Macquarie Bank is hoping its adoption of Google’s Anthos service will minimise infrastructure-level distractions that could otherwise take time and focus away from delivering core financial services.
Chief digital officer Luis Uguina told the Google Cloud OnAir virtual summit that Anthos - and, more broadly, the bank’s platform-as-a-service it has built up over several years - ensured Macquarie could keep pace with customers’ banking demands.
The banking and financial services (BFS) division of Macquarie started hitting scale in its cloud migration mid-last year, about the same time as it started to use Anthos.
Anthos is described in marketing materials as an application modernisation and management platform, though essentially it’s a tool to manage containerised apps hosted on on-premises and cloud infrastructure.
Macquarie hasn’t said much about its use of Anthos since the middle of last year; in that context, Uguina’s commentary establishes a significant role for Anthos in the bank’s ongoing infrastructure management strategy.
“Our core business is financial services, and because it's financial services, the perfect scenario is one where we are laser-focused on delivering the best financial product - and where the database we are using, or if we are using containers or not, or the kind of communications - all those things should be for us a commodity,” Uguina said.
“For us, it’s not something that’s going to change the world in terms of how we deliver a credit card or a transaction account, or the way you’re able to search transactions..
“That's why for us, one of the things that we have in our pipeline is what is the best way of being laser-focused on financial products and not investing our time on Kubernetes, or changing the way we are managing containers, or how we are going to connect the database with the application server and the containers and the ports.
“We have really amazing engineers with amazing talent in the company that are working on that, but it's not our number one priority in terms of [our] core business.”
Uguina said that Macquarie sees Anthos as “basically the framework that is allowing us to be laser-focused in our core business.”
“What Anthos is providing is this framework where regardless if it’s a private, hybrid or a public cloud, we are going to be able to deliver our systems and our capacity in a seamless way,” he said.
“I don't know if in the future, in 10 years, we all are going to be using public cloud or we are going to be using private cloud or if it's going to be a mix of both, or maybe we are going to have something completely new [for infrastructure] that we don't even know today.
“But what I'm sure is, we have the right framework that will allow us to be moving workloads in a transparent way across all those different environments, and we are not spending a large amount of effort and talent on managing something that to be honest, there are better people in the market like Google doing.
“I think that is going to be really good for us.”
Macquarie BFS said earlier this year it now has a goal to have all its IT infrastructure delivered via the cloud in FY22.
Uguina said the bank’s move into cloud to date had enabled it to move much faster in delivering new digital capabilities.
When it ran IT infrastructure on-premises, scoping the amount of kit needed to meet projected customer take-up, and then provisioning it, was often a months-long effort, with no guarantee that the amount of gear provisioned was even necessary.
In the cloud world, provisioning happens in seconds and the consequences of having a new service or product miss take-up expectations is not nearly as problematic, with the bank able to scale up and down to meet demands.
Shaping up for open banking
That’s particularly helpful as the use of open banking - and the associated consumer data right for banking - starts to ramp up, after a July 2020 go-live.
Macquarie was an early mover on open banking, starting to set up the foundations for it way back in 2017.
But, Uguina is anticipating large changes in the demands being put on Macquarie Bank’s IT infrastructure as the use of federally-mandated open banking expands.
Whereas previously the bank was estimating how many times an actual customer might hit a particular service, it expects to soon see an exponential increase in requests, particularly once third parties like fintechs have a customer’s permission to poll bank systems for their data.
“Open banking is just putting a little bit more pressure on top of the existing [pressure in infrastructure],” Uguina said.
“What I mean is, we are no longer in control if maybe a third-party decides to connect 300 times per day into the bank to receive your data, or they are going to be retrieving the last two years of information from the bank.
“What that means is that the physical infrastructure and the way we were usually able to provide the information and the capacity is going to have a massive overload in terms of many different parties accessing the information at any time and retrieving or making transactions or queries that as a bank customer, [you would otherwise] not be doing everyday.
“It’s like extending or multiplying by two by three times the amount of customers that you have, and the online capabilities that you need to provide to everyone, so it's going to be a quite interesting challenge [to meet].”
Own product, not channel
Looking further into the future, Uguina predicted that banks would need to increasingly offer their products and services through channels owned by large technology companies.
While banks would still “own” their products - they would need to retain some level of control over the way money moved in order to meet regulatory obligations - Uguina predicted they would “not control the channel” through which consumers engaged with the banking service.
“It's not going to be a surprise if my kids are doing everything through Instagram or Facebook, and then when they need to send money, the bank is physically connected with this platform,” Uguina said.
“What is going to happen is in the same way that they send a message, they send money.
“I think sooner rather than later, we as banks will own the product, but we will not own the channel.
“And then you as a customer will have huge flexibility in order to decide through which channel you are going to be accessing your data or sending money.
“What is going to put this massive pressure, again, on the banking industry is how do we deliver those capabilities in a fully secure environment? How do we send money in a safe way through Facebook? How do we enable bank balance checks in a safe way through TikTok, or a similar application?
“This is the probably the next challenge that we will face as a banking industry.”
