Innovative technologies like cloud computing, 5G, edge computing, artificial intelligence and machine learning have precipitated an immediate need for digital transformation across every industry. In the banking industry, for instance, banks are beginning to accept that they must adopt some of these technologies in order to continue to offer financial services that will meet future banking demands.
To pull off quality integration of modern technologies into the banking system, banks are taking the initiative to partner with IT firms that will provide the needed infrastructure to propel their digital transformation goals.
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Deutsche Bank announced recently that it would extend its partnership with Kyndryl, a U.S IT infrastructure service provider, in a quest to deliver its digital transformation goals. Under this new agreement, Kyndryl will continue to manage Deutsche Bank’s continental European core banking and mission-critical IT infrastructure needs. In addition, it will support the bank’s cloud migration and on-demand scalability to enhance the bank’s global service availability.
The new Deutsche Bank-Kyndryl agreement in details
One notable aspect of this new contract is that Kyndryl will support the bank’s cloud migration strategy as part of its broader effort to adopt public cloud services. Deutsche Bank hopes that this new move with Kyndryl will also support its drive to harness the power of cloud computing by providing the flexibility to tap into a broad set of technologies and skills, including its global strategic partnership with Google Cloud.
The contract puts Kyndryl in a position to facilitate Deutsche Bank’s ongoing digital transformation in its banking infrastructure by integrating automation and security technologies. These new technology transformations would become part of the bank’s modernization strategy and drive efficiency in day-to-day banking operations.
Kyndryl, under this new agreement, will support the bank’s data centers with hybrid networking solutions, thereby facilitating the integration of better workflows and tooling. With this renewed IT support, Deutsche Bank will be looking to improve data integration across its on-premises IT environment as it readies to make a longer-term commitment to cloud computing. Having 20 years of knowledge of Deutsche Bank’s systems, the partnership will play a part in providing Kyndryl with the framework to help migrate some of the bank’s critical business operations to the cloud.
Gordon Mackechnie, chief technology officer at Deutsche Bank, gave his opinion on why the bank renewed the agreement with Kyndryl.
“Our decision to renew our almost 20-year working relationship with the experts from Kyndryl is based on their experience in operating mission-critical infrastructure services for the financial industry, as well as Kyndryl’s continued ability to adapt to the changing needs of the banking and IT industry.”
More financial institutions tiptoe toward cloud adoption
New business models made possible by cloud technology and competition from digital bank startups are common factors pushing mainstream banks to move their resources to the cloud. Moreover, traditional banks are coming to terms with the fact that the cloud offers several business benefits for banking, such as agility, increased flexibility, lower cost of IT and quicker access to innovation.
Findings from IDC’s Worldwide Industry CloudPath Survey reveal that banks’ spending on cloud computing services is projected to grow more than $77 billion, with a CAGR of 16% yearly from 2021- 2024. Also, McKinsey reports that Fortune 500 financial institutions could generate up to $60 billion to $80 billion in 2030 by adopting cloud computing technologies.
With these developments in the cloud computing ecosystem, more banks are accelerating their transition from on-premise to cloud. Consequently, in recent years, more banks have announced their transition to the cloud in a move to cement their place in the global financial market. For example, in 2021, JPMorgan Chase announced it was replacing its U.S. retail technology platform with a cloud-native core banking system to meet its banking reform goals. In a similar development, Arvest Bank recently announced a five-year partnership with Google Cloud and Thought Machine to accelerate its digital transformation strategies. Wells Fargo announced in September 2021 that it had laid the foundations to move all of its workloads to multiple public clouds within the next decade. The bank also announced that it would partner with Microsoft Azure and Google Cloud Platforms to make this move work.
With these big announcements in the banking industry, we might be witnessing more banks speeding up their cloud migrations in the coming years.