We’re no longer debating the value of the cloud. Berlin-based cybersecurity and digital trends expert Ludmila Morozova-Buss made the call a few years back: “With cloud computing, it is no longer a question of if, but rather when and how.” Since then, we’ve seen entire workforces shift to hybrid and remote work, customers intensify their expectations for digital experiences, and, more recently, AI capabilities proliferate and intensify to a degree almost no one expected.
Organizations have an increasingly urgent imperative to migrate their processes and data to the cloud—a prospect that’s equal parts exciting and intimidating. Because for all the prognostication and publicity surrounding this brave new world, there aren’t a lot of playbooks.
That is, unless you look at the instructive—and perhaps surprising—digital transformation of one of North America’s largest banks, a 205-year-old operation with nearly 47,000 employees and more than 12 million customers globally. BMO Financial Group is in the middle of a major multi-year migration, having integrated many software-as-a-service solutions, leveraging new cloud-native capabilities to better crunch data, and moving many of its applications—including its APIs—to the cloud, among other things. Cloud technology is now enabling several key corporate initiatives, such as the integration of the newly-acquired Bank of the West.
This is hardly a simple matter of flipping a switch—there aren’t many organizations larger, more risk aware, or more complex than a major financial institution. But by establishing a business-first strategy and taking a disciplined approach to its implementation, BMO is confidently easing into a new identity as a digital-first, future-ready bank. Here are five things it’s doing to get there.
Define the opportunity
For a company embarking on a cloud journey, the options are dizzying. Should the approach be cloud-based, cloud-enabled, or cloud-native? Is the best model infrastructure-as-a-service, software-as-a-service, platform-as-a-service, or serverless? Is the goal migration (that is, a so-called “lift and shift” of existing functions to the cloud environment), modernization (that is, refactoring or rearchitecting apps to harness cloud capabilities), or both?
BMO developed its cloud strategy by filtering all these choices through a specific lens: What technological model could deliver the scalability, innovation, and speed required to keep up with constantly changing customer needs? “It’s not that banks have to get on the cloud, necessarily—banks can store their data any way they wish. It’s that banks are going to need to get faster, and cloud is a major way to do that,” explains Raphael Schapiro, BMO’s Chief Technology and Operations Strategy and Transformation Officer.
BMO split the work between two service providers: Microsoft for productivity tools (such as Teams for communication, and Azure for analytics work) and AWS for the development of applications. The bank had some experience using cloud-based programs with both vendors, and working with more than one created latitude to adjust as things evolved. Most importantly, the technology offered by each was deemed the best available to help the bank achieve its goals.
Win hearts and minds
There’s a common misconception that cloud transition is purely a tech thing, to be led, managed, and generally completely handled by IT. In reality, a change of this magnitude requires adjustments to how people work, the processes they follow, and, often, the very culture of the organization. Organizations—especially large ones—can expect some resistance to all the different ways of doing things that come with going cloud, especially those who adhere to the “it’s not broke, don’t fix it” school of thought.
“Companies that are the most successful don’t think of this as a technology transformation. They think of it as a business transformation,” says John Kain, who, as Head of Financial Services Market Development at AWS in New York, works on cloud migrations with very large institutions. Transitionig to the cloud carries implications far beyond the silo of IT: to finance (e.g. a formerly fixed cost becoming variable), compliance, governance, product development, sales, HR, and beyond. Executive sponsors who believe in and can communicate the value are important, Kain advises, as are robust training processes. But in his experience, people are won over when they can quickly see the positive effects in their day-to-day work. “Early on, you have to pick some applications that are meaningful from a customer experience or business outcome perspective,” he says. “If you just sort of experiment with things whose success nobody really cares about, you don’t get the organization moving around it.”
At BMO, one early project was to migrate some high-intensity computational tasks to a cloud-native ecosystem. By leveraging the virtually infinite capacity of the cloud, and by adjusting the timing to conduct the calculations in bursts, extremely complicated monthly credit calculations that once took a day and a half on-premises could be done in 90 minutes. An exponential improvement noticed by even the most skeptical naysayers.
Manage the risks
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While cloud services have been mainstream for more than a decade, the idea of data and applications living somewhere other than a company’s physical servers can still make leaders skittish. And while caution is appropriate, panic is not, according to Marc Lijour, Vice-President of Capacity Building and Innovation at the Information and Communications Technology Council, an Ottawa-based not-for-profit consultancy focused on the digital economy.
“Cloud technology is not inherently more risky or less risky than other types,” he says. Lijour uses the analogy of Teslas vs. traditional cars: While many people consider the electric car riskier—largely because it employs new or unfamiliar technologies—the reality is that it’s no more prone to glitches and failures than the gas-guzzler: “The risks are just different. It comes down to how you manage them.”
“Security has to be a shared responsibility,” explains Henrik Gütle, the Toronto-based Azure Product Go-To-Market Leader for North America at Microsoft. While a vendor should vigilantly protect its data centres and proactively combat threats, there’s an onus on the organization whose data and processes depend on security to have its own house in order, too. “It’s about making sure that their environment is set up properly, and that it’s running in accordance with regulatory requirements, and so forth.”
As a Canadian bank, BMO had a baked-in advantage in vigilance—and a baked-in concern to not compromise its risk position. This became a credo of the migration: Speed and agility must never eclipse nor compromise data or process security. At the outset, the tech teams within BMO engaged with their colleagues in privacy, procurement, legal, risk, and compliance to make sure the approach would stand up to the highest security standards. The first production-like workflow built for the cloud took the company a year and a half. It wasn’t quick, but it created a strong blueprint that would enable quick and safe work later. “We wanted to create a sound and robust and secure platform from the get-go,” says Lawrence Wan, BMO’s Chief Architect and Innovation Officer.
Stay disciplined
Each of the varied departments and teams under the vast BMO umbrella has unique needs—ranging from sophisticated data analysis, to internal messaging, to the banking app on your phone. Once the potential of the cloud became clear, stakeholders were eager to get their project at the top of the queue.
“There are millions of things we can choose to do,” explains BMO’s Graeme Whittington, Chief Engineer and Head of Platforms. “Instead of taking the list of everything that everyone wants to do, plotting it on a scattergram, and figuring it out that way, we try to make use of the capabilities of the cloud to the best value of what our customers or our business need. And we focus on that.”
To date, the priority has been data (migrating billions of data points) and security (keeping it all airtight), but the organization is also seeing improvements to its speed of delivering new solutions, the ease of partnering with external developers, and the reliability and seamlessness of user experience.
Accelerate the momentum
There is no end state in the cloud; the options are, almost by definition, endless. It’s easy for a company—especially one big on discipline—to get stuck in the groove of what it’s doing and miss opportunities related to what it could be doing. A recent report from Gartner identified this stasis as a common problem among cloud adopters, and detailed several ways to avoid it, such as maxing out existing cloud capabilities, developing processes to iterate, and, perhaps most importantly, developing goals that “favour customer centricity.”
This thinking is helping BMO accelerate its transition. Ultimately, if the bank’s cloud evolution is a flywheel meant to bolster its business—improving speed-to-market, innovation, collaboration, and talent development—a prioritization of customer needs is its axle. “The advancements we’ve made with the cloud bring us many benefits,” affirms Brett Pitts, BMO’s Head of North American Treasury and Payment Solutions. “But most importantly, it enables us to meet our customers’ needs and expectations, faster.”
This content was paid for and directed by BMO Financial Group and was produced independently of The Logic’s newsroom in consultation with the advertiser. You can read our policies on advertising, sponsorships and partnerships here.
