Recent megadeals in Omdia’s IT Services Contracts Analytics (ITSCA) database highlight the importance of cloud computing for digital transformation in global banking.
Banks shift to the cloud at scale
Traditionally, banks and financial institutions relied on legacy systems and had close control of their IT processes. Most have developed digitalization programs in order to keep up with new-age competition. Now the biggest banks are migrating their core processes and operations to the cloud. In July, Deutsche Bank selected Google Cloud to deliver cloud services, and now, HSBC has selected Amazon Web Services (AWS) to drive its wholesale technology transformation.
HSBC reinvents itself with move to AWS cloud
HSBC selected AWS as a long-term strategic cloud provider to deliver new and personalized banking services. As part of the agreement, HSBC will make AWS technology available across the bank’s lines of business, starting with customer-facing applications and application modernization in its Global Wealth & Personal Banking business. HSBC will use AWS’s portfolio of cloud services, including compute, containers, storage, database, analytics, machine learning, and security to develop new digital products. Based on information from industry sources, we estimate this to be a 10-year, $1.25 billion deal.
In 2019, HSBC announced plans to invest $17 billion in technology over a period of three years. The bank also said that it wants to re-engineer its processes by investing in technology to improve customer experience, and also reduce costs. According to industry reports, HSBC follows a multi-cloud strategy using Google Cloud and Microsoft Azure alongside AWS.
New trends in banking
Cloud solutions offer many benefits, including scalability and security. Cloud computing offers the advantage of scalability in combination with other benefits such as security, transparency, and cost reduction. Using cloud technology, banks like HSBC can improve their time-to-market for new product launches. Implementing cloud computing will enable banks to scale up or down on demand. This provides a far better way to enhance customer satisfaction and improve overall customer experience.
IT Services Contracts Analytics
Anushree Agarwal, Analyst, IT Tools & Insights
David Molony, Principal Analyst, Enterprise