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Data centres


560 million


The number of mobile transactions handled by ING bank, having doubled in 2020 compared with the previous year.


ING


replacing a large part of its core banking systems with data hosted on Google servers. The move is a major win for Google, as European banks have largely favoured Microsoft and AWS for cloud services. DNB, one of the largest and oldest banks in the Nordic region, for instance, is working closely with AWS. The move is part of its effort to reinvent itself as a technology company that also happens to operate in the financial services sector. Using AWS cloud capability, the Norwegian bank is able to frequently update its mobile banking app and has quickly rebuilt its customer-facing applications. ING has a reputation for digitalisation and innovation that goes back to its direct online banking service, ING Direct, which was first launched in the mid-90s. This saw it become one of the first banks to offer online savings accounts. Therefore, it comes as no surprise that it, too, has embraced cloud services.


“Our cloud developments helped bring the speed of software deployment to our IT infrastructure. However, most of our primary systems for financial transactions are in our own data centres or our own private cloud.”


“In many ways, we are more like a fintech company than a bank,” Donovan observes. “At least 20% of our staff are IT engineers, so technology is a prime driver of our business and its agility. That drives the need for software-defined infrastructure technology, as we are driving innovation and the mobile agenda for all of our customers.”


The cloud is helping ING to keep pace with change in customer behaviour, develop new services and enhance the level of personalisation. It is, however, only part of Donovan’s IT infrastructure plan. “Infrastructure was often the biggest bottleneck in deploying IT,” he explains. “Our cloud developments helped bring the speed of software deployment to our IT infrastructure. However, most of our primary systems for financial transactions are in our own data centres or our own private cloud.”


87% ING 18


In 2020, the majority of ING’s customer interactions were through the mobile channel.


What to keep and what to share ING Private Cloud (IPC) is a key part of the bank’s cloud technology strategy. It provides a digital platform to store and process data and IT services, including mobile phone apps. It enables the bank to deliver a consistent experience that is both secure and reliable. The IPC helps the bank build trust in ING’s own data capability, while public cloud services enable it to keep up with the changing demands of customers. “One would not trust private wealth moving to the public cloud without significant safeguards in


place,” believes Donovan. “This is not like your music collection. Some of our competitors have published that they are moving fully into the public cloud, but at ING, more of our core systems are being migrated to IPC. In the last two years, we have started to use the public cloud for global scalability, mostly in software-as-a-service (SaaS), office automation and collaboration, as well as some fintech opportunities.”


The need for a robust private cloud solution is driven mainly by two concerns. If the first is data security, the second is the fragmented regulatory landscape in which the public cloud exists. “We operate in a highly regulated market, with different views across the world and trust is a core value, especially since the financial crisis, when the industry realised that trust is hard-earned and easily lost,” Donovan explains. “So, we have been prudent, learning on IPC over the past five-to-six years internally first, which was invaluable before our journey to the public cloud started.” The bank is nevertheless heavily involved in shaping the development of the public cloud space, having joined forces with other institutions to establish the European Cloud User Coalition (ECUC). Its aim is to strengthen the European financial industry’s public cloud ecosystem by promoting common security standards and best practices across the EU. “We make a clear distinction between our on-premises data centres with our IPC private cloud and the public cloud, with guard rails in place between them,” Donovan says. “We operate in 44 countries, with primary retail customers in 17 of those, and the different regulators across the world – even within the EU – sometimes have different views. That is a key challenge to using the public cloud.” The ECUC is in its very early days but will serve as the voice of a coalition of banks before the regulators. It may well create an environment in which public cloud infrastructure becomes more appealing – but, for now, ING is among those institutions proving that public and private cloud adoption works well alongside the operation of its own data centres. “The public cloud will play a larger role in the future, but we operate a hybrid model to get the best of both worlds,” explains Donovan. “We recognised eight years ago that the future would be mobile-first, and the pandemic has accelerated digitalisation. We understand that the way to grow value for our customers in financial transactions is to be more flexible, simple and agile. We have been investing in cloud technology to achieve that agility, but also to protect our customer data while the views of regulators change and evolve.”


In a rapidly evolving market, the best option may well be a hybrid solution in which a bank’s own data centres continue to play a central role. ●


Future Banking / www.nsbanking.com


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