Large financial service companies often drive the enterprise IT sector, with the ability to invest large amounts to pioneer the use of certain technologies. The cloud has been a great example in recent years, but today that technology hardly seems to get a look in when it comes to headlines thanks to artificial intelligence (AI) and – more specifically – generative AI (GenAI) stealing the show.
Every sector is doing something around AI, but the financial services sector is facing a seismic shift as the technology could see the complexity of IT and its cost reduce at an unprecedented rate. This will not come without major challenges to the organisations themselves and their people, with an AI called Dave set to perform the jobs of thousands of people without breaking a sweat.
It will come as no surprise that this year’s roundup features a few articles about banks doing AI, but there is more to reflect on such as numerous IT crashes at banks, along with interviews with industry IT leaders.
Here’s a look back over Computer Weekly’s top 10 cloud stories of 2024.
The threat AI brings to jobs in the sector is a good starting point. Various reports are predicting that banks will get fast returns on their investments in AI technology, but these savings have to come from somewhere – and it is inevitable that human workforces will reduce.
In a report, banking industry benchmarking firm Evident revealed that AI roles are the only safe jobs in the banking sector, with one in 50 employees recruited by the top 10 banks now working in AI-related roles.
It is not just those performing repetitive tasks – which is the main target for replacement by AI – that need to adapt, but senior leaders too. If they don’t get AI, then they should probably be worried about their position.
A lack of understanding of AI and what it means to a bank will hold organisations back amid intense competition, which is why banks such as Lloyds Banking Group are preparing senior staff. The bank is working with training provider Cambridge Spark to train 200 of its senior leaders to ensure the organisation can get the most out of artificial intelligence (AI) technology.
One banking leader on the coalface is ING’s CTO Daniele Tonnella. In an interview with Computer Weekly, he describes how the bank is carefully ensuring GenAI doesn’t just become a tech toy, but the core transformation force that it is.
In this interview, Tonella describes the four layers of IT he has at the bank, with the aforementioned AI developments falling within the layer focussed on innovation. The other three layers of reliability, scalable tech platform and quality control are also explained.
Of course, the finance sector is a complex ecosystem with businesses focused on specific areas. Information giant Bloomberg is a core part of the sector, providing the people or machines working in it with the information they need to make the right decisions.
In this interview, one of the key tech leaders at the company tells Computer Weekly about the current challenges and plans being addressed at the company. Unsurprisingly, this includes the adoption of GenAI,
When it comes to challenges in the financial services IT arena, few are as big as replacing the core engine at the Bank of England without creating major disruption to the country.
That’s what has been done in stages since 2017 when the regulator began plans to replace the real-time gross settlement (RTGS) system, which processes £800bn in payments a day. CIO and technology lead Nathan Monk told Computer Weekly it was “a hell of a journey”.
While perhaps not as big as the Bank of England’s core system replacement, the move to a single brand at ASN Bank in the Netherlands meant comprehensive integration, revamping core infrastructure and bolstering cyber security.
In this interview, ASN’s CTO Sebastiaan Kalshoven describes the journey. He flags his work as a swimming coach as being about continuous improvement and likens this to his current role at the bank.
If one thing is certain in the banking industry, it is that banking IT will experience outages, some of which will be quite big and disruptive – and it always seems to happen on payday.
Barclays got in on the act early this year as customers were left unable to access web app and online banking, make payments to and from their accounts, or access customer services in the wake of a significant IT outage at the bank which struck on payday in January.
Why do bank systems crash? According to experts, part of the problem is that banks are operating a “spaghetti” tech structure that is creating a game of “technology Jenga” but also that the cost of ensuring downtime is now higher than the cost of the actual downtime.
We all know about the complexity of IT at banks, but less so about the calculations used to make decisions on IT investment. One IT professional said it comes down to a simple question: how much will it cost to ensure 99.999% availability, and is it cheaper just to pay compensation when things go wrong?
But it’s not always the banks that are at fault. Today, they are increasingly reliant on third party suppliers. Lloyds Banking Group was, for example, one of the organisations hit by an outage at Amazon Web Services in the US.
With concerns mounting about the public and private sector’s over-reliance on US-based big tech platforms, the outage has led to renewed calls for greater transparency about the resiliency of the nation’s hosting arrangements.
Other third parties that have an impact on the day-to-day running of a bank are tech firms. Social media platforms are being used by scammers to defraud people. It doesn’t matter how good your security systems are if someone is duped into giving fraudsters money via social media.
This is why banks and tech firms are coming together in an initiative to share information on fraudsters. Read more about the intelligence-sharing pilot, which have brought together banks such as HSBC, NatWest and Santander with tech firms Amazon, Google and Meta.