The News: This past week at IBM Think 2020, a fully digital event, IBM did a re-launch of its financial services-ready public cloud. This was done in collaboration with Bank of America, which agreed to host key applications and workloads to support the requirements and privacy and safety expectations of its customers, while also addressing the unique compliance requirements of the financial services industry. Read the full announcement blog that was published during Think here.
Analyst Take: Late last year, IBM stirred up a lot of interest in its vertical focused cloud offering for Financial Services that was designed to address the complex needs of banks and other highly regulated businesses in the financial services space. Given the compliance and regulation these businesses face, it has been difficult to pivot to more agile hybrid architectures while maintaining the strict controls necessary. IBM, with the announcement of its Financial Services Public Cloud focused on addressing those challenges and with Bank of America, one of the world’s largest banks working closely with IBM, the company was well positioned to build something in concert with a customer to truly meet these evolving needs.
On-Prem Like Security with a Cloud Control and Orchestration Layer
The premise of the IBM Financial Services Ready Cloud is pretty straight forward so I won’t spend an inordinate amount of time explaining it, but as I mentioned above the challenges are about realizing the benefits of cloud, which include everything from on-demand capacity to flexible consumption and predictable spend to open source development, micro-services and consistent control plane for orchestration. With a strict regulatory and compliance environment, banks haven’t had the confidence to move many workloads to the cloud that could benefit greatly, and that is what IBM is set out to tackle that I believe has a unique need that should be met with sufficient demand.
Expanding With ISV’s
There were a few announcements specific to the IBM Financial Services Ready Cloud at Think 2020. The first was an expanded ISV program. In short, this program is designed to deliver services through partners that meet strict requirements so users of the FSRC can more quickly spin up secure services in areas like Crypto or AI/ML. The expansion of this ecosystem is to be expected and in time should be more significant with so many fintech players currently participating and/or coming to market.
IBM Hyper Protect Crypto Services With Smart Key
One of the key differentiators of the IBM offering is its ability to use proven security technology that is used for its Z and LinuxOne Mainframe solutions. At Think, the company shared expanded capabilities of Hyper Protect Crypto Services and Keep-Your-Own-Key (KYOK) capabilities.
The first is the expansion of Hyper Protect Crypto Services to support Smart Cards that give key administrators greater capacity for their enterprises to secure data in transit. This service also allows for application-level encryption where apps can encrypt and decrypt larger volumes of application data, using KYOK capabilities.
The continued development of unique end-to-end security and encryption services like these are going to continue to be key differentiators for this offering as competitors will certainly be looking to role out similar offerings in coming quarters.
Overall Impressions on The IBM Financial Services Ready Cloud
The financial industry has been uniquely innovative in the development of next generation user experiences, but due to staunch regulation, the cloud has been largely inaccessible for banks. I believe that IBM going vertical with its financial services ready public cloud offering that it will help springboard more banks to meet their ambitions of embracing the agility and flexibility that comes with IT Modernization, especially as it pertains to Hybrid Cloud.
Furthermore, I anticipate this type of vertical approach to cloud will continue to have greater merit, especially in the wake of Covid-19 and the need to rapidly onset secure technologies to address ever-changing needs. I’m eager to see the market response to this offering, but I expect it will be well received.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.