Previously a senior software engineer at Google, William Montgomery brought unique insights into developing large scale cloud infrastructure with him when he joined Thought Machine as chief technology officer. We caught up with Montgomery to discuss the move away from legacy systems and how banks are looking to the cloud.
What previous experience did you bring to your role at Thought Machine?
Google’s cloud infrastructure is what inspired us to build our cloud native core banking technology, Vault. At Google I was exposed to a culture of engineering excellence which is something I have drawn upon to ensure that our engineering team at Thought Machine - accounting for over 80 percent of the company - is agile, productive and happy.
What hurdles do you see in the industry at the minute?
One of the biggest challenges faced by banks is that they are operating on end-of-life legacy technology, most of which date back to the 1970s. These platforms create numerous challenges and stifle a bank’s ability to compete with some key challenger banks who are operating on cloud architecture. Operating in the cloud enables them to provide highly adaptable, reliable services. Thought Machine’s cloud native core banking platform, Vault, offers a chance to banks to start afresh and abandon these outdated systems. Incumbent banks are hugely interested in a cloud native banking system as security is enhanced, and systems are always up, even during upgrades and hardware failure.
The company recently entered relationships with Google and SEB. What are your hopes for those relationships?
We are cloud agnostic and partner with the main cloud providers, such as Google. We work with these technology partners so we can build the most modern core banking technology in the cloud. With all of our customers our aim is to build the most powerful and flexible banking technology, while ensuring that they can operate with the best cost/income ratio.
How do you believe the fintech ecosystem has changed over the past few years? And where's it going?
Some challenger banks have been driving innovation and raising customer expectations which creates reciprocal value for the entire fintech ecosystem. This new competition has led to a mindset change within incumbent banks who are building innovation centres and looking to work with fintechs to enable their digital transformation. Over the next couple of years, I expect that this trend will very much continue. Rather than trying to build their technological capabilities in-house, banks will outsource their technology problems to a wider selection of technology companies with specific domain knowledge in areas such as KYC, ID verification or core banking. Meanwhile, the hype in fintech around cryptocurrency will give way to more pragmatic technology solutions adding real value to the ecosystem.
The company is very active in cloud technology. Which corners of the market are most interested in the technology, and what are the applications?
Consider two of the world’s largest technology companies - Netflix and Spotify - both of these operate on the cloud. For a number of different reasons, the banking industry was lagging behind the rest. However, over 50 percent of banks in the UK recently stated that they have a cloud adoption strategy to implement over the next two years. Banks recognise that the cloud provides the opportunity to abandon their legacy systems and take full advantage of the benefits of cloud native technology. One of the huge advantages I see to using cloud technology is for banks operating across different geographical areas. With new data sovereignty laws placing controls over how customer PI information is stored, the cloud enables banks to have good control over where the data goes.