Among the announcements from this year’s Temenos Community Forum in Copenhagen was an expansion of Temenos’ software-as-a-service (SaaS) offering on Amazon Web Services (AWS).
Temenos has added digital banking and payments to its existing core banking SaaS on AWS, giving banks more choice in how they modernise – whether that means tackling one part of the stack or taking on a broader programme.
Bank modernisation is not as simple as swapping out one system for another. Core systems, payments, customer channels, resilience, security, data residency and regulation all come into it. Banks may know they need to move, but getting from ambition to execution is where things often get more complicated.
In this week’s ‘Five Minutes With…’, Fintechly speaks to Lisa Lewison, head of global financial services partner success at AWS, about where cloud projects still stall, how partners fit into bank modernisation, and what banks need to think about as AI moves further into the business.
Can you tell us about yourself and what brought you to this point in your career?
I lead a function called partner success within global financial services at AWS. AWS has a very extensive partner network of global systems integrators and independent software vendors, or ISVs, that we work with to support customers at all stages of their cloud journey. My team works with those partners to support our customers.
I have been at AWS for nearly eight years now. I spent the first five years working within AWS Marketplace, looking at how we evolved the Marketplace service to become a truly international service and support a more localised experience for customers.
That included looking at how we support local currency transactions through Marketplace, and how we enable customers to have local taxation and invoicing when they consume Marketplace. The focus was on meeting customers where they were and how they wanted to do business.
Before I joined AWS, I spent a lot of my career looking at technology cost optimisation: how organisations optimise technology spend, both for internal spend and in terms of pricing for outsourcing and service delivery. I also spent nearly 10 years at AXA across different parts of the organisation in Australia and then the UK.
What problem or opportunity are you most focused on right now?
It is about how we help customers envisage, commit to and execute on a large-scale cloud migration journey.
Because my team focuses on how we work with partners, it is really about finding the right partners to unlock that for customers. When financial institutions migrate to cloud, most will use not one partner, but many, both to deliver the migration and to support how they use AWS services.
Partners such as Temenos are important because most customers will buy rather than build significant parts of their portfolio. Temenos provides the banking technology and the support for that technology. They have been in operation for more than 30 years, so they bring a significant amount of banking expertise. AWS is not a banking platform provider; Temenos provides that banking platform on top of our cloud services.
We have seen a few themes emerge significantly over the last few years. The first is customer experience transformation. With technology advances and the emergence of challenger banks such as Monzo, customers expect a different experience from their banks than they did when they were going into branches 20 years ago. Many customers would now see it as a failure on the part of their bank if they had to go into a branch to complete a basic transaction.
There is also a strong theme around the need to modernise because legacy technology will not support banks or financial institutions in keeping pace with customer demand, regulation and staying relevant in the market. If you think about mainframes that have been in existence for 30-plus years, in some instances that technology is now outdated, and support for it is also getting thin on the ground.
Payments are part of that. There has been a convergence of customer expectations around instant payment experiences and changes in regulation around how payments are governed and how quickly banks have to process transactions. Both have brought payments modernisation to the fore.
What do you think deserves more attention than it is getting in your part of the industry?
The need to upskill or cross-skill very significant numbers of employees in technology tooling. And that is not just technology employees.
Generative AI has pushed technology into the business in a way that we have not seen so significantly before. It means it is not just a challenge for technology functions within our customers to understand the availability and use of those tools. It is an organisation-wide challenge.
There is also a people aspect to cloud migration. Large financial institutions may have thousands of people running banking operations and working with on-premise infrastructure. To modernise that and move to cloud is not just a technology challenge. It becomes a people challenge as well.
That means people developing skill sets around building in the cloud, developing skill sets around using generative AI technology that is launching and changing incredibly fast, and changing the way banks organise themselves.
Leadership commitment is part of that too. We see leadership changes in banks, and that can mean customers embark on a transformation journey and then hit a pause point. Banking is a highly regulated industry, so transformation does not happen as fast as it may happen in other industries. Where customers stop and start that modernisation journey, that can create a risk to market position.
What do you think people still misunderstand about your part of the industry?
It is probably the notion that cloud transformation is technology and technology only. It really is a whole-business change.
Financial institutions recognise that they need to move. I saw a data point that only 25 per cent have articulated a comprehensive strategy around cloud migration, so I think the need is universally recognised, but it is not universally reflected in comprehensive strategies to move.
It is less about uncertainty over what regulators will do and more about uncertainty over how banks want to tackle some of the challenges around legacy architecture and legacy infrastructure. The trend in regulation, as we see it, is that there is more regulatory pressure for customers to demonstrate the levels of security and resiliency they can achieve in the cloud than there is regulatory pressure not to move.
Data residency is part of those conversations. For the most part, we believe our customers can maintain their data residency requirements on our commercial cloud. Customers can control where their data sits and have full data lineage by architecting the way they use the cloud.
The European Sovereign Cloud is a separate cloud partition, managed by EU citizens. We are seeing more indication of intent in areas such as the public sector.
What do you expect to rise up the agenda over the next year?
AI governance is already a significant focus because customers are looking to scale out use of AI very rapidly. The governance needed to support that is becoming a major requirement.
I would couple that with how customers manage AI commercially. We are talking about very new technology, with new pricing models. A lot of model providers are launching new pricing structures rapidly as they see huge increases in demand for their services.
There is a parallel with the move from physical infrastructure to cloud. Organisations had to rethink how they did cost forecasting, budgeting and commercial models around using cloud. That challenge will repeat itself with AI and generative AI, but it will have to be dealt with in a much shorter time frame because demand to use the technology will not wait.
We are seeing three main areas where there are significant uses and efficiency gains with AI. The first is end-customer experience, such as digital onboarding for banks and claims processing for insurance. The second is user productivity: how it makes employees more efficient by taking away admin processing or steps in admin tasks, using things like internal chatbots.
The third is developer productivity. We are seeing significant changes and efficiency gains in code analysis, code rewrite and new code development, including developer tooling that enables natural language prompts to generate code and reduces development lifecycles considerably.
Bonus question: What’s the one question about AWS we should have asked, and what’s your answer?
Oh, that one has stumped me slightly! I suppose the message I would come back to is that, with generative AI, customers need a robust strategy for how they are going to move to cloud.
Any organisation that has not developed that already risks being left behind.
