Andrew Weir on Cloud Services and AI
60 Second interview with Andrew Weir, Senior Technology Advisor, on the development of Cloud Services, AI and challenges to the financial services sector.
Do you see an opportunity for smaller enterprises to utilise Artificial Intelligence (AI) or Machine Learning (ML) without incurring huge costs?
I don't think it makes sense for them to hire specific experts in these fields. Increasingly AI/ML will be built into software and services which enterprises will buy from third parties. If SMEs have a need to do their own development internally, it should be done on one of the major cloud platforms (Google, Amazon, Microsoft) where there are extensive toolkits which can be used for learning and implementing prototypes before launching.
Do you think Google, Amazon, Facebook, etc., will go head on into the banking market with the current regulatory constraints? If they do, how do the major banks compete? Or will they just want to sell services to the existing players?
I don't think they will want to become banks, namely taking deposits and leveraging their balance sheets to lend. There are plenty of financial services they can provide which don't require full banking licenses and the regulatory burden that brings, particularly with initiatives like Open Banking providing API based ecosystems.
Of the three companies, Amazon has a business model which benefits most from offering financial services to customers. Having customers pay Amazon directly without card charges, for example, can't be far away. They already offer loans to business customers, like AliPay does in China.
Facebook will probably want to aggregate financial information and offer simple mobile payments between users. Google and Apple have tried payment initiatives, but they haven't been very disruptive as they simply reuse the existing card payment infrastructure and provide smartphone-based wallets. The most interesting tech companies to watch are the Chinese (Tencent, Alibaba) who really are taking on banks much faster than western tech companies.
What was your biggest success whilst at HSBC?
Persuading the bank to take public cloud seriously for the first time. Apart from using some SaaS applications, we hadn't used Google, Amazon or Microsoft Azure in any meaningful way.
While I was at HSBC we signed an innovation partnership with Google to use their Cloud Platform across the bank, and we also started using Amazon Web Services and Microsoft Azure for significant projects. There is now a "cloud first" policy for new application development.
You helped create the HSBC Technology Advisory Board – an external group of technology industry advisors to HSBC’s main board. What was their purpose, and did it deliver the outcomes required?
The purpose was to provide expert technologists to advise the main board about the role of technology in driving business value, and to give insight into future technologies which could become relevant to the bank. It also provided practical guidance to the existing technology team at HSBC. It certainly provided the advice and insight - whether HSBC acted on it is another question! I believe that if the board continue see value in it, it will have a significant impact.
What do you think are the biggest challenges faced by CTOs of financial services organisations in the next 18 months?
I think probably the biggest challenge for CTOs of banks is responding to open banking and PSD2. It's the biggest change to the banking environment for many years, and banks have to choose whether to embrace it or do the minimum to comply with the regulation. For other financial services like Insurance or Asset Management, it's figuring out a cloud strategy which will deliver short and long term value.