Wells Fargo aims to save $1 billion over 10 years with public cloud

  • Wells Fargo is working with Microsoft Azure and Google Cloud to migrate to the public cloud.
  • A senior Wells executive told Insider that moving to the cloud could cut $1 billion over the next decade.
  • Wells Fargo’s move to the public cloud comes as Wall Street embraces the technology more broadly.

Wells Fargo’s move to the cloud could save the bank up to $1 billion over the next decade, one of the bank’s top executives told Insider.

After revealing the outlines of what the company called a new “digital infrastructure strategy” last fall, Wells Fargo is preparing to retire much of its on-premises technology stack and launch a multi- cloud. Chintan Mehta, Wells Fargo’s chief information officer and chief digital technology and innovation officer, said while the efforts will involve “heavy capital expenditure,” time savings are the goal.

Wells has partnered with Microsoft Azure, which is now Wells’ primary public cloud provider, and Google Cloud, and will also rely on third-party data centers. Azure will support most of the bank’s cloud tools, including those faced by customers and employees. But Google Cloud will handle its “advanced workloads,” which include its efforts in big data and artificial intelligence.

Wells Fargo CIO Chintan Mehta

Chintan Mehta, Chief Information Officer and Head of Digital Technology and Innovation at Wells Fargo.

Wells Fargo

As part of a renewed interest in digital technology, Wells Fargo has also introduced a new virtual assistant – aptly named Fargo – due to launch later this year.

Behind the scenes, Mehta and his team are revamping a key data platform the bank uses to personalize online customer experiences and anticipate customer needs. Putting the so-called customer experience engine on the public cloud will allow the bank to scale the platform and perform “billions” of calculations per day while protecting data, Mehta said.

Rebuilding Wells Fargo technology stacks for the public cloud — where the bank will need to rewire its security and privacy protocols — will involve “heavy capital expenditure” and “heavy operating expense,” Mehta said. But the end goal, however, is to save time.

“Money is part of it, but the time you end up spending building infrastructure before something productive happens goes down dramatically when you have something like the cloud,” he said. declared.

Wells Fargo’s move to the cloud comes as Wall Street powerhouses embrace the technology. Banks, once hesitant to make the leap to the public cloud, have deepened their relationships with Big Tech companies providing the infrastructure. Meanwhile, buy-side firms like hedge funds, asset managers, and private equity firms have also embraced technology widely. The cloud now plays a critical role in how these companies scale compute capacity, use and find data.

The Nations

biggest banks

have long pointed out the importance of the cloud as a driver of innovation and, above all, efficiency. It’s as much about extracting and replacing legacy technologies as it is about driving new innovations. Other companies like Bank of America have also valued cost savings from cloud projects at billions of dollars. In 2019, Bank of America said it saved about $2 billion by forgoing partnerships with big cloud providers like Google and Microsoft to build its own private clouds, though the bank has since partnered with IBM on efforts. of public cloud.

As Wall Street incorporates the public cloud into its technology stacks, it has begun to experience a sea change in the way people do their jobs and, subsequently, in its talent pool. And Wells Fargo is no exception, as the bank is actively developing its people to reflect its cloud ambitions. The bank is hiring 2,500 technologists in its 42,000-strong technology organization this year, Chief Technology Officer Steve Hagerman recently told Insider. And it will seek to have 50% of its engineers cloud certified as well.

Like other banks, Wells Fargo is also no stranger to questions about its spending, especially since the bank has had a high-profile mission to cut costs under CEO Charlie Scharf. In January, for example, the bank announced that it planned to cut the company’s expenses by $1.6 billion in 2022.

Wells Fargo Chief Financial Officer Mike Santomassimo emphasized the evolving nature of the company’s efficiency goals during the bank’s first-quarter earnings call in April.

“As I’ve said many times over the past two quarters, this is not a static program. It’s something that we build into the DNA of how we run the place and it continues to evolve, and we feel good about executing on that,” Santomassimo told industry analysts.

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