International Business Machines announced on Wednesday that it has built financial services-specific cloud technology in collaboration with Bank of America, which will be the first major bank to use the platform.
The public platform, IBM's first industry-specific cloud, is designed to meet the high regulatory, security and resiliency standards required of the financial services industry.
"By setting a standard that addresses the concern of hosting highly confidential information, we aim to drive the public cloud to a safety level that is unmatched,” said Cathy Bessant, chief operations and technology officer of Bank of America.
Bank of America has focused on its internal cloud computing capabilities. Over the past several years the second largest U.S. bank has gotten down to about 70,000 servers from over 200,000 and trimmed its data centers to 23 from 67.
Streamlining those operations has saved US$2 billion annually, Chief Executive Brian Moynihan said on an earnings call last month. However, the bank still relies on cloud services from external vendors since third parties can usually offer the service 23%-30% cheaper, he said.
"We don't need to own the hardware," he said. "We just need to find out who can provide it the right way."
Investing in cloud computing is key for banks as more transactions become digital. It is critical that the platform can transfer information quickly, keep data private, and prevent service outages.
Before cloud technology became popular, both IBM and Red Hat, which IBM acquired earlier this year, had strong customer bases in financial services industry. But Microsoft and Amazon have been going after those customers during the cloud transition.
(Reporting by Imani Moise; Editing by Leslie Adler and Bill Berkrot)