All posts by James Middleton

Huawei, partners push cloud transformation for financial IT

He: Concentrating on core competencies

He: Concentrating on core competencies

As part of its expansion into IT services and the financial services markets, Chinese telecoms giant Huawei has partnered with 11 banking IT solution providers to establish an open platform ecosystem for the finance industry, reports Banking Technology.

The collaboration was announced during Huawei’s Global Financial Services Industry Summit in Beijing last week. The launch partners are Accenture (China), Beijing Advanced Digital Technology, Beijing Yucheng Technologies, Beiming Software, DHC Software, Deloitte Business Advisory Services, Digital China System Integration Service, First Data, Infosys Technologies, Micro Focus, and Worldline Technologies.

David He, president of marketing and solution sales at Huawei’s Enterprise Business Group, that that Huawei will focus on its core skills as a hardware platform provider, based around its BDII – Business-Driven ICT Infrastructure – approach.

“The new ecosystem is designed to address the IT transformation needs of financial organisations [and] promotes BDII within the financial industry by enabling our partners to focus on their core competencies,” said He. “For example, consulting firms, application vendors, and system integrators will be able to leverage their in-depth understanding and practical experience around industry applications, while Huawei, as a hardware platform provider, will focus on ICT infrastructure.”

Collaboration was one of the main themes of the event. During a keynote presentation, He said that collaboration and joint innovation between banks and vendors is essential to overcome the challenges faced by the financial services industry as it faces the dual threat of new digital and mobile technologies being harnessed by new, agile competitors.

The company also jointly published a white paper, Transformation and Reconstruction of Banks in the Digital Era, with Deloitte. In it, the two companies highlighted the need for banks to implement a digitalisation strategy supplemented by powerful and supportive systems, and IT capability construction.

The white paper argues a key component of the strategy is the transformation of cloud architecture, which enables banks to improve analysis efficiency, lower the cost of operations and innovation, and enhance data storage and disaster preparedness capabilities. In addition, big data strategies enable banks to quickly respond to real-time customer demands by analysing massive volumes of customer data. The transformation from multi-channel to omni-channel systems will also help banks provide consistent and seamless customer experiences.

By launching the open platform ecosystem for the finance industry, Huawei and its partners hope to help financial institutions migrate from closed to open IT architectures and enable enhanced customer experience and convenient service innovations in a safe and reliable operating environment.

As part of the collaboration, Huawei is working with other members of the ecosystem to launch a range of open platform-based solutions for the finance industry, including an online banking cloud (based on private cloud architecture for finance), a credit loan cloud, a direct banking cloud, a micro-and-small-loan service cloud, a core account cloud, a credit card core application cloud, as well as mobile teller and home banking capabilities. These solutions have helped companies including the Spanish Bolsas y Mercados Españoles exchange build a cloud-based equity trading system.

“Huawei facilitates IT architecture transformation within the finance industry by providing highly reliable x86 cluster systems to support core transaction systems, in addition to cloud architecture for finance that supports the transformation of the business and processes of banks,” said Wang Hongfeng, general manager, finance solutions, in Huawei’s EBG.. “Huawei also provides platform resources support through our open labs, innovation centres, authentication centres, and secondary development and remote support. Through cross-practice cooperation, Huawei hopes to speed up the evolution toward open platform architecture in the financial services industry.”

Citizens Bank signs 5-year managed services deal with IBM

Citizens Bank has tapped IBM for a managed services deal

Citizens Bank has tapped IBM in a managed services deal

Citizens Bank is moving its back-end technology infrastructure to a managed services environment following the signing of  a five-year IT services agreement with IBM.

Using a hybrid IT approach, IBM will optimise the bank’s existing IT infrastructure by integrating automation and predictive analytics technologies to standardise and streamline many of its internal IT systems and processes, including core banking applications, branch operations and online and mobile banking.

“Information technology plays a key role in our ability to anticipate and meet the needs of every customer, across every channel,” said Ken Starkey, chief technology officer, infrastructure services, Citizens Bank. “This agreement with IBM will provide immediate access to new technologies and capabilities, enabling us to create greater efficiencies in support of Citizens’ growth objectives.”

Under the contract, IBM will operate Citizens’ existing and future IT systems located in the bank’s data centres in Rhode Island and North Carolina. The bank already uses IBM systems and technologies. IBM also will support Citizens’ voice and data networks and provide IT support for all Citizens colleagues.

Philip Guido, general manager, IBM Global Technology Services, North America, said: “This is part of a multi-stage transformation of Citizen’s IT environment that lays the foundation for integrating additional IBM solutions in the future, making the bank more agile and responsive to the growing needs of its customers.”

Leeds Building Society targets customer engagement with HP deal

Leeds Building Society shifted its savings and lending business onto a hosted HP platform in 2013

Leeds Building Society shifted its savings and lending business onto a hosted HP platform in 2013

Leeds Building Society is to revamp its customer engagement tools through a ten-year deal with HP Enterprise Services, which will encompass a number of independent software vendors working on different parts of the business. The deal builds on the earlier deal between the two firms in 2013, which focused on moving the building society’s core banking platform to the cloud.

Under the 10-year agreement, HP Application Transformation Services will work with independent software vendors TIBCO, Numéro and Infor to provide Leeds Building Society with customer engagement capabilities hosted in an HP Helion managed virtual private cloud environment. This will help the society streamline its mortgage and savings processes, making it easier to grow market share and penetrate new market segments.

The deal has several parts. Omni-channel customer experience management specialist Numéro will provide contact management capability for new customer communication channels. The idea is to ensure the building society can offer support across any communications channel, without the customer having to start the process again. Infor’s multi-channel, interactive campaign management solution, Infor Epiphany, will help the building society to offer customers personalised communications, allowing the society to strengthen individual customer relationships. HP Exstream will provide customer communication (such as statements, notices and renewals) through customers’ preferred channel. TIBCO ActiveMatrix BPM software will digitise its business processes, systems and applications.

“Like all financial institutions, our future is dependent upon delivering the right services for current and future customers,” said Tom Clark, chief information officer, at Leeds Building Society. “ICE represents the cornerstone of our long-term strategy to deliver significant productivity and customer communication channel improvements while reducing costs and meeting regulatory requirements. HP already hosts our core application for mortgages and savings and, with a proven track record of delivering large-scale hosted services and innovative technology, can help us to achieve our business objectives.”

Leeds Building Society joined the shared services alliance founded by HP Enterprise Services and the Yorkshire Building Society in September 2013, in a deal that saw the society move its core application for mortgages and savings to the cloud. The deal also marked a growing recognition among the UK’s mid-tier institutions of the power of cloud to help them move with the times.

HP’s original deal with the Yorkshire Building Society involved shifting the building society’s core mortgage and savings application to the cloud. That in turn enabled the Yorkshire to effectively offer its automated mortgage sales, lending and savings account processing product as a white labelled solution to other financial institutions (which it had been doing for years), through HP.

The Leeds Building Society is the fifth largest of its kind in the UK, with assets of £10 billion. Founded in 1875, the society has approximately 703,000 customers and 65 branches in the UK, with 29 in Yorkshire and a branch each in Dublin and Gibraltar.

Cloud democratises retail investor services

Cloud has the potential to democratize investment services

Cloud has the potential to democratize investment services

Cloud services are opening up possibilities for the retail investor to create individual customised funds in a way that was previously the preserve of the super-wealthy. Coupled with UK regulation such as the Retail Distribution Review, the effect has been to make new business models possible, according to Michael Newell, chief executive at InvestYourWay.

“Nobody is really talking about how the cloud is fundamental to what they do, but it is,” said Newell. “Where previously it might have taken days or even weeks to get the information to set up a fund, and to change your portfolio and positions completely, and to activate your account, it now takes just a few seconds thanks to Amazon Cloud.”

Newell previously worked at BATS, where he was involved alongside Mark Hemsley in setting up the exchange’s ETF services. For some time, he had been increasingly aware of the kind of services that high net worth investors were getting and began to form an idea that someone could bring that to the common retail investor. The idea was to create a system where each individual person has their own fund. However, Newell soon realised that to make that possible, it would be necessary to service customers investing smaller amounts at significantly lower cost – something that had never really been viable up to that point.

“You’d never get that kind of individual attention unless you were high net worth,” he said. “If you’ve only got £2,000 to invest, it’s not going to be worth a fund manager spending the time with you and charging just a few pounds for their time, which is what they’d need to do to make it viable. It just didn’t work.”

Cloud services changed both the economics of the situation and the practicality of his original idea. Newell found that by obtaining computing power as a service, calculations that would have taken 48 hours on a laptop could now be completed in 30 seconds. A manual Google search process carried out by an individual to work out how best to invest might take days at the least, or more realistically weeks and even months – but on InvestYourWay, it can be done in seconds because the process is automated.

Part of the impetus for the new business was also provided by regulatory change, which began to make it easier to compete in the UK with the established fund managers. Specifically, the Retail Distribution Review which came into effect in January 2013 had the effect of forcing fund managers to unbundle their services, providing transparency into previously opaque business charges. Customers could now see exactly what they were being charged for, and that has had the effect of forcing down prices and changing consumer behaviour.

“It’s amazing that it took so long to bring that to the retail investor,” said Newell. “If you think about it, all of this has been happening in the capital markets for years. The focus on greater transparency and unbundling. The clarity on costs and fees.”

However, the idea still needed visibility and a user-base. This was provided when the platform agreed a deal with broker IG, under which InvestYourWay became a service available as an option on the drop-down menu for IG customers. The platform launched in October 2014, offering investment based on indexes rather than single stocks. This was done in part to keep costs down, and partly for ideological reasons. Newell explains that alternative instruments such as ETFs are popular, but would have involved gradually increasing slippage over time due to the costs of middle men. Focusing on indexes removes that problem.

The platform also claims to be the first to offer non-leveraged contract for difference trading. While around 40% of trading in London is estimated to be accounted for by CFDs, normally these are leveraged such that an investor who puts in £1,000 stands to gain £10,000 (but may also lose on the same scale). But IYW’s contracts are not leveraged.

The interface of the platform has quite a bit in common with the latest personal financial management interfaces. The first page consists of a time slider, a risk slider, and the amount the user wants to invest, as well as preferred geographical focus – Europe, America or Asia. After that, users get a pie chart breaking down how the service has allocated their investment based on the sliders. For example, into categories such as North American fintech startups, Asian banks, European corporates, etc. Users also get bar charts showing the historical performance of the fund they are designing, as they go along. They can also see an Amazon-style recommendation suggesting “People who invested in X, also bought Y…”

After that, the user is presented with optional add-ons such as investment in gold, banks, metals, pharmaceuticals, and other areas that may be of special interest. Hovering the mouse over one of these options allows the user to see what percentage of other funds have used that add-on. Choosing one of the add-ons recalibrates the fund that the user is creating to match, for example adding a bit more Switzerland if the user selected banks.

In a demonstration seen by Banking Technology, it was possible to adjust a fund by getting out of Europe and moving the user’s investment to Asia in a few clicks. According to Newell, it would take weeks to do that the traditional way. The process might involve moving money from one fund manager to another or starting an entirely new fund. It was also possible to see how much the cost of that move was – in a demonstration seen byBanking Technology, on a £10,000 investment the cost was £13. Prices are matched to the most recent available end of day data.

NCR offers cloud control for Android-based ATMs

NCR says Kalpana can nearly halve the time it takes to deploy new services

NCR says Kalpana can nearly halve the time it takes to deploy new services

NCR has announced a radical new approach to ATM network deployment, with a cloud-based enterprise application allowing banks to control and manage thin-client devices running a locked-down version of the Android operating system.

Called Kalpana, the software can result in a 40 per cent reduction in cost of ownership and halves the time it takes to develop and deploy new services, the company claims.

Robert Johnson, global director of software solutions at NCR, said banks are under pressure to improve services and reduce costs and so are “making very careful technical choices”. With increased emphasis on digital mobile and internet banking the ATM channel “has started looking a little disconnected”, he added.

ATM architecture development has been relatively static over the past 10 to 15 years, and while the devices have become more sophisticated in terms of features such as cash deposit and recycling, colour screens and online chat capabilities, essentially they are all customised PCs, creating problems of management, security and cost.

According to Andy Monahan, vice president of software engineering and general manager for Kalpana at NCR, the recent migration from Microsoft Windows XP to Windows 7 “has forced a rethink” and a few years ago the company decided that Monahan’s team at NCR’s Global R&D centre in Dundee, Scotland, should “take a blank sheet of paper and ask ‘what should we build next’”.

“There are two main discussions that we have with CIOs,” says Monahan. “One is whether there a viable alternative to Windows and the second is about the fact that the banks have a fairly clear idea of the IT architecture they want, and they want it to be consistent.”

The choice of operating system was relatively straightforward, he said. “When you look across the spectrum of embedded operating systems Android is pretty standard.”

By having a thin-client Android based device “everything that is customised is removed from the device and taken into the enterprise”, from where it can be configured and managed remotely. It also dramatically improves security. “By removing everything from the ATM thin-client and taking it into the cloud you create a locked-down environment that is very secure: there’s no BIOS and there’s no hard drives, just a secure boot loader that validates the kernel and checks all the certificates,” said Monahan.

By having the management systems in the enterprise software stack it is easier to develop new applications and services alongside other channels such as mobile and internet, ensuring a faster time-to-market and a more consistent customer experience, as well as to simplify management and maintenance tasks.

The first ATM to work in the Kalpana environment is NCR’s new Cx110, which uses Android tablet technology. Cardtronics, the world’s largest retail ATM owner/operator, has already taken delivery of the Kalpana software and Cx110 ATMs and plans to pilot them at locations in the Dallas-Fort Worth area, beginning “in the next few weeks”.

NEC builds cloud presence in China

Japanese equipment vendor NEC this week signed a memorandum of understanding with Chongqing City, one of China’s four national central cities, with a view to forming a strategic partnership in the smart city and cloud service areas.

Chongqing is a major city in Southwest China with a population of 28.8 million and aims to shift its status from an industrial-oriented economy to a communications industry hub.

Most operators to opt for cloud-based RCS

Despite the operator support behind Rich Communications Services (RCS), it will only be the very biggest international players that deploy the technology in their own networks. The rest will look to cloud-based offerings to fulfil their needs, according to business systems firm SAP Mobile Services.

John Sims, president of SAP Mobile Services, recently told that “only the biggest operators in world will deploy RCS in their networks. But beyond the top five or ten operators globally, the rest of the industry will look for a hosted solution.”

Open source cloud tools show signs of maturity

Open source cloud computing software CloudStack, which is developed by all-volunteer association the Apache Software Foundation (ASF), has this week graduated from the Apache Incubator to become a top level project. The move signifies the maturity of CloudStack as an open source tool for creating, managing, and deploying infrastructure cloud services.

CloudStack uses existing hypervisors such as KVM, vSphere, and XenServer/XCP for virtualisation and supports the Amazon Web Services (AWS) API as well as offering its own. Target environments include service providers and enterprises where it can be used to set up on-demand cloud computing services or a private cloud for use by internal employees.

Opcos looking to enterprise for cloud revenue

Although large enterprise customers remain the focus for mobile operators worldwide when it comes to deploying cloud services, operators feel unlikely to generate a significant return on investment from cloud services in the short term.

The Intelligence Industry Survey asked what percentage of revenues operators are likely to invest in cloud services over the next two years. The mode response was between 11 and 20 per cent – with 28.9 per cent opting for this bracket. When asked what percentage of revenue respondents believe operators will see for their investment, the mode response, with 38.1 per cent, was zero to 10 per cent.

Opera optimises with Skyfire purchase

Norwegian software firm Opera has acquired Silicon Valley based Skyfire Labs, a specialist in mobile video optimisation and cloud. The firm is known for its Rocket Optimizer software which allows mobile operators to use cloud computing to optimise video and multimedia on crowded cell towers, in 3G and 4G LTE networks.

The acquisition price includes $50m cash upfront and performance based earn-out payments over three years, including $26m in cash held that can bring the total deal size to $155m.