The cloud represents a strategic tool to enable digital transformation for financial institutions
As the banking and other regulated industry continues to shift toward a digital-first approach, financial entities are eager to use the benefits of digital disruption. Lots of innovation is happening, with new technologies emerging in areas such as data and AI, payments, cybersecurity and risk management, to name a few. Most of these new technologies are born-in-cloud. Banks want to tap into these new innovations. This shift is a significant change in their business models, moving from a capital expenditure approach to an operational expenditure approach, allowing financial organizations to focus on their primary business. However, the transformation from traditional on-prem environments to a public cloud PaaS or SaaS model presents significant cybersecurity, risk, and regulatory concerns that continue to impede progress.
Balancing innovation, compliance, risk and market dynamics is a challenge
While many organizations recognize the vast pool of innovations that public cloud platforms offer, financially regulated clients remain accustomed to the level of control and visibility provided by on-prem environments. Despite the potential benefits, cybersecurity remains the primary concern with public cloud adoption. The average cost of any mega-breach is an astonishing $400 plus million, with misconfigured cloud as a leading attack vector. This leaves many organizations hesitant to make the transition, fearing they will lose the control and security they have with their on-prem environments. The banking industry’s continued shift toward a digital-first approach is encouraging. However, financial organizations must carefully consider the risks that are associated with public cloud adoption and ensure that they have the proper security measures in place before making the transition.
The traditional approach for banks and ISV application onboarding involves a review process, which consists of several key items like the following:
- A third-party architecture review, where the ISV needs to have an architecture document describing how they are deploying into the cloud and how it is secure.
- A third-party risk management review, where the ISV needs to describe how it is complying to required controls.
- A third-party investment review, where the ISV provides a bill of material showing what and how services are being used to meet compliance requirements, along with price points.
The ISV is expected to be prepared for all these reviews and the overall onboarding lifecycle through this process takes more than 24 months today.
Why a FS Cloud and FS Validation Program?
IBM has created the solution for this problem with its Financial Services Cloud offering, and its ISV Financial Services validation program, which is designed to de-risk the partner ecosystem for clients. This help accelerating continuous integration and continuous delivery on the cloud. This program ensures that the new innovations coming out of these ISVs are validated, tested, and ready to be deployed in a secure and compliant manner. With IBM’s ISV Validation program, banks can confidently adopt new innovative offerings on cloud and stay ahead in the innovation race.
Ensuring that the success of a cloud transformation journey requires a combination of modern governance, standard control framework, and automation. There are different industry frameworks available to secure and provide compliance posture. Continuous compliance that is aligned to an industry framework, informed by an industry coalition that is composed of representation from key banks worldwide and other compliance bodies, is essential. IBM Cloud Framework for Financial services is uniquely positioned for that, meeting all these requirements.
IBM Cloud for Financial Services® is a secure cloud platform that is designed to reduce risk for clients by providing a high level of visibility, control, regulatory compliance, and the best-of-breed security. It allows financial institutions to accelerate innovation, unlock new revenue opportunities, and reduce compliance costs by providing access to pre-validated partners and solutions that conform to financial services security and controls. The platform also offers risk management and compliance automation, continuous monitoring, and audit reporting capabilities, as well as on-demand visibility for clients, auditors, and regulators.
Our mission is to help ISVs adapt to the cloud and SaaS models and prepare ISVs to meet the security standards and compliance requirements necessary to do business with financial institutions on cloud. Our process brings the compliance and onboarding cycle time down to less than 6 months, a significant improvement. Through this process, we are creating an ecosystem of ISVs that are validated by IBM Cloud for Financial Services, providing customers with a trusted and reliable network of vendors.
Streamlined process and tooling
IBM® has created a well-defined process and various tools, technologies and automation to assist ISVs as part of the validation program. We offer an integrated onboarding platform that ensures a smooth and uninterrupted experience. This platform serves as a centralized hub, guiding ISVs throughout the entire program, starting from initial engagements and leading up to the validation of final controls. The onboarding platform navigates the ISV through following steps:
Orientation and education
The platform provides a catalog of self-paced courses that help you become familiar with the processes and tools that are used during the IBM Cloud for Financial Services onboarding and validation. The self-paced format allows you to learn at your own pace and on your own schedule.
ISV Controls analysis
The ISV Controls Analysis serves as an initial assessment of an organization’s security and risk posture, laying the groundwork for IBM to plan the necessary onboarding activities.
Architecture assessment
An architecture assessment evaluates the architecture of an ISV’s cloud environment. The assessment is designed to help ISVs identify gaps in their cloud architecture and recommend best practices to enhance the compliance and governance of their cloud environment.
Deployment planning
Deployment of ISV application in a secure environment and manage their workloads on IBM Cloud®. This step is designed to meet the security and compliance requirements of organizations. Providing a comprehensive set of security controls and services to help protect customer data and applications, meeting the suitable secure architecture requirements.
Security Assessment
The security assessment is a process of evaluating the security controls of the proposed business processes against a set of enhanced, industry-specific, control requirements in the IBM Cloud for Financial Services Framework. The process helps to identify vulnerabilities, threats, and risks that might compromise the security of a system and allows for the implementation of appropriate security measures to address those issues.
Professional guidance by IBM and KPMG teams
IBM team provides guidance and assets to help accelerate the onboarding process in a shared trusted model. We also assist ISVs with deploying and testing their applications on the IBM Cloud for Financial Services approved architecture. We work with ISVs throughout the controls assessment process to help their application achieve the IBM Cloud for Financial Services validated status. Our goal is to ensure that ISVs meet our rigorous standards and comply with industry regulations. We are also partnering with KPMG, an industry leader in the security and regulatory compliance domain to add value to the ISVs and clients.
Time to revenue and cost savings
This process enables the ISV to be ready and go to market in less than eight weeks reducing the overall time to market and overall cost of onboarding for any end clients. Additional resources here.
Benefits of partnering with IBM?
As an ISV, you have access to our extensive financial institution clients. Our cloud is trusted by 92 of the top 100 banks, giving you a significant advantage in the industry.
Co-create with IBM team of expert architects and developers to take your solutions to the next level with leading-edge capabilities.
Partnering with us means you can elevate your Go-To-Market strategy through co-selling. We can help you tap into our vast sales channels, incentive programs, client relationships, and industry expertise.
You have access to our technical services, and cloud credits, as an investment in your innovation.
Our marketplaces, like the IBM Cloud® Catalog and Red Hat Marketplace, offer you an excellent opportunity to sell your products and services to a wider audience.
Finally, our marketing and direct investments in your marketing, can generate demand and help you reach your target audience effectively.
See IBM Cloud Framework for Financial Services
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