Singapore's DBS Bank has signed an agreement with Amazon Web Services (AWS) in a bid to become more "fintech-like" and responsive to customer needs, expecting 50 percent of its compute workload to be in the cloud by 2018.
The agreement sees the bank move away from a traditional datacentre, with DBS saying its "early adoption" of the cloud when it comes to the financial sector will allow it to experiment in a digital way as well as deliver new applications quickly and securely.
Comparing the bank to the world's tech giants, DBS head of technology and operations David Gledhill said a transition to a hybrid cloud environment will allow the bank to make rapid changes of capacity and functionality.
"In today's fast-changing world, companies such as Amazon, Facebook, Google, and Netflix are widely acknowledged as leaders in innovation. What sets them apart is their ability to constantly experiment, automatically scale, and rapidly bring new features to market. They are able to do this in part by leveraging the flexibility provided by cloud technology," he said.
Initially, AWS will be used by DBS' Treasury and Markets business for the purpose of pricing and valuing financial instruments for risk management, with the bank saying such a task requires extensive computing power. Additionally, it will allow the bank to have a quick and cost-effective way of handling short-term surges in trading volumes, DBS said.
Previously, DBS CEO Piyush Gupta said that traditional financial services providers were facing increasing competition from fintech players and non-traditional players, which were aggressively targeting the financial services value chain.
"And they're doing things banks are not allowed to do. This is the reality today," Gupta said. "They're reimagining our world very differently from how we had imagined it."
He added that this had pushed the need for traditional players such as DBS to rethink the customers' journey and improve its service delivery. Organisations also would need to adopt a new mindset to fully transform its business model.
"The difference between [the likes of] Alibaba and a bank is the people, mindset ... [having the] flexibility and willingness to do things differently. The best way to do is to give people the tools to reimagine and develop [new products and services]."
In implementing the hybrid cloud, the bank said it has worked to ensure it meets the requirements of the Monetary Authority of Singapore's Technology Risk Management guidelines, establishing additional technology standards, internal approval toll gates, and data encryption standards that are cloud-specific.
In December, DBS Bank set aside SG$10 million to fund various initiatives to support the Singapore startup ecosystem, which included DBS-owned programs, collaborations with accelerators, and other startup activities. The startup fund built on the bank's financing scheme which aims to provide an alternative option for tech startups seeking capital in Singapore.