Learn to love your silos with Kubernetes
If data is the new currency, then who will be the banks? That was the question posed by Juan Manuel Irigaray of Equinix at the MoneyLIVE Digital Banking conference 2019. Irigaray, a self-confessed “data freak” who began his software consultancy career at the age of 14, pointed out that when it’s the world’s biggest cloud services provider hailing data as the new currency, then it’s time to listen. “Amazon Web Services says data is the new currency, and why are they saying that? Because they know something,” he said.
“According to the FCA’s survey of December 2018, about one-quarter of a bank’s expense is in IT”
It would seem big change is on its way. For many years, banks have been held back by legacy systems and data issues, their ability to innovate curtailed by the crippling costs of compliance, the problems of unlocking siloed data and competition from digital-first rivals. Irigaray cited the FCA’s Strategic Review of Retail Banking, published in December 2018, which found that IT costs account for between 18 and 26 per cent of total operating expenses.
“We see this trend, that each year more and more budget is going to IT,” he told delegates. “And IT is going to become more and more complicated. Before you were only thinking only about your services, your silos, but today it’s more complicated, you have to think about more places, more platforms.”
Against this backdrop of rising IT costs and an ever-changing regulatory landscape, banks are also grappling to stay relevant to the connected customer, who has higher than ever expectations and an increased propensity to cherry-pick banking services from a range of third-party providers.
“Everyone agrees that we need to focus on the customer. We need to think from the customer backwards and not from ourselves to the customer”
“I think everyone agrees that we need to focus on the customer,” said Irigaray. “We need to think from the customer backwards and not from ourselves to the customer. We need to have this customer focus and reduce opex and provide new services to our customers. You have to think about what kind of bank you want to be and do you want to evolve in a controlled way, or have a revolution.”
“It’s really hard to evolve if you have silos. We need to rethink how to access these silos and how to apply the compliance”
The good news is that solutions are being developed to help banks deliver. Deep learning and machine learning, for example, are helping banks get to grips with the vast stores of data they already hold. Irigaray highlighted the complexity of the data silos that reside in most banks, each with their different owners and different compliance layers. “Until now, all of these have been worked around with processes but it’s really hard to evolve if you have silos,” he said, highlighting the wasted resources and lost productivity of the current set-up. “We need to rethink how to access these silos and how to apply the compliance.”
“Your teams cannot move as fast as you want, and silos prevent creativity,” he said. “Your best talent is going to be sitting around frustrated because they do not have the tools and the access to move forward and they are delayed to get to work.”
“Banks are creating small banks that will not be eaten by the mother bank”
Some banks have decided the best way to solve this problem is to start again with a blank piece of paper. “Banks are creating small banks that will not be eaten by the mother bank,” he said.
Equinix is helping with this, deploying Kubernetes, a 2013 Google Open Source project, to work around the silos without compromising security or compliance.
“It’s a layer of software that gives you the tools to create secure services so your teams can write the application once and it can run everywhere,” explained Irigaray. Kubernetes is a cluster management system for managing containerised applications, grouping the containers that make up an application into logical units for easy management and discovery.
“This layer is the foundation for your platform, and your knowledge is going to be kept inhouse with your own way of accessing your data and complying with anything you want,” he said. “You regain control of your tech stack.”
“If you want to scale operations in the next five to 10 years you need the money to scale and the talent – and they want to work with the latest technology and that’s Kubernetes.”
He said this approach will be key to scale. “If you want to scale operations in the next five to 10 years you need the money to scale and the talent – and they want to work with the latest technology and that’s Kubernetes.”
“It’s means they can develop the products in the language they want and do not have to think about where it’s going to run,” he said. “By using Equinix plus Kubernetes and Open Banking you can learn to love your data silos.”
Juan Manuel Irigaray, aka. Juancho is Equinix Professional Services Director for EMEA, responsible for enabling and driving customers through their journey from traditional environments to new hybrid-cloud environments, in an holistic approach involving people, platform and programmatic.
Equinix connects the world’s leading businesses to their customers, employees and partners inside the most-interconnected data centres. On this global platform for digital business, companies come together across more than 50 markets on five continents to reach everywhere, interconnect everyone and integrate everything they need to create their digital futures.
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