Standard Chartered Bank and Microsoft have announced a three-year strategic partnership to accelerate the bank’s digital transformation through a cloud-first strategy. This partnership marks a milestone for Standard Chartered in making its vision for virtual banking, next-generation payments, open banking and banking-as-a-service a reality. Leveraging Azure as a preferred cloud platform, the companies will also co-innovate in open banking and real-time payments to help the bank unlock new banking experiences for clients.

Embarking on a cloud-first strategy

As part of its digital transformation, Standard Chartered will adopt a multi-cloud approach, where significant applications, including its core banking and trading systems and new digital ventures such as virtual banking and banking as-a-service, will be cloud-based by 2025, subject to regulatory approvals. The bank will also adopt a cloud-first principle for all new software developments and major enhancements.

As technology reshapes the banking industry, Standard Chartered says it recognises that a cloud-first strategy is critical to the bank’s ambition to make banking simpler, faster and more convenient. By being digital-first, the bank hopes to be able to meet the demand for seamless banking virtually anytime, anywhere, and make banking more accessible to people across its network.

“Cloud is a cornerstone of Standard Chartered’s strategy to meet the present and future banking needs of our clients," commented Michael Gorriz, group chief information officer of Standard Chartered. "Cloud providers have invested massively in the reliability and automation of infrastructure and platforms. Using cloud services improves our ability to be agile and innovative, while increasing our operational efficiency and resilience. As disruption in the financial industry continues, we can focus on client benefits by deploying our solutions quicker and allowing for faster integration of new business models and partners. To realise our digital ambitions, Standard Chartered has chosen Microsoft as a strategic partner and this partnership marks a major milestone for the bank in adopting a cloud-first approach.”

Standard Chartered will adopt Microsoft Azure as a preferred cloud platform to meet the bank’s need for resilient data centres and cloud services and addressing customers’ security, privacy and compliance requirements across the bank’s global footprint.

The first set of capabilities to move to Microsoft Azure will be Standard Chartered’s trade finance systems, allowing for seamless cross-border trade for the bank’s corporate and institutional clients.

“The pandemic has shone a spotlight on the need for businesses and banks to be resilient from a risk mitigation, cost and security perspective," added Bhupendra Warathe, chief technology officer, Cloud Transformation at Standard Chartered. "With the increasing trend of an always-on digital economy, commercial and consumer clients are looking for applications and services that empower them to do online banking from anywhere, flexibly and efficiently. The speed and scale of continuous innovation offered by Azure allows us to innovate with the latest AI services to meet evolving client needs. We can pilot new apps in one market and scale them rapidly across others. This is especially important for a bank with a footprint as broad and diverse as ours.”

The partnership will also advance the bank’s digital workplace transformation with Microsoft 365 and Microsoft Teams providing modern productivity and collaboration tools to Standard Chartered’s 84,000 employees across its 60 markets.

The future of banking

Standard Chartered will also use Microsoft Azure artificial intelligence (AI) and data analytics capabilities to enhance and automate banking processes as well as deliver hyper personalisation of its client products and experiences. The bank says that co-innovation in open banking application programming interface (API) and Internet-of-Things-based, real-time payments will also help it unlock new banking experiences for clients. As a part of the strategic partnership, the bank and Microsoft will also explore sustainable finance and business initiatives to expand sustainability across the industry.

“Cloud computing is an enabler for financial institutions to modernise their infrastructure and systems, to gain the agility they need to respond to competitive pressures, regulatory environments and customer demand," said Bill Borden, corporate vice president of Worldwide Financial Services at Microsoft. "We are committed to helping Standard Chartered Bank in its ongoing digital transformation journey as it strives to address evolving customer needs and build the next generation of banking experiences.”

Microsoft ramps up financial services presence

The news from Standard Chartered is the latest in a series of connections that Microsoft has made with the financial services world over the past couple of months. Back in June, CTMfile reported on the partnership between SAS and Microsoft that focussed on analytics and AI. 

The tech giant has also announced a couple of high profile partnerships with banks. At the end of June, it was announced that BNY Mellon would collaborate with Microsoft on ESG data and analytics solutions designed to help investment managers better manage their data, improve the success of US-listed fund launches and support the customisation of investment portfolios to preferred environmental, social, and governance (ESG) factors. 

Additionally, as part of its digital strategy to collaborate with external partners, BNY Mellon has expanded its relationship with Microsoft to create data, technology and content solutions for investment managers built on Microsoft Azure. Three new offerings already launched include:

• Data Vault: A cloud-based data and analytics platform that supports the rapid onboarding of data to provide greater flexibility and accelerate client innovation and discovery. Combining this with a scalable, machine learning approach to data quality, users can more quickly and easily interact with data to gain actionable insights.
• Distribution Analytics: Takes advantage of machine learning to help asset managers better understand predictive market demand drivers and sales momentum for mutual funds and exchange traded funds in the US so they can gauge how to successfully gain market share.
• ESG Data Analytics: Uses artificial intelligence to customise investment portfolios to individual ESG preferences with support from crowdsourced ESG data and demonstrability screens.

Then in July, National Australia Bank and Microsoft announced a five-year strategic partnership to co-design, develop and invest in NAB and BNZ’s multi-cloud technology, in a similar deal to today's StanChart news. That partnership will see NAB Group and Microsoft share development costs and resourcing investment to architect a multi-cloud ecosystem that will host 1,000 of the banks’ applications to Microsoft Azure as the primary cloud, while ensuring the same applications can be moved to or run across a secondary cloud if necessary. NAB has already moved more than 800 applications to public cloud providers as part of its cloud first, multi-cloud strategy. NAB’s proportion of apps on public cloud will move from one third, to around 80% by 2023.

“The needs of our customers haven’t changed, but their expectations of how we deliver a more personalised service has," commented NAB group executive Technology and Enterprise Operations, Patrick Wright. “To deliver for customers, we need to invest in the latest technology, leveraging global leaders like Microsoft to help us bring new services to our customers, quickly and at scale. Together, we will improve the resilience of NAB and BNZ banking services and reduce development timelines for system changes and improvements, from six weeks to as little as two days.” 

Microsoft’s global engineering team is supporting the program, aware of the international impact it promises. Jason Zander, executive vice president, Azure of Microsoft said: “Through this strategic partnership we will collaborate and co-innovate with NAB - creating compelling customer experiences, and streamlining the bank’s own operations.”

Microsoft will also train 5,000 NAB and BNZ technologists as part of the NAB Cloud Guild programme, ensuring NAB personnel are equipped with the skills required.

This latest news from Standard Chartered underlines the role that Big Tech will play in the future of banking, as financial institutions attempt to escape slow, expensive and complicated legacy technology to instead to a cloud first approach to operations.