IBM and Bank of America Collaborating to Build a Fintech Public Cloud

IBM seems to be playing to its strong suit with the announcement that it has been collaborating with Bank of America to create a cloud dedicated to meeting the special needs of financial services institutions and their suppliers. According to Big Blue, the "financial services-ready" public cloud, which it says is the first of its kind, has been designed to help address the requirements of financial services institutions for regulatory compliance, security, and resiliency.

Although IBM's cloud seems to be stuck in a third-place tie with Google for market share, its position is buoyed by the fact it doesn't compete directly with the much larger full-service market leaders -- Amazon Web Services and Microsoft Azure -- but has been concentrating on AI, with Watson, and the burgeoning hybrid and multi-cloud market.

In the later arena, it not only brings decades of experience to the table, bolstered by its recent acquisition of open source cloud leader Red Hat, but a loyal customer base of enterprise customers, many of whom have not yet embraced the cloud native technologies that are now considered essential for successful business operations.

The new fintech-focused cloud will operate as part of IBM's existing public cloud and appears to follow the company's inclination to stay in familiar territory. IBM can draw on its experience working with major financial institutions (by its estimation it counts 47 Fortune 50 companies as well as the world's 10 largest financial institutions as customers), and can enlist aid and advice from financial sector customers who stand to benefit from a fintech cloud, as the collaboration with Bank of America indicates.

Related:Bank of America’s Cloud Expansion Could ‘Save a Ton of Money,’ CEO Says

"This is one of the most important collaborations in the financial services industry cloud space," Bank of America's chief operations and technology officer, Cathy Bessant, said in a statement. "This industry-first platform will allow Bank of America to use the public cloud, putting data security, resiliency, privacy, and customer information safety needs at the forefront of decision making. 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."

IBM says that Promontory Financial Group, the financial consulting firm it acquired in 2016 -- the New York Times called it "one of the top financial consulting firms to emerge after the global financial crisis of 2008" -- is involved in the project, as is Red Hat, which supplies OpenShift as IBM public cloud's primary Kubernetes environment. IBM indicated that OpenShift will be harnessed in the financial cloud.

According to IBM, the controls the financial services cloud will put in place will free independent software vendors and Software-as-a-Service providers to focus on their core offerings, adding that ISV or SaaS providers will have to demonstrate compliance with the platform's policies.

"The financial services-ready public cloud represents an ongoing focus from Bank of America, IBM, and Promontory to help develop a technology ecosystem where regulations can be addressed," Bridget van Kralingen, IBM's senior VP of global industries, clients, platforms, said in a statement. "Together we plan to help our customers address their ongoing compliance requirements, coupled with highly scalable, standardized capabilities that will be built to help serve today's modern financial services industry."