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hello I'm David Penn research analyst with innovate welcome to accelerating the speed to platform ready for banks and 2020 banks will spend about 2.3 billion on core modernization just to satisfy customers and try keeping syntax at bay we'll be discussing with the future of cloud first and platform as a surface strategy look like four firms trying to meet transformation goals without breaking the bank our panels for today are Patty Ramanathan founder and managing director of a valley innovation center Nisha gusoff principal partner Solutions Architect for Amazon Web Services and Tom dem check global banking technologist for DXE technology patty to start us off he wanted to touch on operating models for neo banks and a recent study that I Valley conducted on the banking industry thank you David good morning everyone or good afternoon depending on where you are it's it's great to be with my fellow panelists here Misha from AWS and from DXE so as David mentioned we were studying what what is going to be the differentiator in financial services going forward especially for small to mid-sized institutions and we kind of took a step back there's obviously a lot going on there's thin tags or technology like artificial intelligence machine learning and blockchain so how do you kind of make sense of it what does our bank you to do kind of going forward to stay competitive and a competitive landscape changing to is not just pure banks or syntax they're Internet firms like Google or Amazon the e-commerce side of Amazon and in Apple kind of getting into financial services so so kind of step back and look into history right what was differentiate the trend of what was the competitive differentiation of Granta bank back in the seventies and eighties largely distribution right the more branches you had the more footprint you had and cut fast forward to 90s and Accord back King so you saw a lot of investments going into those systems of automation systems record as you know like to call legacy today the advent of the internet kind of late mid-90s if you will a lot of online so so you saw a lot of investments in online banking kind of transformed into more digital as things progress then there was the data and the intelligence component the bank is putting a lot of data about their customers how do you kind of use that it serves the customers better so to what we like to call systems of intelligence which is basically big data on artificial intelligence and things like that but there was a lot of investment and battles if you think about it over the last 20 or so years and then the FinTech movement started right like we looked at when did Center actually start to pay power which can be attributed as a first in tech and there's a little thing on the top of that slide there to kind of show kind of progression of FinTech PayPal was founded around 2000 I think 1998 or 2000 and but but the large syntek movement kind of started after the end of the recession period the financial crisis period around 2008 and being continuing right we have 40 plus unicorn there has been more than 150 billion dollars in venture capital front of venture capital investments so bank obviously around 2010 and Seoul realized syntex are integral part that are transforming the journey that a treasury building friction from how financial services were working so there was we saw a lot of partnerships with syntax and then blocked industries ledger came kind of from left field with Bitcoin and stuff but the whole permission letters and how assets could get into any kind of visual form so to speak in the discrete ledger so that can have profound implications is between in how financial services operates in capital markets and securitisation how and everything we're probably seeing only the tip of the iceberg in that but that that was also kind of transformational and disruptive in many ways and then then we had the open banking Europe had PSD to banks were kind of enabling this outside in access and opening themselves up so what do we see going forward into 2020 and beyond we can see a convergence of all these forces and what we like to call kind of this neo Bank platforms and what our new line platform so they're platforms that enable you all that we talk about like the digital customer journey of the FinTech type customer journey or FinTech integrations the ability to launch or or create and develop and launch of in tektite capability at the same time and and car as how you will do how the pin techs do so enabling the bank to compete with in tax so that it's end-to-end so what what open banking and others saw was kind of more of a patch on top of existing models and what we kind of look at your bank's is kind of built from ground up it's purposeful and he has an example he talked about that a little later as well but goldman sachs launched as you know consumer finance platform markets kind of purposeful has been silken ground up they were not in the consumer finance business Solaris bank this is a bank for folks who don't know about them out of Germany and any of my fellow panelists today are going also celerity digital banking from DSP and with AWS is also a new Bank platform that helps financial institution especially small to mid-size institutions kind of gets parity and that going to build your own markets if you will ah so a logical question is how is this Howard your bank platforms different from the open banking model so if you look at the two to two diagrams on the left and the right the open banking was or the layer on top of existing systems and it still did open open up to two developers in syntax and the very interesting developments on it but what a neo Bank fundamentally is is kind of purposeful it's end-to-end excitable and enables kind of develop into these new digital and FinTech applications of seamlessly and some of the key characteristics on the right right it's open more than technology so we support for artificial intelligence machine learning it's built in in the cloud and that gives you the flexibility and it kind of integrates with digital assets or blocking this through the ledger intrinsically it has broad product support or from deposits to lending to payments even wealth management and and it has a digital identity and digital onboarding support there's a lot of things that are happening today is everything is digital and and so so it's not just on the processing one of the things the open banking capabilities did not change is kind of the value or openness in the middle or middle office and the back office so the old Bank platform kind of look at it end to end so there's not only innovation and lift in the front office and how the experience happens but there is automation and fishing season value both in the middle office and the back office so that's that's how kind of you're ranked platform defers from what we saw indeed open banking era so we're seeing it happen we mentioned briefly about Marcus so if you look at that will quote from the Goldman Sachs video they recently launched a thing last year Apple card which was an integration now try to kind of contextualize back to to your own environment in a traditional bank environment if they had to build something like an apple card working with Apple or somebody else how much of an endeavor that is for Goldman they could conceptualize it build that in record time and overall the markets our form has has done really well they raised about 55 billion and deaths deposits over three years they've been an interesting and and then done five billion in loans and this is hot of the press on the right we saw the big acquisition announcement by these are ad for what what is plaid plaid is just a platform to access bank data not one bank data but across bank data consent driven but that that's what it is and these are paying a huge premium to to get into that business that essentially serves the same tank and and as I mentioned blockchain right we're just seeing the tip of the iceberg the latter saying that was one of the examples are encoded earlier they're looking at as doing custom services for digital assets so as a bank who's looking at either court transformation digital transformation initiatives migrating to a new bank is not like a one step process or a big bang process it's an evolution so what are some of the Criterion's that you look at when when looking to migrate into a new bank operating bottle soles or platform characteristics so customer centricity writes of things that already have the digital experiences of in tech marketplaces or FinTech partnerships that built in it does not only address the chief digital officer and CIO team but also the CMO means of bringing in new customers integrated with CRM it has diversified product support across deposits lending payments and wealth built on a modern tech stack plows a IML watching an open architecture support one of the things that markets and Iblees have the advantage of and it is backed by a robust infrastructure that's highly available scalable and and huge of time so we'll hear more about these from my fellow panelists so at this time I'd like to hand it over to Misha from AWS thank you very much mishit yes make sure if you word your from AWS if you'd go ahead and and pick it up from there we know that Amazon has been a critical partner in helping banks innovate in the cloud maybe you could talk to it a little bit about that yes indeed thank you so much as Michigan mi moi it's a pleasure to be here and speak on behalf of the AWS and yes it has been a very strong partner with many financial institutions in the banks and we continue to see a very strong growth in that space and the critical play in that space as well let me start by saying that the cloud adoption in financial services is if it's still accelerating explaining at very high pace in my presentation I'll touch on some of the key trends we see in the industry then I'll touch on some specific trends within bacon and payments and followed by some of the work we do in a degree as to enable our partners and financial services and banking partners in particular so the banking industry is continue to must have much high expectations and demand more choices the new forms of risks are constantly emerging banks collective unprecedent amount of data and looking for ways to harvest insights from that data and of course regulatory complexity is growing and well creates additional dimension in this regulatory complexity and regulatory world at the same time multiple forces are converging to drive cloud adoption in the industry and I'll just touch on a few of the forces which are relevant to today's discussion first of all data arising data volumes in a you know demand more cost-effective ways to process the data and around analytic workloads against the data to enable a IML workloads in cloud is really well positioned to address that particular need regulations regulatory oversight is ever-expanding and reporting obligation becomes more onerous and more more demanding in more time-sensitive and of course security and reliability many customers recognize that cloud provided by superior security in the variability compared to more traditional model tuition data centers so with that I would also want to point out that the syntax of play an increasingly important role and disrupting the industry and many of the syntax are running on a DVD so were born in AWS but I think the important point here and I'll quote the McKinsey & Company to which essentially reflects the kind of look they're finding is that the banks are on being disrupted by FinTech but they are being disrupted by custom expectations so it's a customer the consumers are driving the trend and cindex just responding to the needs and providing our service that the customers are expecting so what trends do we see in the industries move to the cloud and here I'll talk about the six trends we what we observing but first the the what's happening is that the RS financial institutions become more comfortable operating in a cloud and comfortable with their understanding what it what it takes to meet regulatory compliance requirements as that vertical out they then also become more open to experimenting with new ideas and leveraging the cloud to transform the existing businesses and bring innovative solutions to the market so we see six strands ranging from widespread to gaining traction of course customer experience and digital channels and cause channel integration is is a evidence everywhere we all are users and customers of far these new services which kind of pop up everywhere green computing and high-performance computing is another massive major trend which allows customers to run compute heavy workloads in the cloud at the fraction of the cost using scalable capacity using on-demand pricing models data lakes and data analytic as I mentioned is a big driver and what happens here is that banks and financial services companies often have a lot of obviously have a lot of data too much data about this every aspect of consumer consumer life but it's very difficult for them to bring this data together and harvested in a meaningful way using our current infrastructure so data Lakes properly designed really provide the opportunity which was not possible before to to harvest the insights from the data and then we are seeing migration of the core systems in transformation of the core systems and being in moving those core systems to the cloud which is a in a way the game-changer right because now is a core systems move the cart becomes the the center of the operations machine learning and AI are no longer buzzwords this is the reality we see a lot of workloads pretty much it's probably trend of the of the BLSA but it's still a young kind of it's a really developing area there's lots going on here so it's still a gain interaction at the world just seen the beginning of that blockchain in distributed ledger technologies also in the gaining traction category with some examples of that but it's still much of the workloads in R&D and experimentation kind of phase so let's talk about innovation in banking and payments in more specific terms again customer expectations are driving the shift and the customer expectations are pushing banks to build open ap is in fact one based on one of the recent surveys we we find that about 67 percent of financial customers say they would share more data with banks in return for new benefits so open banking is an opportunity to create a better customer experience because open thinking really started as a regulatory essential requirement but many banks are embracing this because it does create opportunity better customer experience which manifests itself in in multiple ways first of all laws for banks to create technology ecosystems and many do it allows them to integrate context into the banking value chain in many different ways and there are a lot of different business models which emerge as a result of this of this trend there are now use cases for aggregation of customer data in transaction data at scale and in real time or near to real time and the new distributed channels become possible for - for banks to essentially sell their parts and services to vnu this new channels of course cost device delivery of you know of information across portals and devices is now commonplace and that's what the open API is allows to to do easily and lastly high level of personalization and targeted messaging is now possible the way it was never possible before so this is just an example of a few banks which are running workloads on AWS and there are many many others some of them we cannot share but many and just there's no time to talk about but I think banks I think the point here the banks are realizing that the cloud environment allows them to experiment and develop new business product developer kind of new testing the basic ideas be the products much in Marshville rapid fashion and allows them to access advanced technology the fingerprints anywhere on the planet within minutes if they wish to so this is just an example of a challenge a bank Starling Bank has been very successful they build their entire operation on AWS in a mobile only bank which has be n they successful em the one of the bays which adapted the open API framework build their own marketplace and has a ecosystem of FinTech partners and this is not an example of more establish being the actual two major bank national Australia being using AWS to to run their data analytics in the cloud so data hub is hundred percent cloud native data Lake which they built which contains you know PII data personal environment formation and and it's a it's a game changer for them because it allows them to derive the insights from the data which was not never possible before so now just spend a minute to talk about how AWS helps emphasize customers to to innovate and what would provide in that space well first of all I'm I'm a representative of Amazon AWS part in network and we worked with many many partners spouses or partners in our ecosystem but broadly speaking we have technology partners the organization which build their own products and ideas as well as system integrators and consultants which allows you to help other organizations move to the cloud and be successful in that journey nor the GC is one of the distinguished partition in this category and just moving forward the one of the common concerns we hear from our customers is how to deal with the regulations and especially because different jurisdictions and new regulations which affected the way you can know cannot operate in the cloud depending on certain local law etc so we work with regulators very closely and we largely pursue two goals in our in our engage with regulators first we ain't work with a we help regulate understand the technical landscape understand the public law and let scape how can understand how to how to properly audit their the cloud-based operations and essentially have a dialogue facilitate dialogue between regulators and in the industry so regulations are properly understood and properly addressed but on the same time we also work with the partners and the customers and help them understand how this regulator is what they meant to achieve and advise them on any changes and provide guides on what regulations means for them at different jurisdictions based on based on information available to us so we also have a degree of marketplace it's essentially a portal where third party or third parties can sell their software services and we have a specific dimension this portal specific to financial services it's a very useful resource for customers advantage services page because it allows you to find hundreds and thousands of solutions really quickly based on different categories or depending on the business need and lastly I would like to just mention about the new service we launched in November called Amazon beta exchange it is a marketplace for data so it is really a marketplace where data providers big and small can make that data available to data subscribers in a way that's easy to procure transparent pricing standardized ap is and standardized finance and all-day logistical kind of oversaw or we have managed by a DBS and make it really really easy for customers to use data and is getting a lot of attention in the industry and particularly the financial service industry as well so with this I will pass my presentation to Thompson Thank You Misha as you've heard from Misha and Paddy a lot of banks are going through digital transformation and dxc which some of you might not know who we are the combined company of Computer Science Corporation HP Enterprise Services when the largest integrators in the world we work with a lot of the bank's around the world with their digital capabilities in addition we have core banking platforms ourselves and a lot of these banks are in various stages of digital transformation in particular we're working with about 18 banks globally to help them with their various transformations and we're also seeing a lot of down tier midsize and smaller tier banks also looking at evolving into the digital arena especially from a competitive positioning standpoint well and working with the banks we've see that banks have put their particular priorities in three major buckets first is what are the industry drivers second is the business priorities they're focused on and third are what are the technical priorities from an industry driver perspective some of the key components is of course you know what is the growth of the digital technologies and how does it help enable the bank to grow the bit core your respect to businesses and you know also as you heard from Patty and so except for Misha there's a continuous disruption from fintechs and non-banks and to stay competitive how do you mitigate that disruption and move to digital platforms so you can increase value to your customer base from a business priority standpoint some of the key focused areas is evolving the infrastructure that is used to really position it from a digital perspective so that can be readily integrated with a lot of the fintechs that Misha was talking about there's a lot of focus on growth we're seeing a less focus these days on cost optimization only but how do you course optimize your environment and also grow your environment and then of course the key underlying factor is increasing customer satisfaction and then from a technical priority standpoint this a couple key areas you know the cloud services we're seeing more and more working with the customers that we have moving to the cloud and mobility and omni-channel are very critical especially as we get into the millennium population and where you know they all grew up with this type of technology so when we look at what banks are really focused on based upon these priorities they're starting to shift away from focusing on technology and running the infrastructure and more around what what it takes to run the bank and what are the strategies that need to be implemented to grow the bank and how do we make sure that the underlying technology accommodates those strategies and and in doing so how do you realize economies of scale and go to a cop X type of model and one of the key items is to focus on customers in fact I was at a recent industry event with AWS we were hosting a dinner for about 30 plus top executives from various banks in New York City and we went around the room and asked them you know what are your key drivers and not one of them actually mentioned about you know focusing on customers and really to stay competitive that's really what the area needs to be is what is the customers looking at so that you can maintain the existing customers you have and grow your customer base so when you look at some of the digital challenges that you want that banks are looking to evolve to and they look at their current infrastructure the traditional banking systems have some major major challenges over time a lot of these banks have done a lot of customization around their infrastructure so it's a very tangled system not necessarily cost-effective a lot of legacy applications that potentially don't allow for integration to improve customer experience and also don't allow for FinTech integration and we're also finding that if there's not the flexibility and quick time-to-market that banks need today to compete with Neo banks and other evolving competitors such as Google and so forth so when you look at the digital transformation there's five factors that we see that banks are looking at if how they can potentially transform their environment what you see on this chart of the five we've won is do nothing and in fact some banks are actually doing up and they're perfectly happy with what they have in place and where they're positioned in the market place a rip and replace Ripper replaced though is a very risky situation putting in a new core and migrating it immediately third is stand up a parallel core focused on all digital fourth is surround the core with fit for purpose type of activities so you open up the core with some api's and you add some fin text and meet your specific business drivers and third is surgically change the core in regards to looking at how do you evolve it so it's a lot more flexible and what we're working on with a lot of our clients today is it's kind of a combination of three and five in fact we've just supported a small bank in Oklahoma that's now running in the cloud and first stood up a digital capability and over the next couple years they're moving their current infrastructure to the new digital platform and they're doing it by different asset classes and different product segments of their customer base and when you look at the digital transformation there's two aspects of it what do you what does it mean to enable a digital Bank and then what does it mean to enable a core and the key thing of course we've covered those a certain extent in some of the drivers is reduce your time the market reduce the course of change allow digital enablement have an open architecture that see you really accommodate and plug in new capabilities integration capabilities are very critical and then last but not least and probably the most important is create a really compelling customer proposition and it's all about the customers and then from the core site which kind of maps into the digital enablement you know you need to retain the resilience in and uptime especially with the regulatory challenges and requirements that are put on the banking community and in doing so need to lower the technology run course and route and remove core constraints so when you look at the in kind of following through on what patty went on you know the timeline here a lot of cores going back we're very monolithic and a lot of banks today still have model at the course it's evolving now or towards an API enabled externalization of functions the course still runs on some of these monolithic platforms and their streamlined streamlining of ledger keeping course with adjacent capabilities and really the end state is to have a cloud ready thin ledger core composed of different capabilities so you enable it as a service pace layered architecture cloud web scale have Micro Services and api's and the streamline with a core is really focused on you know what it's what it's primarily was originally meant for was your your critical record-keeping ledger for all your bank's transactions and you know as you heard from Missha similar to AWS one of Deoxys key key differentiators is our partner ecosystem we're very focused on partners and we look at the banking community and the fintechs we find that partners are vital in four major areas micro app engagement layer you know looking at how do you effectively onboard clients how do you provision different services the artificial intelligent engine especially around analytics and looking at customer experience looking at risk mitigation looking at AML how do you use AI to really improve the processing capability and the insights that can get from the mass amounts of data that banks have to process and then you have a micro service layer and really this is more around improving the journey of the customer and also your whole middle and back office processing and then last but not least is around distributed systems of record such as blockchain when you look at some of the mortgage side of the business we're aware and we've worked with a couple banks and block change providers to use the blockchain ledger and looking at how you do mortgage processing similar to what Misha was saying we look at our partner ecosystem from four major areas strategic partners such as AWS and some of these partners are actually competitors we have solution partners channel partners why resale we have over 250 partners globally that we leverage for solutions it was mentioned by Patti that you know we were also deoxys has a relatively new offering around a salary digital banking and what we've done is we've taken a very hyper efficient highly configurable solid Hogan system that is run by about 40-plus banks around the world six to the top of ten in the US we've now enabled it as a service in the cloud working with AWS and it enables the banks really to focus as in response to the drivers we went through on customer acquisition any channel any device leveraging our partners engage with fintechs pay-as-you-go and really focus on running the bank unless I'm running the infrastructure and be a competitive position to deal with these neo banks and other challenger banks that are evolving and this is just a very quick overview you've got the core in the middle it very much opened up with api's again we leverage a lot of partners we leverage an omni-channel capability with a API layer that interacts with a lot of banking processes and then there are various optional FinTech services just mentioning one a gamba rune provides a AML kyc capability so these are already certified in our environment and it can very readily integrate into banks current capabilities or leverage one of these optional capabilities such as a digital live agent capability or digital checking capability and one of the key features is pre integrated banking API is leveraging our partner so it really makes for very flexible capability on the suppo plug-and-play capability when you want to add new capabilities into the environment some of the benefits on a cloud perspective you know it does provide cost also optimizations you heard from nesha accelerate the value if the cloud provides a lot of flexibility and agility from an IT standpoint reduce capex evolve really to an optics model and a pay-as-you-go model and eliminates risk mitigation as Mischa said a lot of people feel that the cloud is potentially more risky in fact there's a lot of checks and balances have been put in place to really help mitigate the risk and you know I in the banking capital market space one of the key regulators in the capital market space is FINRA they moved about 95 percent of their day to the cloud and you know when you have a regulator moving to the cloud that is another certification that you know it is primetime and ready really to support the banking and capital market community and last but not least you know from an overall perspective we work very closely with AWS and other partners we have a largest integrated practice with AWS around the world and we respect to believe from a differentiation standpoint you know we have a leveraged AWS marketplace our partner ecosystem to provide leading-edge solutions we've developed a joint AWS DXE infrastructure around this celerity digital based upon a proven hyper efficient core capability that processes over 250 million deposit accounts trillions of trends of dollars worth of transactions a day highly reliable highly scalable and it's Eva and we offered it to the industry as a pay you go model MSP capability and again really allowing the banks and the focus on running the bank unless I'm running the infrastructure I'll turn it back to David let me shoot me an I'll try to take their time thank you very much for that presentation also Thank You Tanisha and Patty for your contributions to this very fascinating conversation on banking digital transformation that we're having today we do have quite a few number of questions that have come in from those of you who are listening to our presentation I want to let you know there's still plenty of time to get your questions in there's an ask a question button near the bottom of your screen as you go ahead and click on that you'll be able to to ask a question to our panelists if you want to ask a question to one of our specific panelists please go ahead and indicate so whether it's for patty Misha or or Tom and we'll make sure that question gets directed to them and of course if you have a general question go ahead and send that in as well and we'll be happy to to have our panelists respond to it one of the questions that came in we'll go ahead and get started see this one came in fairly early on what do you think about the future of wholesale banking so far our impact has been on retail banking and payments primarily and let's see if perhaps maybe we could have maybe patty or Tom refer to that question how do you want to start oh sure yeah sure this is patty so we're seeing a lot of things happening in who esale too it doesn't get as much press as the consumer side of things given the nature scale of the business but but if you break it down around transaction banking we're seeing decimal innovations and Payman also there are some new startups that we're working with kind of which are doing kyc for business or KYB if you will or eky be so a little bit on the reg reg tech side trade finance supply chain financing on on the blockchain that has been going on for some time we're seeing a lot of kind of efficiencies with with that kind of model Ripple one of the first kind of blocking syntax was kind of working in that cart form in banking I say more more people have come in including some incumbent bank that are offering that or building that kind of settlement blocking base settlement or for a change of or addressing the courts foreign banking business capital markets and Tom might have some remarks on this - given its background on capital markets from from front and middle to back office there's a lot of things so Kane show which was supplied by MP if you know kind of using AI and machine learning for for optimizing trading as definitely on the clearing and settlement in the capital market sizer in a lot of watching movement including from r3 and some other players a good example I like to prote also is provenance which is my tagging new company that is doing loan securitisation on the blockchain and cutting off a lot of hundred plus basis points in the process so I think there is a lot of opportunity in the whole field side of also clan comm would you like to add something I think you've done a good job covering it paddy I want to make sure there's time for additional questions you're speaking of that let's go ahead and take a look at our second question this is a interesting one when I'm sure is on the minds of a lot of people who are looking at this possible transformation this one has to do with outsourcing and the question is do you think that outsourcing to the cloud also potentially increases risks talking about outsourcing the core bank data infrastructure that sort of thing perhaps Nisha could lease in this one now your way yes I'm happy to take this question and it is really the question I think can be addressed in multiple and there's a lots kind of tacked into this question and there's a multiple dimensions so I will address it through three in kind of three different three different perspective from a business perspective from an infrastructure manager perspective from security perspective so from from the from the business perspective I think the the one of the main benefits public cloud provides is that it frees up businesses to focus on their core core competencies and allowing it we have to take care of they have a listing of the managing and provisioning infrastructure and and and kind of removing this kind of whole infrastructure blocker which most banks in fact all banks all for all organizations to experience in your premise world because it takes such a long time to provision infrastructure to innovate on the old infrastructure because it takes time just to get new new products in minutes and and so on so to stay competitive I think it's really key for funny stories in the banks to kind of think strategically about living core workloads a - public cloud because their competitors already do and there are many examples of that so so that's one angle right just do kind of remove the heavy lifting focus on your core competency right you and and and mitigate the risk of falling behind but of course there there's a risk of convergence a risk like what what how easy owns is your infrastructure right what is the likelihood that awesome you my datacenter is now only available and to this concern I would say that the cloud infrastructure certainly this infrastructure is is at least as reliable but in many cases it's by far more reliable than traditional data centers anywhere has over 60 regions within vision we have typically three or more availability zones which are redundant data centers so it's the infrastructure design so even if the region goes down or evil abilities on goes down there's always redundant services redundant capacity which can pick up workload and custom differential doesn't notice what happened in lastly security which is really on top of the - it should be of every customer and certainly on top of the money on Amazon it's a security job zero for us is that what we've seen and it's a testament not just coming from our observation but from the custom of themselves that there's a testament from chief security officers chief information so that they in their research they find that the cloud infrastructure is more secure than their own the premise infrastructure and they actually choose cloud for that reason because cloud is more secure but of course it's important to mention that we have what we call the shared responsibility model where the cloud provider and VDS is responsible for the security of the cloud right so we make sure that the data server secure and making sure that the access is properly mitigated the permission is in place etc and then security of the cloud so the customers as they're on their workloads have to follow the best practices to ensure that there is no security breach in this plan feel best practice documentation available on how to achieve that so hopefully that address of that that question is C 3 and 3 parts and apology if it was a little too long excellent excellent thanks for taking a bit of time to address that we do have about 10-15 minutes left for our presentation and we are getting a few more questions and I do want to encourage you if you have a question for any of our panelists or something you'd like to ask sort of the panel at large go ahead and click that ask a question button and go ahead and write your question there as clearly and as simply as you can again if you want to direct it to one someone in specific I'll feel free to do that or if you just have a general question we're happy to feel that question as well but I think one question here has to do with denovo banks and generally what do you think about these for the phenomenon of de novo banks that are coming up in the in the market we have anyone on the panel who'd like to take a look at that one patty maybe you want to pick that one up since you've been working with some char oh yeah I think I think they're talking about the Challenger Bank so yeah there are several of them I think most recent I think chime raised around with two plus so in evaluation a lot of the European I having a lot of these challenger Bank came or started in Europe with revolute and 26 and Lonzo and they're all kind of setting up businesses in in the u.s. I think it's an interesting phenomenon there that the deposit shares still role compared to say traditional things but but they have huge valuation a lot of the valuation is from interchange revenue at least in the case of time I think this is to stay there they would be kind of they maybe evolved into a more kind of a lifestyle application which would also let you do banking and payment similar to like those enchants not all say in China so that's that's one option but the things that Misha and and Tom talked about are around kind of enabling these things and I think some of them are built on AWS and celerity Digital are good foundational backends to enable these Challenger or DeNoble bangs because they need a strong robust infrastructure to support their growth and as they scale their customers yeah and this is Tom just adding one additional aspect of it we also are seeing that some large banks and other digital platforms are actually working with noble banks and the larger banks are becoming the fiduciary behind these banks and even leveraging some of these banks technologies so that it becomes a very cost competitive positioning in the industry excellent we're coming up toward the top of the hour I think we've got time for another question or two what I thought might be a good question which sort of cover sort of the general the themes as you've been talking about has to do with some of the banks who might already or currently be navigating some of these core transformations like you all have been talking about I'm wondering if there's anything from those experiences that you've seen that maybe you can share with with folks in terms of how they're how the handling this is a challenge yeah this is Tom I'll start as I mentioned the beginning of my section is about 18 or 20 different banks that we're actually working with on various transformations so one example is a Midwest Bank that's a fairly substantive substantial large sized Bank with millions of accounts and customers they're in the process of transforming their bank off of mainframes off of their data centers and bring it into a digital environment digital world with cloud capabilities and so forth and what they've done is actually one of the ways they're mitigating some of their risks they've actually taken their tier 1 and tier app tier 2 applications and there wasn't using one cloud provider for that and their tier 3 and tier for applications and using another cloud provider for that and that actually gives a nice balance because this way they have competing environment from a provider perspective and they're leveraging companies such as DXE for the integration aspects and the mitigation of the risk from a migration standpoint we have a very substantial practice that helps with helps clients migrate off of mainframes and legacy platforms and it's all about mitigating risk and another key aspect of it as banks move to the digital world is ameesha covered a lot of this is what are the regulatory considerations so it's very important and what we've seen to be most effective is bringing organizations like the FFIEC into the early strategy discussions with these banks so that the regulator is well aware of what the bank is doing and not addressing it after the fact so this way you're addressing a lot of the risk and the security and other considerations and that's that's what we've seen as some of the most effective interaction with the regulators is actually getting the regulator's involved early on in the process absolutely there's something that I know that I've heard from a number of folks that when it comes particularly with regard to regulation that the sooner that they are involved the the easier it is to get the sort of questions answered need to be answered and to avoid making some of some of the mistakes that people can make and and money that can be involved I thought as we're coming up to the top of the hour maybe what we might want to do here is maybe have each of you sort of recap some of the key takeaways from your presentations there's so much information that you've been able to share with everyone today so perhaps might be a good idea if if you could send me these some up maybe some of the key things you'd like people to to sort of take with them from this presentation how do you want to go in reporter yeah or I can start or do you want to go up well maybe I'll start I think the key is as a lot lot is happening in financial services right there's a lot of disruption a lot of optimization competitive landscape is expanding it's just not your pure banks or other banks and credit unions that you're competing with so so you like when banks look at how to stay competitive and how to grow they have to look at partners and technology with a new lens we talked about your bank platform how even if you're looking at a core transformation program or a digital transformation program or or FinTech partnership program what do you do internally in terms of your technology stack and the partners you work with to achieve those goals so customers the customer centricity is key kind of focusing on the customer because an English L quoted someone in his presentation the customer expectation they want to have from a bank what they get from like a Netflix and Amazon and others in in other parts of their life so so it is a customer expectations are out of the loop and and and so customer centricity agility is critical ability to changes it's a journey not just a one-step transformation and ability to change to market forces is is paramount so that's that what I would say some of my key takeaways in shower tom yeah thanks Pat I think I can get a few from from arias perspective I mean first of all I mean I just to reiterate the importance of raising custom expectations and being a driver cannot say enough about it and syntax are being essentially responding to this to this need right it's not just a disruption but responding so I think bigger banks need to listen I think that in fact I think what's important one is that we increasingly seen more and more whole workloads being moved to the cloud into today's in particular workloads containing PII personality farm information and I know some customers were asking us like well do you know of examples and now with this plenty because that's a game changer right so that's that's really signal to the market that the core banking can and will and should move to to the cloud and lastly I do want to emphasize the role of awf plays in this in this journey of innovation essentially it reduces an enabler allowing banks and financial services companies focus on what they can do best right focusing on their core competencies and leaving this heavy lifting of managing infrastructure two to two atps and you know as a result the customers would see structurally lowering costs in unity some technical debt simplifying infrastructure being able to innovate fast and bringing new ideas to market faster and being able to run highly scale infrastructure for data analytics or on demand which is one of the major trends in the market today and I guess there then on top of all this it leads to reduction in risk because in cloud provides better tools better data and better technology curity kind of management stick technology yeah this is Tom just building off of what Patty and me should just indicate it because they covered a lot of the items I was going to mention you know the risk risk I think is one of the major considerations I mean when when banks are looking at evolving to a digital environment or any environment it has to really look at what are the risk mitigations and what are the risks impacts and what is the risk to business and regulatory oversight and so for that you need to address so you need to go into a digital transformation with a very very well-thought-out plan in regards to how do you implement when we looked at some of the material I presented you know doing a standing up a new digital platform and then doing a migration over Syria period of time you know helps mitigate that risk versus just doing a rip and replace just as one example so I think risk is a consider a major consideration as banks look at focusing on evolving their capabilities to support the customer and that's the other critical consideration is it should be all around the customer I read a recent study that in the US alone in the mitt down to the smaller to your market over 25 million current customers change banks annually that was just one study and you know what a banks need to do to retain these customers and then increase their customer base they need to provide the flexibility they need to make sure that the customer satisfaction is being met that you have the flexibility and the capability you know mentioned about payments that allotted millenniums are using VMO and some of these other payment systems to really quickly you know do faster payments and so forth and you know this the brick-and-mortar a lot of people don't even go into brick-and-mortar banks anymore so it's really having that flexibility having that risk mitigation and really focusing on the customer experience as the drivers that we're seeing and having partners you know the partner ecosystem is critical because companies today can't really build their salute technology companies can't be a holistic solution to a bank really needs to have the partner ecosystem with the way that changing technologies are continuing evolving excellent I really appreciate that but last r und of wrapping up again like I mentioned a lot of different concepts and and scenes discussed today and I think it was very very helpful for each of you to to give us a bit of a summary for something to take away with speaking of that for those of you who are curious the recording of this webinar will be available on the Senate 8 blog in the coming days so go ahead and stay tuned to this innovate blog and we'll get this this webinar recording up so you'll be able to review this I know a number of you ask questions about to that availability we want to make sure that you know that you will have the ability to ex the recording again I want to thank you for joining us I want to thank our panelists patty Misha and Tom for joining us today as well again thanks for joining us and have a fantastic day