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Google Cloud Lighthouse Event for the Financial Services

Google Cloud Lighthouse Event for the Financial Services

Lee Boonstra

October 25, 2017

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  1. LightHouse​ ​Event​ ​​Financial​ ​Services​ ​Industry A​ ​disrupted​ ​world Preparing​ ​for​

    ​next​ ​generation​ ​financial​ ​services Amsterdam​ ​October​ ​13,​ ​2017 Where​ ​other​ ​industries​ ​were​ ​quick​ ​to​ ​embrace​ ​cloud​ ​technology, Financial​ ​Services,​ ​a​ ​traditionally​ ​IT-heavy​ ​sector,​ ​has​ ​been​ ​struggling with​ ​the​ ​complexities​ ​of​ ​security​ ​and​ ​privacy​ ​regulations.​ ​This​ ​caused​ ​a slowdown​ ​in​ ​cloud​ ​adoption​ ​and​ ​created​ ​a​ ​barrier​ ​for​ ​innovation.​ ​The good​ ​news​ ​is:​ ​times​ ​are​ ​changing. By the end of next year most banks and insurers will have implemented one or more cloud solutions to support production workloads. Financial Services are increasingly picking up the pace of cloud adoption. But the work at hand is still momentous. Google facilitated an open discussion about innovations, cloud strategies and challenges in the Financial Services​ ​industry. ‘By​ ​ the​ ​ end​ ​ of​ ​ 2018,​ ​ 65%​ ​ of​ ​ the​ ​ banks​ ​ and​ ​ insurers​ ​ will​ ​ have​ ​ implemented cloud​ ​ solutions​ ​ to​ ​ support​ ​ production​ ​ workloads​ ​ and​ ​ services’​ ​ ​ (SOURCE:​ ​​IDC​) THE​ ​GOOGLE​ ​CLOUD​ ​FINANCIAL​ ​SERVICES​ ​TEAM LEE​ ​BOONSTRA,​ ​PETRA​ ​STOJANOVIC,​ ​JENNIFER​ ​SKAFF

    well-attended event is kicked off by Petra Stojanovic, team lead of the Google’s Finance team. She explains the interested crowd how priorities shift from efficiency and profitability to innovation and speed. How to make optimal use of the data that banks have in abundance? How to attract talented employees? How to retain customers? All these questions lead inevitably to the central theme; how can the banks and insurers innovate while keeping up with the increasing demands of security and compliancy​ ​regulations? Stojanovic is crystal clear: a hybrid cloud that combines public and existing on-prem solutions can enable financial services to make the transition, especially when paired with a strong support of Open Source technology. This is what the Google Cloud delivers. Stojanovic uses the analogy of Lego-bricks to support her argument. You can buy Lego either in pre-configured theme packages or as separate bricks in all imaginable shapes and colors. Google delivers the bricks, but thinks solutions. The bricks consist of a portfolio of over 60 products and services, ranging from core computing to storage and networking,​ ​and​ ​from​ ​big​ ​data​ ​to​ ​identity and security components. Together they create complex and unique solutions​ ​that​ ​enable​ ​banks​ ​and​ ​insurances​ ​to​ ​innovate. The heart of today’s innovation is ​machine learning​ . Fraud-detection systems, Risk Modeling, Data Insight, Call Center Automation and Chatbot technology are all examples of Financial Services solutions that rely heavily on Artificial Intelligence (AI). AI technology is at the core of all these propositions and is battle-tested in Google’s own products and services​ ​for​ ​over​ ​a​ ​decade. Concerns of privacy and security legislation have however been a major reason for banks to be hesitant in adopting the public cloud. This is changing rapidly. The Dutch financial regulator; De Nederlandsche Bank (DNB) took on a primary role in certifying Google’s Cloud Contracts. Customers can rely on their judgement to trust the Google Cloud​ ​just​ ​like​ ​other​ ​public​ ​cloud​ ​providers.

    ‘The​ ​ AI-first​ ​ principle​ ​ drives​ ​ all​ ​ Google’s​ ​ solutions.​ ​ Delivered over​ ​ a​ ​ superfast​ ​ infrastructure​ ​ with​ ​ maximum​ ​ flexibility.’ Lee​ ​Boonstra Best Global Network Infrastructure. ​Google owns the largest public cloud network on the globe. Stretching over 100k+ miles of fiber cable under the oceans, it delivers a 10x faster connection than normal internet. ​‘There are over 100 points of access, so you can join virtually anywhere​ ​ to​ ​ enjoy​ ​ Google’​ ​ superfast​ ​ infrastructure,’​ ​ ​ adds​ ​Boonstra. Full Control over resources and usage. Any large enterprise needs provisions for multiple access levels but also full control over the use of resources. The Google Cloud fully supports these enterprise needs - on contractual​ ​level​ ​but​ ​also​ ​in​ ​the​ ​product​ ​user-interface. Flexible Cloud Models. ​Whether you want full control thru a IAAS model (in Google terms; Compute Engine) or PAAS (fully managed by Google, App Engine) or anything in between, everything is possible. You can use the GCP Decision Tree to choose the right solution for your specific​ ​requirements. THE​ ​CONSULTANTS’​ ​PERSPECTIVE AD​ ​VAN​ ​DER​ ​GRAAFF,​​ ​​DIRECTOR​​ ​​PWC​ ​FINANCIAL​ ​SERVICES The next speaker is Ad van der Graaff, director at PWC and consultant for Financial Services Technology. His message leaves no room for doubt; banks cannot any longer ignore the immense challenges they are facing. At the heart of these challenges are demographics. The millennial generation will expect from financial institutions the same level of service they are used to in their online world. Banks therefore have to rethink their function and focus. Van der Graaff sums up the current banking functions and interactively discusses with the audience​ ​which​ ​of​ ​these​ ​will​ ​or​ ​will​ ​not​ ​survive​ ​the​ ​next​ ​generation. ‘The millennials are digital natives. They’d rather go to the dentist than visit a bank. How to respond to the needs of this generation?’
  4. Ad​ ​van​ ​der​ ​Graaff The change that is required is

    massive and impacts people and systems who easily become inhibitors of change. Banks will need to work simultaneously on creating effective teams, fast automation and a modular​ ​architecture​ ​to​ ​be​ ​able​ ​to​ ​make​ ​this​ ​transition. Public Cloud neatly fits these requirements. Cloud is not just IAAS. The ready-made that are available make the process much faster. On a question from the audience on how much time such a radical transition should take, Van der Graaff answers: ​‘It is an iterative process. You can start within six weeks, but the complete transformation might​ ​ take​ ​ up​ ​ till​ ​ ten​ ​ years.’ USE​ ​CASE:​ ​MACHINE​ ​LEARNING​ ​IN​ ​PRACTICE FRANK​ ​VAN​ ​DER​ ​DONK,​​ ​​DIRECTOR​​ ​​SCHADEGARANT Not only banks, also insurers struggle with innovation. Frank van Donk, Director of Schadegarant, -an organization that routes and controls the car repair chain- faced an interesting question. How to maintain the quality of repairs in the face of the incredible speed of innovation in the automotive industry? It is the nightmare scenario of every repair shop: a just repaired car causes an accident because the sensors or another electronic device are not properly​ ​handled​ ​by​ ​the​ ​technician. Up till recently, car repairs were filtered and validated based on a number of hard-coded business rules. For example; an impact at the front should not result in the replacement of a back light. But as cars are quickly evolving into high tech devices, hard-coded rules just won’t do. Making manual updates to the business rules has become impossible. Schadegarant contracted Xomnia to solve this problem. Xomnia, represented by William van Lith, explains how they replaced the inflexible system by a data-driven rule engine that taps into the large existing body of data. Using machine learning, it analyzes all earlier accidents with similar characteristics, like car type, model and speed at impact. It is now able to detect anomalies in a split second. This artificial intelligence solution runs on the Google Cloud Platform and will soon include spare parts damage info, climate information and deep learning from images, so that chances of getting into an accident due to​ ​repair​ ​mistakes​ ​will​ ​be​ ​reduced​ ​to​ ​a​ ​minimal!

    are​ ​ a​ ​ technology​ ​ company with​ ​ a​ ​ banking​ ​ license.’ Quote​ ​of​ ​​Rolf​ ​Hamers​ ​​CEO​ ​ING A​ ​lively​ ​Q&A​ ​​with​ ​ING’s​ ​Vinoth​ ​Roman​ ​follows. Stojanovic​:​ ​​‘How​ ​ do​ ​ the​ ​ traditional​ ​ banks​ ​ differ​ ​ from​ ​ FinTech?’ Raman​: ‘Although Fintech is cool and uses the newest technologies, they don’t have the trust we build over many years. But how to embrace the latest technology to provide better services? For that we have​ ​to​ ​improve​ ​our​ ​current​ ​service​ ​and​ ​think​ ​beyond​ ​banking.’ Stojanovic​: ​‘Can you give us an example of what you are looking at, and​ ​ what​ ​ the​ ​ hurdles​ ​ are?’ Raman​: ‘Like Google, ING also believes that AI is a crucial enabler. AI can be used for many services, like chatbot our Marie in Belgium. Chatbot technology is not yet fully developed, but our position is that you can’t wait. You need to get experience and learn from mistakes. For example, sometimes Marie answers too quickly. This irritates our customers. So we must make her polite! But on the other hand, we found out that people don’t want the bot to be too ‘humanlike.’ They prefer to know that they are talking to a machine, so being transparent is​ ​crucial.’ Stojanovic​:​ ​​‘How​ ​ did​ ​ you​ ​ go​ ​ about​ ​ the​ ​ regulations?’ Raman​: ‘With respect to privacy and security, there are always three layers to consider. The first is: can we trust the technology. Is it mature enough? You should also consider if your own organization is ready to adopt it. Do they understand its implications and can they deal with the technical and organizational changes they require? And third and most importantly, do your customers trust the technology? You can only​ ​find​ ​out​ ​by​ ​doing,​ ​not​ ​by​ ​waiting!

    ​INTEL Derache takes the audience to the future of computing, looking to the horizon​ ​of​ ​next​ ​year,​ ​2022​ ​and​ ​2036. ‘We​ ​ are​ ​ moving​ ​ toward​ ​ a​ ​ world where​ ​ the​ ​ boundary​ ​ between digital​ ​ and​ ​ physical​ ​ is​ ​ eroding, computing​ ​ is​ ​ truly​ ​ mobile​ ​ and ubiquitous,​ ​ and​ ​ everything​ ​ is smart​ ​ and​ ​ connected.’ Stijn​ ​Derache​ ​​Account​ ​Executive Financial​ ​Services,​ ​Intel Intel’s Saffron technology is at the forefront of accelerating AI. It uses a human, brain-like structure. ​‘Until now we have been going the other way, that is in order to understand the brain we have used the computer as a model for it. Perhaps it is time reverse this reasoning to understand where we should go with the computer, we should look to the brain for some clues,’ said co-founder of INtel, Dr Robert Noyce already in 1984. Now is the time that this prophecy comes true. Saffron is a Natural Intelligence Platform that learns, adapts, anticipates and reacts very similar to the human mind. The technology is be available on the Google Cloud Platform and Open Source frameworks like Kubernetes and Tenserflow are optimized for Intel. In this way, customers​ ​enjoy​ ​best​ ​of​ ​both​ ​worlds. DEMO’S Hadoop​ ​in​ ​the​ ​Cloud​ ​(Dataproc)​ ​​Robert​ ​Saxby,​ ​Google Apigee​,​ ​Kevin​ ​Bouwmeester,​ ​Google Machine​ ​Learning​​ ​Nicolas​ ​Deruytter,​ ​Datatonic Machine​ ​Learning​​ ​Felipe​ ​Chies,​ ​Intel Google​ ​Home​​ ​Lee​ ​Boonstra,​ ​Google www.google.com/cloud