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IBM this week rolled out its first cloud crafted for the financial services industry. The IBM Cloud for Financial Services was co-developed with the Bank of America, with added help from Promontory Financial Group, a financial services regulatory compliance consulting company.
The financial services cloud delivers Red Hat's OpenShift as a service. It's built on the IBM Cloud and has an ecosystem supported by 90 partners, including VMware, SAP and EY.
"The value of a financial services cloud is it helps address clients in highly regulated industries with their very specific needs," said Hillery Hunter, vice president and CTO of IBM Cloud and an IBM fellow. "[IBM Cloud for Financial Services is] really the next generation of cloud, in that it gives users a way to use the cloud with appropriate levels of security and compliance when migrating workloads across multiple clouds."
The new offering uses the fourth-generation confidential computing capabilities, along with IBM's Keep Your Own Key encryption delivered through IBM Hyper Protect Services. Giving users their own encryption keys means they are the only ones who can control access to their data.
A key component of the new product is the IBM Cloud Framework for Financial Services, co-developed with Bank of America and Promontory, an IBM company acquired in 2016. The framework is responsible for delivering a set of industry-specific security and compliance controls that serve bank-sensitive data in the public cloud, according to IBM.
"Promontory provides our financial services and regulatory consulting expertise. They monitor regulations globally," Hunter said. "IBM, Bank of America and Promontory form a three-legged stool made up of our core collective technology, the bank's expertise and regulatory experts providing us with perspective on what regulators globally are thinking."
Vertical cloud market on the rise
IBM has already delivered a cloud aimed at the telecommunications market, and is working on offerings for the healthcare and insurance industries. Hunter said IBM's current and future vertical cloud offerings will be able to share native cloud services across industries.
"The interesting thing with cloud [computing] in the telecommunications and financial services is, now it will be possible for users to set up platforms across industries," Hunter said. "In the cloud users can do things, create their own privacy and security context, and do things in a multiparty way that weren't possible when everyone was doing their own thing on their own premises."
Hillery HunterVice president and CTO, IBM Cloud
IBM hardly has the vertical cloud market to itself: Microsoft has announced its Microsoft Cloud for Financial Services, along with the Microsoft Cloud for Manufacturing and the Microsoft Cloud for Nonprofit. All of these offerings will be able to access and share common cloud-based Microsoft services, including Microsoft 365, Teams, CRM and ERP products and Dynamics 365.
Frank Dzubeck, president of Communications Network Architects, praised IBM's approach to developing vertical clouds.
"I think this is a good announcement, in that it was driven and even partly developed by IBM's customers," he said, referring to IBM Cloud for Financial Services. "Microsoft took more of an 'if we build it, they will come' development approach and didn't reach out to customers when they were putting it together."
Also jumping into the vertical cloud fray are Salesforce and Oracle. Salesforce's offering comes via the acquisition of Vlocity a year ago, and has so far delivered four vertical clouds. Oracle has also unwrapped a cloud targeting the telecommunications industry and is looking to deliver entries for other vertical markets.
Mark Bowker, senior analyst at Enterprise Strategy Group (ESG), said that while he likes the idea of vertical clouds, it's too early to know how heavy their impact will be. One issue could be providing adequate industry-specific services and consultants.
"Microsoft, AWS, IBM and Google all provide consultants and offer access to engineers to solve business's problems," Bowker said. "But at the end of the day, can they scale across all the customers in healthcare, financial services and other industries that are unique or highly regulated? There are a lot more touchpoints to deal with relative to these customers."
Users who purchase IBM's Financial Services offering will be able to access on-demand training and certification program through the company's Center for Cloud Training by the end of this month. The program will introduce users to the core concepts of the financial services cloud, important components and applications and solution architectures.
Enterprise Strategy Group (ESG) is a division of TechTarget.
As editor at large with TechTarget's News Group, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals. He also worked for 26 years at Infoworld and Computerworld, covering enterprise class products and technologies from larger IT companies, including IBM and Microsoft, and served as editor of Redmond for three years overseeing that magazine's editorial content.