Wells Fargo embraces Multicloud with Microsoft, Google Deals

Van Beurden declined to disclose how much the bank spends on its upgrade to improve its digital infrastructure.

Recently, Wells Fargo has had problems with outages that have highlighted the technological flaws of outdated systems. The initiative in the cloud will allow the company’s technology team to build and deploy applications more quickly, which will benefit the bank’s customers, said Van Beurden, who joined the company in 2019 and was previously information director. of consumer and community banking from JPMorgan Chase & Co.

Wells Fargo’s effort to modernize its digital infrastructure also includes a plan to downsize its own data centers and move some of its applications to undisclosed third-party data center providers, Van Beurden said.

Cloud utilities allow software engineers to focus on creating and deploying new applications and services quickly, using the latest software tools, without the need to supply hardware when more computing power is needed.

Wells Fargo competes against other banks that are adopting the cloud and moving away from their own private data centers. Morgan Stanley, for example, in June said it will move some of its core workloads to Microsoft’s Azure cloud platform. Last year, Capital One Financial Corp. changed its data, applications, and information technology systems to Amazon Web Services.

According to a May report by Boston Consulting Group, approximately two-thirds of companies at the enterprise level use multiple clouds. By 2025, up to 60% of consumer-oriented applications and more than 30% of core business applications will run in public clouds, according to the consultancy.

Banks, however, have moved into the cloud more slowly than other industries in part due to regulatory barriers and security issues. The banking industry still relies on significant amounts of legacy technology, making the public cloud a major and complex enterprise, said Benjamin Rehberg, managing director and senior partner at Boston Consulting Group, which leads technology practice in North America. North. “It’s hard for banks to do that,” he said.

Wells Fargo plans to use Microsoft’s Azure as its main public cloud provider, with Google Cloud providing “business-critical” services, including those related to artificial intelligence, Van Beurden said. Microsoft’s Azure cloud services are expected to help the bank better assess risk by conducting multiple simultaneous simulations on cost modeling interest rates for capital markets, Deb Cupp said. president of Microsoft USA

Vendors were chosen because they are industry-leading cloud service providers with a strong track record in the financial services industry, Van Beurden said. The company does not rely solely on a public cloud provider because it wants to manage its risk in the cloud and each provider has different competencies, he said.

Wells Fargo’s information technology team could spend less time correcting software bugs and overseeing IT operations as part of the shift to cloud utilities, which automatically perform some of these functions, Van said. Beurden. The risk of outages can be reduced due to the ability of the cloud to automatically detect when some applications start to fail and fix problems automatically, he said. “Of course, that’s one of the reasons for doing so,” he said.

The company plans to hire more cloud security engineers as a result of the initiative, he said. “He is bold and aggressive in his vision, [and] calculated, deliberate and focused on execution, ”he said.

Write to Sara Castellanos to [email protected]