RBS calls for UK financial services cloud

18 March 2014

The chief analytics officer at Royal Bank of Scotland (RBS), Alan Grogan, has called for the creation of a UK financial services cloud to allow banks in the nation to access the technology and take advantage of the benefits it can offer.

He also argues that the creation of this initiative will mitigate the risks associated with the banking industry making use of the cloud.

Speaking to Computing, he said that the reason the technology has not been utilised more often by banks is not because they are sceptical of it and the security measures required, but that financial institutions are sceptical of the public's general attitude towards the cloud.

The main benefits of banks moving towards cloud services have been well reported in the past, with cost savings one of the top reasons to embrace the technology within banking.

Mr Grogan said: "I think banks obviously want to go to the cloud because of the costs, benefits and deeper levels of security. Instead of having various risk, resilience and security teams looking at a large widely spread global internal infrastructure, if you go to the cloud and do it correctly, you can divide installations between the specialists teams, so in theory it becomes a lot more protected in my view."

However, despite the cost savings and increased levels of security present within the cloud in the modern day, banks have still been reluctant to make use of the services made available to them by cloud providers.

Much of this is down to concerns over a potential loss of control, availability and ongoing issues with data security. These factors act as significant barriers to making the move to the cloud. This is a massive leap in the heavily regulated banking sector, with regulations altering all the time.

Legal concerns have also held back the industry, as the cloud is constantly changing and evolving, which means legal teams need to stay on their toes and react to new developments as they occur.

Mr Grogan believes that the creation of a UK financial services cloud will remove this doubt from banks operating in the UK. He told the news provider: "I'm a big fan of putting in place a UK financial services cloud, I think it will be a fantastic statement by government or industry to say yes, put all banks onto the cloud, and that way you'd get all of the risk and security experts looking at partitions of the risk."

He suggested the creation of one team, divided into specialisms, to control and mitigate risks, which can be broadened to cover the whole of the financial services sector.

Despite the clear benefits the cloud can provide to the banking sector, Mr Grogan says that no single bank will lead the way or push for its wider adoption, because elements of the industry, such as payment infrastructure, would need a collaborative approach, as well as the sponsorship of regulators and other parties.

Mr Grogan suggested that banks should first "sort out their backyards first", and then work together to reap the benefits of the cloud.

Some banks have ventured into the use of cloud technologies, but focusing on elements of their operation that can be easily moved to the cloud without requiring the regulatory compliance and security of customer data elements.

By Gary Cooper

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