Bank of America said it’s pursuing the partnership with Microsoft as part of its broader push towards using modern technologies. The global financial institution intends to move around 200,000 employees to cloud-based tools for more efficient work.
“We are aggressively modernizing our technology infrastructure to enable current and future growth across all our lines of business,” said Howard Boville, chief technology officer at Bank of America. “Our agreement with Microsoft aligns to our target of delivering 80 percent of our technology workloads on virtual platforms within the next several years, further establishing Bank of America as a digital leader in financial services.”
The transformation of finance
The financial services industry is one of the most lucrative targets for digital transformation providers. However, it also carries its own set of challenges that place additional responsibilities on cloud operators. Services must comply with financial regulations and meet incoming data protection requirements like GDPR.
Microsoft said its early push towards compliance has paid off. It now boasts over 80 percent of the world’s largest banks as cloud customers, accompanied by over 75 percent of “systemically important” global financial institutions. This is good news for Microsoft, a company that now states enabling digital transformation as its corporate mission. It said it offers both “breadth and depth” in cloud tech.
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“Technology is increasingly providing a competitive advantage to financial services firms looking to thrive in the digital economy,” said Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business. “Bank of America is taking a very strategic approach to cloud, looking at technology as a means to drive change and open up new business opportunities. With Microsoft Office 365 and Azure, the firm will have access to the breadth and depth of our cloud capabilities, underscored by Microsoft’s investments in security, transparency and regulatory compliance.”
The human factor
Bank of America’s digital push isn’t without its human consequences. Last week, the Wall Street Journal reported the company’s Merchant Services venture has recently laid off 10 percent of its staff due to a digital-first restructuring. Similar layoffs are being made at other banks as digital tech improves efficiency and starts handling admin tasks.
The bigger picture
Across the industry, most financial services providers are now implementing or evaluating a full digital transformation. The push towards cloud tech has become crucial to the success of banks. The rise of fintech solutions like the blockchain and mobile payments has caught traditional providers unawares. Often, their response is limited due to the tight regulations around the financial markets.
By utilising digital technology, financial services can streamline their businesses to be more efficient. This can help to mitigate the impact of agile fintech start-ups and rapidly evolving payment technologies. In the long-term, cloud platforms also give banks a route to accessing and building fintech products themselves, making transformation a requirement for long-term success.
