Efficiency and cost-savings are two reasons financial institutions are tapping into their cloud providers’ AI capabilities rather than building the technology in-house.  

The cloud is serving as a gateway to financial institution clients to “reap the benefits of AI,” William Borden, corporate vice president of worldwide financial services at Microsoft, told Bank Automation News. 

“We are seeing increased interest from our customers on the move to the cloud,” Borden said, adding that migrating can help companies “modernize their core systems, optimize their operations, and deliver innovative services to their customers.”

According to a report published last month by technology consulting company Capgemini, 91% of financial services executives say the cloud is an enabler of catalyzing growth in financial services. 

The survey this year of 500 senior leaders of global financial services firms about their cloud strategy found that by “implementing cloud at scale, financial services firms can fully unlock their abilities to leverage new technologies such as generative AI.” 

Amazon Web Services, Google and Microsoft Azure, all reported an increase in their cloud revenue in the third quarter: 

• AWS reported a 12% year-over-year increase in its net sales to $23.1 billion; 
• Google’s cloud revenue increased 18.5% YoY to $8.4 billion; and 
• Microsoft’s cloud revenue increased 24% YoY to $31.8 billion. 

Financial institutions that have migrated, or are migrating, to the Microsoft cloud include U.S. Bank, Eastern Bank and ABN AMRO, according to Borden.  

Barclays, Capital One and Goldman Sachs use AWS’ services, while Royal Bank of Canada, KeyBank and Scotia Bank use Google Cloud’s platform, according to the companies’ websites. 

Advantages of cloud platform offerings 

Migrating can help financial institutions keep up with AI, which can be both timely and expensive, Sanjay Sidhwani, chief data and analytics officer at Morristown, N.J.-based Valley Bank, told BAN. 

By moving away from on-premise infrastructure, FIs can improve their ability to scale, maintain and launch technological features — including AI, Sidhwani said.  

“Those are the advantages of cloud platform,” he said, noting that FIs can “get a little hamstrung if you are not on the cloud” in the age of rapidly evolving AI. 

Valley Bank is working with cloud provider Snowflake and AWS to move its operations to the cloud, Sidhwani said. The $61 billion bank has moved all its data to the cloud and is working to move its applications to the cloud as well to roll out features and innovations in a better manner, Sidhwani said. 

Cloud-enabled AI in action 

Financial institutions are looking to their cloud providers for AI, especially as the tech giants continued to invest in the technology throughout 2023. 

AWS: In September, AWS rolled out BedRock, a gen AI-driven solution to improve speed and increase accuracy in detecting financial crime. Intuit and Nasdaq use the solution to fight financial crimes, according to the company’s website. 

NatWest is using AWS’ gen AI-driven tool, SageMaker, to provide its customers with personalized services, including savings, buying a home, education on money management and establishing or growing a business, according to a NatWest release. 

Google Cloud: In June, Google Cloud launched a money laundering fighting solution that uses machine learning and AI to track suspicious transactions. HSBC is among the first financial institutions to use the AI/AML solution, according to Google’s June 21 release.  

Microsoft Azure: In July, Microsoft launched its Azure AI Document Intelligence solution that uses AI to extract information from documents, according to the company’s July 18 release. Real estate company Emaar uses the solution for document processing, which can reduce its month-on-month processing costs by more than 50%, according to Microsoft’s website. 

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