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The Digitization of Banking: 5 Things You Need to Know

Bank

Lynn Haber**Editor’s Note: Register now for the Channel Partners Conference & Expo, the gathering place for the technology services community, April 10-13, at Mandalay Bay in Las Vegas.**

Disruption is upsetting industries at every turn and banking is no exception. According to industry analysts, financial technology, or “fintech,” is booming worldwide, with banks changing the way they interact with customers on the front-end while also working on improving digital enablement across the enterprise.

Today, one in five Americans banks with financial institutions that have no physical branches. What’s more, some data points on millennials and banking from American Banker are eye opening. For example, one-third don’t see the need for a bank in the future, they’re unstable banking customers, they love a good app, and 92 percent would make a banking choice based on digital services — in other words, they’re mobile and like their banking that way too.

CSM's Jim HarperIt’s a great time to learn more about banking and digital transformation. That’s exactly what’s in store for attendees at “The Digitization of Banking: 5 Things You Need to Know” concurrent education session at the upcoming Channel Partners Conference & Expo in Las Vegas, April 10-13.

We talked to session speakers Jim Harper, business development manager at Crytycal Services Management (CSM), and Kris Bliesner, founder and chief technology officer at managed cloud services provider, 2nd Watch, about digitization, banking and what you need to know about the digital revolution underway in finance.

Channel Partners: What do you see happening in the banking industry?

Jim Harper: We’re seeing more application development and on-premises banking pushed out electronically to the consumer, to the member of the credit union, etc. Having that strategy, it’s a lot less expensive to have your application and transaction processing in the cloud versus brick and mortar. Also, when you push those transactions to the consumer, you provide them with control and give them banking their way — just as we have control over the type of music that we play with Spotify as an app.{ad}

From a business perspective, you’re not going to eliminate the brick and mortar, but you are going to minimize it and it’s going to allow you to have more control via analytics managing data centers and being able to manage those applications and bring more of the customer’s electronic information and be able to do some predictive analysis.

CP: Kris, would you address the challenge of working with a regulated industry like banking?

Kris Bliesner: From our perspective, what’s interesting about what’s going on in the more regulated industries, like banking, is that there’s a concerted effort to move more to the public cloud and do so at a rapid pace. But, the bigger challenge that we see in these industries is that folks have a hard time figuring out how to consume this stuff versus other things from a technology perspective.

Our goal is to help customers where …

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… we can, such as governance and compliance, procurement, security, as well as enabling the self-service aspect. And that’s probably one of the unique things that the banking industry has to deal [with]. They feel like self-service drives innovation, but the challenge is that it blows up their compliance and risk efforts.

2nd Watch's Kris BliesnerCP: Tell us more about banking and the public cloud.

KB: Companies are finding that they need to be competitive in this space and if they can reach their compliance and security guidelines in the public cloud, they will absolutely use it. Capital One, for example, has been very public about [its] plans for the public cloud and [its] consolidation efforts. I think what they realized was there’s not a value-add for them to manage their own data center. They’d much rather focus on the user experience side of things.

What you’re seeing are banks saying, “This is a differentiator, which will get me more customers and more revenue.” You can run very secure and compliant applications on top of a cloud platform. For example, we are a public cloud-native company, we don’t have any hardware at all, and we’re a SOC 2 compliant company, which is important for banks and insurance companies. That’s a traditional data-center certification for security, availability and confidentiality.{ad}

CP: What do you hope attendees of this banking session learn?

JH: The importance of understanding how managed service providers (MSPs) can create and enhance the value of a relationship with financial institutions. It’s reappropriating the control of the business and being more business-centric and creating greater efficiencies within the workplace.

KB: I want to give attendees confidence that applications can be deployed in the public cloud — that you can host highly sensitive data, you can host security data and you can run compliant applications.


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