Why Two Banks Are Turning To The Cloud

By Jane Munn, IBM

Financial institutions are facing increased pressure to streamline their processes and trim operating costs, while also addressing consumer preferences, which are rapidly shifting from traditional brick-and-mortar banking to the convenience of mobile banking. Many financial institutions are taking a closer look at how their infrastructure technology can help address these issues, while helping them to retain more customers in today’s competitive financial services market.

Industry analysts at Gartner predict that by 2016, more than 60 percent of banks around the world will process the majority of their transactions in the cloud. This speaks to the many recognized benefits of cloud computing in the financial services industry. Whether it’s a private cloud for storing sensitive customer data, a public cloud for customer engagement applications, or a combination of both via a hybrid solution, today’s flexible cloud environments can be tailored to meet a financial institution’s specific needs while integrating with existing infrastructure.

Additionally, cloud adoption enables financial institutions to cater to today’s mobile-centric customer base, shortening the speed to market for new technology and mobile apps that customers are demanding. While mobile banking technology is highly sought after in developed countries where users are constantly connected via their mobile devices, it also plays a pivotal role in emerging countries where customers often don’t have access to traditional banking and may only have access to the digital world via a mobile device.

Zitouna Bank of Tunisia recognized the merits of the cloud for providing better banking. In a nation where more than 50 percent of the population lacks access to modern, reliable financial services and more than a quarter have no bank accounts, Zitouna Bank turned to the cloud to help transform the bank’s core banking systems, support its expansion goals, and roll out new Internet and mobile services for customers.

A scalable cloud environment composed of IBM servers, storage, software and services provides the increased flexibility, performance and economy the bank requires to support future growth. In fact, the bank plans to open up to 18 new branches per year in order to further establish itself as a leader in the Tunisian banking industry. The new capabilities also are improving the bank’s applications availability and efficiency, for example, by reducing batch processing time for daily transactions by more than 85 percent, from over 13 hours to just 70 minutes.

In Canada, Tangerine Bank, which is a direct banking institution offering traditional services like savings and checking accounts, mutual funds and mortgages without traditional branches, is using cloud as the foundation of its mobile strategy. Originally founded as a bank-by-telephone institution, it quickly moved into online banking with the growth of the Internet in the 1990s.

Today, 25 percent of Tangerine’s customers do their banking via mobile technology, making mobile a central part of the bank’s strategy. To capitalize on that growing opportunity -- and do it quickly -- Tangerine is using IBM cloud capabilities composed of servers and software, including the Bluemix platform as a service offering. This solution has reduced the time required to deploy new mobile applications to Tangerine’s customers from six weeks to just two.

Ultimately, new cloud technology is redefining the relationships Zitouna and Tangerine have with their customers by improving the quality of services they receive and giving them a greater choice of banking channels.