IT Leadership Opinion

Adoption of Cloud Drives Agility in Financial Services; Helps Meet Hyper-personal demands of Customers: Scott Mullins, AWS

For a moment, go a little back in time. Imagine you’re watching a sci-fi fiction where you see consumers accessing their bank account or financial portfolios on a mobile or wearable device. Tap once, and payment done! You watch consumers renewing insurance policies using a voice command and talking to bots to resolve your queries in seconds. Imagine! Well, there isn’t a need to imagine anymore as most of it is already a reality. Both incumbents and new, global, multi-service, low-cost, digital or mobile-only banking and FinTechs are already offering this immersive experience.

The buzzwords like ‘transformation’ and ‘disruption’ are synonymous with financial services industry. This industry has always been at the forefront of deploying cutting-edge technologies for enhancing customer experience. And now there are digital natives who, with their nimble footprint, are launching new services at lightning speed, fully transparent and compliant, using most advanced digital technologies and causing disruption of a different order. This breed didn’t exist half a decade ago. Therefore,  the thrust today is on achieving agility, especially in the incumbent organisations who need to catch up fast with the disruptors. Consumers today have abnormally high expectations from their service providers. This is primarily driven by technology-led life. And they also have ample options to switch to.

Consumers, who intend to interact with things whether it’s for shopping, food delivery, bank transactions or anything else, look for a seamless, immersive experience. That’s putting pressure on the existing business models to change. Gone are the days when you could afford to traditionally engage with customers through a branch network or any such channel. It’s unviable in today’s context. As consumer demands change and pressure from disruptors mount, financial sector companies search for agility that can enable business to change faster.

Based on the data available so far, it’s safe to pinpoint a few trends that will set the course for financial services industry in the near future:

  • FinTechs will drive new business models
  • Blockchains will disrupt big time
  • Digital will be more pervasive
  • Personalisation of services based on intelligence will be the decisive factor in growth and profitability
  • Advances in AI/ML will start a new wave of customisation
  • Cloud will become the most dominant infrastructure option for creating agility and speed
  • Managing cyber and digital risks will be one of the top priorities for financial institutions

That said, the competition is going to be fierce among the digital-natives and incumbents. Financial sector, especially legacy companies, will have to relook at their operating models and attune to the new models. Every company has to look at cloud as the primary option for infrastructure. They have look at automation, AI/ML as primary drivers. Last but not the least, they will have to be very risk-aware and therefore have a robust digital risk management strategy in place. With regulatory environment, which was earlier tough on usage of cloud due to data privacy and security issues, is also easing out slowly.

I met Scott Mullins, Managing Director, Head of Worldwide Financial Services Business Development, AWS at the recently concluded re:Invent 2019, the company’s mega annual event in Las Vegas. We discussed a host of issues ranging from disruptions, to new-age banking, to personalisation of services to use of AI/ML for immersive experience.

Below are the excerpts from my conversation with Scott:  

DynamicCIO: Financial institutions need agility of technology infrastructure to support growth and customer experience. How does AWS help?

 Scott Mullins (SM): To deliver on the expectations of digitally-savvy customers, financial institutions have to massively revamp IT. If you look at a traditional datacenter, it’s no less than a museum – a rare collection of technology acquired over decades. Old systems, and systems built on top of those old systems block the agility that’s required. Nothing else but an on-demand, elastic cloud infrastructure can create room for maneuverance to build brand new applications, and business models. That results in a cost-effective infrastructure and paves the way for efficiency, resiliency and speed to market.

Let’s consider some examples to establish the context.

The product lifecycle at Allianz, a top grade global financial services company headquartered in Munich, has typically been 18 months. The company thought of launching an insurance product for pets. It partnered with AWS. Unbelievable but true, we helped them deliver the product in flat 90-days. It was 6-times faster. The company not only saved on time but also started booking revenue faster.

Some of the digital challenger banks in the UK are other noteworthy examples. Starling Bank has uses technology to transform the way people manage their money. It serve customers in a way that traditional banks cannot even think. Since its formation in 2014, the bank surpassed one million accounts, raised £263 million in backing and was voted best British bank two years running. It runs entirely of AWS.

Another apt example is OakNorth – UK’s most valuable FinTech company with a valuation of over US$2.5 billion. It has written over US$4 billion worth of loans so far without a single default. AWS is at the core of OakNorth’s infra.

Monzo is a digital-only (mobile) bank. Monzo runs its over 400 core banking microservices on AWS, using services including Amazon EC2, Amazon EBS, and Amazon S3.

All of these organisations had one goal: Achieving agility. All of them chose to build their infrastructure on cloud. It is amazing to see the reactions from some of the established players about the ability of the new-age banks. “If they can do it, we can do it too,” they say.

As a result, Goldman Sachs launched their product Marcus this year, which offers a fixed-rate, no fee personal loan. It has already got 300,000 customers. They were able to think of expanding Marcus to UK – from idea to execution – in just 11 months. Goldman Sachs used AWS cloud infrastructure and services.

Leading financial services companies like Capital One and FINRA are able to reap benefits from cloud adoption. They are using AWS solutions including high-performance grid computing, data analytics, digital transformation, security and compliance, disaster recovery, and more to achieve desirable outcomes.

DynamicCIO: Regulatory compliance and security are big factors in adoption of cloud. How does AWS help in it?

SM: Regulatory compliance is a constantly evolving feature in this sector. With the increased thrust on digital banking and digital enablement of customers, the pace of change in compliance has also picked up. The role of compliance is nothing but to ensure that markets operate in a secure and efficient manner. For businesses it is about managing the risk appropriately to safeguard its value and assets. If a change is introduced in systems and business models, regulatory compliance structure also need to change because the same rule book can’t work with new services and technologies. How we, at AWS, help our customers with the evolution of governance frameworks is by holistically looking at technology risk manageability. We have a website called AWS Compliance Center. You can click on a particular country and know all the requirements from a technology standpoint, specifically cloud, and regulatory requirements like data protection. It also gives information on resources and controls that AWS provides, which help the security, governance, risk, compliance and audit professionals.

AWS now offers well over 175 services. Many of those services are focused on security of the infrastructure. We offer a number of services and tools to our customers to look at compliance – both monetary and evidence. For example Amazon Macie lets the customers understand where they may have the sensitive, confidential data exposed. It uses machine learning to automatically discover, classify, and protect sensitive data in AWS. The data could be personally identifiable information (PII) or intellectual property. It provides dashboards and alerts that give visibility into how this data is being accessed or moved.

There’s a service announced recently at the re:Invent called ‘Amazon Detective’ which makes it easy to analyse, investigate, and quickly identify the root cause of potential security issues or suspicious activities. It automatically collects log data from the resources and uses machine learning, statistical analysis, and graph theory to build a linked set of data that enables you to easily conduct faster and more efficient security investigations.

Another interesting solution is AWS Identity and Access Management (IAM) which helps you control access and permissions to your AWS services and resources, such as compute instances and storage buckets.

AWS has made heavy investment in innovating solutions around both preventive and detective controls.

There is an immediate interest from the financial services companies on how manage their surveillance obligations whether it is fraud detection or KYC or anything else and use machine learning to limit the number of false positives so that the security teams don’t spend too much time on analysing every log, and every alert. The next evolution that we are witnessing is that vendors themselves are beginning to produce applications with built-in machine learning capabilities so that the customers don’t have to use machine learning on top of the outputs.


DynamicCIO: Where do you see the momentum shifting from here?

SM: The industry’s growth is solely dependent on two factors:

  • How it personalises the experience for its customers
  • How fast they reach to them with customised solutions

Customers today look for deeper engagements. This requires intuitiveness and insights from data. The future belongs to AI and ML. Artificial intelligence (AI) has that ability to enhance customer experience be it in form of a contact center, personalisation of services, forecasting and product innovation. AWS AI Services help in adding capabilities like image and video analysis, natural language, personalized recommendations, virtual assistants, and forecasting without the need to have deep expertise in machine learning.

For example, AWS offers a service ‘Amazon Personalise’. It is a machine learning service that makes it simple for developers to create personalised recommendations for customers using their applications. This was first used in’s ‘Next Best Offer’ – the retailer’s recommendation engine. We took the same technology and built it into a service. Now the customers can consume it as a service. Emirates uses it in their operations. Even Dominos uses Amazon Personalize to achieve personalization at scale across its entire customer base. It enables to apply context about individual customers and their circumstances, and deliver customized communications such as special deals and offers using the digital channels.

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