Banks better be in the cloud now or be on their way there because it is best for business. It might also mean the difference between doing great business for many more years to come and being out of business in 5, 10, or maybe 15 years.
That is how big of a difference maker the cloud is according to Duncan Eadie, Cloud, Infrastructure and Engineering Lead for Asia-Pacific, the Middle East and Africa, at Accenture. Eadie, who is also a Managing Director at Accenture, shared in an exclusive interview with Data & Storage ASEAN that mainframe migration to the cloud is crucial both to digital transformation and in driving the business forward.
This transformation ushers in modernisation that opens up avenues to address common banking issues using innovative ways of increasing flexibility to address customer demands, reducing their time to market, innovating new ways to attract customers, creating new experiences and adopting responsible practices.
Banks Have Taken Notice . . . And Are Mostly Taking Action
Accenture found in its research, “The Great Cloud Mainframe Migration: What Banks Need to Know,” that 82% of 150 banking executives are planning to move over half of their mainframe workloads to the cloud. Moreover, 22% say they plan to move the majority of their mainframe workloads to the cloud, with more planning to do the same in the next three to five years.
The minority that is yet to join the cloud revolution is to be expected, as 100% adoption of any technology is never guaranteed. But, to be fair, banks refusing to migrate their mainframe to the cloud, or at least parts of it, have their reasons, and Eadie believes that complexity is the biggest issue holding these banks back.
“Complexity is the number 1 challenge, and safely unravelling complexity can be costly,” Eadie noted. “Accenture research estimates that about 80% of all players in the banking and payment sector are more than 15 years old. Over that time, any large enterprise will have accumulated a lot of legacy technology and customised it to the nth degree. This complexity, this legacy and these customisations really hinder their ability to move their operations to the cloud.”
Dealing with this complexity is daunting in itself. Exacerbating matters is the potential for considerable business disruption, as well as the many operational changes necessary to maximise the benefits of cloud migration, particularly reskilling and the entire change management process.
These challenges, Eadie pointed out, are not only barriers to cloud migration but also obstacles to business competitiveness. He explained: “Accenture’s view is that the market is now at a tipping point, where the business agility benefits and long-term cost-savings of the cloud now greatly outweigh the perceived risk and cost of change.”
With Challenges Come Opportunities
Eadie, though, was careful not to dismiss these barriers and, in fact, acknowledged them as legitimate concerns. But he was quick to emphasise that letting these challenges get in the way of change sets banks aback rather than set them up for the future.
He also pointed out that executives and CISOs in the banking industry are now more comfortable with the idea of migrating to the cloud because the use-cases are now easily identifiable. The challenge then is overcoming these barriers. That, according to Eadie, will happen on a case-by-case basis since there is no one-size-fits-all cloud migration strategy that works for every enterprise. The business value an organisation can derive from migrating to the cloud is case-to-case as well, with Eadie noting that “not every enterprise will derive the same value from the cloud.”
But there is undeniable business value to be had in migrating mainframes to the cloud, and the fact that key decision-makers are buying in bodes well for the industry. That buy-in “is an essential first step,” Eadie pointed out, and banking executives who wish to maximise the benefits of being in the cloud will need to strategise accordingly.
“You need to be very data-driven and business case driven in terms of selecting your different technology roadmaps and then planning for those,” Eadie explained. “The cloud migration strategy cannot be developed in isolation; it needs to take into consideration the bank’s most critical business objectives whilst budgeting short-term budgets with medium- and long-term rewards. So, strategy and planning, together with experienced people, is the way to overcome the barriers.”
Eadie also advised banks in Asia Pacific to look at their counterparts in Europe. These banks, according to Eadie, are “cloud leaders,” having migrated successfully and getting maximum value from it. The Accenture executive believes that banks in the region have “a good opportunity to learn lessons from Europe” and to follow in their footsteps. This is especially true if the former can involve all the pertinent stakeholders right from the very start “to ensure that all aspects of business operations are considered and addressed.”
Key Concerns, Cloud Solutions
Data sovereignty and regulatory compliance are two key issues in banking, and the cloud has solutions for both. Regulators in the region, in fact, are “becoming more amenable to cloud solutions” noted Eadie, and this growing approval is a referendum that the cloud works.
“The major cloud providers are continually opening facilities in new countries and regions, thus enabling data sovereignty. It is also widely understood that the cloud is typically more secure than a proprietary data centre,” Eadie explained. “As a consequence…, the proliferation of cloud technologies has now introduced specific sovereign cloud offerings. This is an approach that allows organisations to control the location, the access to and the processing of their data in a cloud environment in response to new, emerging industry standards and compliance requirements.”
These solutions are all the more reasons for banks to migrate to the cloud, and regulators in the region are recognising their positive impact on the industry. This recognition, in turn, can enable banks to more easily take advantage of the cloud benefits available to them.
Accelerating to the Cloud With Accenture
Indeed, the benefits of migrating to the cloud far outweigh the challenges and costs that come with it. These challenges are daunting but can be overcome nonetheless—especially with a trusted and reliable cloud partner, like Accenture. A professional services company with leading capabilities in digital, cloud and security, Accenture offers what Eadie describes as “a lot of cloud industry practice,” including in the banking industry.
“With the future of banking being in the cloud, we [Accenture] obviously want to help our banking clients to build capabilities to innovate at speed and scale and to achieve the growth the market leaders have demonstrated and also to deliver efficiencies through our unique cloud offering,” said Eadie.
He added, “Accenture offers the full spectrum of services to help banks in their journey to the cloud. We unlock the true benefits of the cloud by using the right strategy, the right people and the right tools to migrate and also to operate and secure the cloud. So, it’s a real end-to-end value chain specifically focused on four key areas: Enterprise applications, data and analytics, core applications and the surrounding architecture, like call centres and online banking.”
These industry-specific solutions by Accenture help banks migrate to the cloud and yield the many benefits of being there—with much greater speed and certainty. And with the cloud emerging as “the most value-creating technology” today in the eyes of Eadie, banks better be in the cloud now or are planning to do so. In the case of the latter, Accenture is ready to help ensure a seamless cloud journey.
