage, and server.  One North American firm analyzes thousands of securitization applications each day, flagging those with incomplete or potentially fraudulent data using IBM Spectrum Computing, IBM Spectrum Storage software, and open source Apache frameworks on x86 systems.

As the result of their work with 100’s of customers deploying on-premise and hybrid cloud AI solutions, IBM has developed the IBM AI Infrastructure Reference Architecture. By simplifying the complexity of AI initiatives, speeding the time to model accuracy and providing efficient high-performance, enterprise-grade infrastructure, this reference architecture delivers cost-effective, accurate and timely AI value. It combines accelerated servers and storage with software including advanced workload and resource management, essential open source frameworks and data management tools, all accessible through an easy to use interface.

As end-user clients expect more personalized experience with the 24×7 peace-of-mind to match, banks require technology solutions that deliver greater agility, deeper insights, and efficient management of workloads and data on a hybrid multi-cloud environment. The always-on nature of digital banking, coupled with increasing cyber-threats, regulations, and changing consumer tastes mean that infrastructure and the applications running on it must continually adapt and innovate. At IBM, we believe that our leadership in hybrid multi-cloud infrastructure solutions and our investments in open source and reference architectures like the IBM AI Infrastructure Reference Architecture offer differentiating values for our financial services clients by simplifying and enabling their digital transformation, innovation, and agility across all channels.


[1] Cost of a Data Break Study: https://www.ibm.com/security/data-breach

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