'Democracy' in the banking sector

THE rise of the cloud has "democratised technology" across entire industries, said Ulku Rowe, technical director of financial services at Google Cloud.

"Whether you're a small, nimble startup that's just set up, or you're a financial institution that's been operating around the world for a hundred years, you have the same access, the same technology resources," she said.

"Now, your fintechs and startups can use that technology to disrupt traditional business models, fragment the market, go after low-margin businesses. At the same time, the big financial institutions can use the same technology to transform their businesses."

Cloud has been, in her words, "a breath of fresh air" for financial institutions trying to reinvent themselves in the wake of the global financial crisis, as they grapple with a fall in money-making transaction fees.

"They're really defining themselves both by taking their legacy infrastructure and modernising it, and then creating these new ways of interacting with their customers. So there's this massive fuelling of innovation. You see it in the startups, but you see it in the big names, too."

New York-based Ms Rowe, who works in the office of the chief technology officer, handles Google's cloud and machine learning capabilities for the financial sector. Clients include banks such as HSBC, ANZ Bank, BNP Paribas Fortis and Citibank, as well as PayPal and Norwegian white-label mobile payments platform Auka, and Brazilian insurance giant SulAmerica.

She told The Business Times that she sees the changes in the industry taking place across different sub-sectors in the financial sector. For example, retail banks are looking for data insights to customise customer experiences, she noted, while capital markets firms are trying to improve risk management, such as using machine learning to better understand portfolios.

"In the hedge fund space, they're trying to come up with better training strategies, understanding market data. When you look at it holistically, it's all about modernisation, transparency, intimacy with clients. It's using new technology to do things they couldn't do on premises," she added.

Ms Rowe stressed that information security - a perennial concern for financial firms - could even be more robust off-site than when data is stored by a client institution itself. "We've been protecting some of the world's largest Internet properties, like Gmail, YouTube and some others, so we've learnt a lot from that experience.

"And all of that technical expertise, we now provide on our Google Cloud offering. A lot of investments that we have done into our security infrastructure, we now make available to our customers."

Google Cloud has described itself as "a billion-dollar-per-quarter business", with more than 15,000 cloud artificial intelligence clients. Google parent Alphabet posted second-quarter "other revenues" of US$4.4 billion for the three months to June 30, which includes Google Cloud products as well as turnover from the Google Play app store and hardware sales.