Cloud Enabling Digital 2.0 and 3.0 Banking

Recently I was asked why does the cloud matter for the bank??

When I talk to business leaders, the value of the cloud is usually about agility, scalability, and resiliency, just as Jamie Dimon, CEO of JPMC Chase, so well articulated in his 2019 Annual Shareholder Report. When I talk to my technology friends, it is usually about cost savings and speed to provision.?

What do I think about the value of the cloud? I see the value of the cloud in enabling Digital 2.0 and 3.0 banking. What do I mean by that??

Digital 1.0?- Easy Access Banking

In Digital 1.0, the goal is about easy access. It is about providing banking access to customers any time, anywhere, and on any device 24*7. This is the first digital wave of digital web and mobile banking.?

Digital 2.0?- Open Embedded Banking

Digital 2.0 is about open embedded banking. It turns the bank from a place to go, to banking being an embedded activity transparent to the customers. In a way, this is going back to the time, before the Medici family first invented the modern double entry accounting and banking in the Middle Ages. Before then, people were doing banking without even thinking about banking.?

When I ask customers why they bank with us., the typical answer is: "We like your people, a lot, and you have developed specialized banking capabilities for us over the years that I can't get anywhere else, at least not at your scale". These enterprise capabilities are "Blackbox" enterprise banking capabilities. Digital 2.0 unlocks these "Black Boxes" into "Gray Boxes" through Cloud APIs and middleware fabrics, so that we open up these enterprise capabilities to benefit a broader customer base. Through ecosystem players, cloud externalizable API gateways, marketplace data aggregators, and industry data standards, Digital 2.0 transforms these "Gray Box" capabilities into "Open Box" banking capabilities. Through composable architecture, these "Open Box" capabilities are then embedded into customer business workflows so that customer can do banking with simplicity and convenience. This "Open Box" is what we call open embedded banking.?

Digital 3.0?- Intelligent Banking

In Digital 3.0, we evolve the "Data Warehouse" into "Data Lake", and then into "Data River". The "Data River" enables business workflows and applications to all "take a drink" from the same river, with proper hygiene, so that AI/ML intelligence can emerge and is applied at the point of customer interaction. The "Data River" architecture also allows us to securely tap into the sophisticated analytics models in the ecosystem as a SaaS (Software as a Service), to provide leading-edge analytics capabilities. In this sense, AI/ML is the new UI and CX, in which banking becomes intelligent, and more personalized for our customers.?

Digital 2.0 and 3.0 require an open ecosystem mindset and the composable architectural approach to build with the requisite data agility and resiliency at scale. This is only possible with cloud scale and the secure cloud interconnect network fabric.

What is the value of the cloud? I believe, it is to deliver Digital 1.0, 2.0 and 3.0 at scale.?

How do you achieve the value of the cloud? Your comments and response are welcome below.?