Wells Fargo, the US's third biggest bank by assets under management, has selected Azure as its primary public cloud provider and Google Cloud for additional AI solutions as it announced a new digital infrastructure strategy. This will include "a multi-cloud approach with third-party data centers to drive technological speed, agility, and scalability for its customers and employees" the bank said. The contracts come amid a sweeping IT overhaul that also saw it in 2020 become the biggest customer to-date of HPE GreenLake (a fully managed, on-premises, pay-per-use infrastructure option) -- reportedly after being stung by public cloud data egress charges.
Alluding to the hybrid approach, the bank said it would "transition to a set of third-party-owned data centers, while the company’s longer-term aspirations are to rely predominantly on public cloud. These facilities will complement the public cloud offerings of Microsoft and Google Cloud with both private cloud and traditional hosting services to create a secure, resilient, and flexible technology foundation for the company’s transformation."
Shakeup comes amid risk, compliance focus
The multi-year public cloud contracts come as the bank continues with a major infrastructure and corporate leadership shakeup in the wake of a damning scandal that saw it pay $3 billion to regulators in 2021 to settle charges that the bank engaged in fraudulent sales practices for more than a decade -- activity that US Attorney for North Carolina Andrew Murray described at the time as "staggering [in] size, scope and duration.
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That shift has improved investing heavily in new risk and compliance toolings and improving data visibility, executives say -- although the September 15 Wells Fargo cloud partnerships release understandably focussed more on enhanced user experience and applications. (Some of the company's recent vacancies suggest like many banks, it is still heavily reliant on mainframe backends -- one recent mainframe software engineer role, for example, highlighted a need for someone with at least eight years of experience in programming COBOL.)
Wells Fargo cloud contracts "a critical step..."
"“Launching our new digital infrastructure strategy is a critical step in our multi-year journey to transform Wells Fargo, making it easier for customers to do business with us and creating a better working experience for our employees,” said Saul Van Beurden, Wells Fargo’s Head of Technology, adding: “The Wells Fargo of tomorrow will be digital-first and offer easier-to-use products and services, and all of that starts with driving speed, scalability, and enhanced user experience through [this] next generation digital infrastructure strategy.”
Wells Fargo will tap Azure to "empower the creation of innovative solutions across all bank functions and provide a trusted and secure foundation for strategic business workloads" it said in a press release, using "critical data and analytics services to accelerate Wells Fargo’s digital transformation, including delivering enhanced customer experiences and enabling increased employee collaboration." Google Cloud's capabilities, meanwhile, will "drive advanced workloads, and complex artificial intelligence and data solutions, allowing the company to move faster on driving personalized experiences for its customers and clients.
Wells Fargo's cloud move comes amid risk drive
The major cloud contracts (Wells Fargo declined to put a figure to them) came after CEO Charles Scharf said on the bank's last earning call that leadership's "top priority continues to be building an appropriate risk and control infrastructure for a company of our size and complexity and we continue to invest in additional resources and devote significant management attention to this work." He added on July 14, 2021: "The amount of customer remediation and control-related issues that existed when I arrived was many multiples of what exist at our company.
“I’ve spoken of what we put in place to address these issues and by most metrics, we are making significant progress. Regarding our work on consent orders and other regulatory requirements, the work remaining is significant and as such, this remains a multi-year journey for us…”
Fixing these issues, as well as growing revenues, will involve major digital transformation, he said, noting that the bank had made “significant hires in the data platform and analytics, strategy, digital and our technology groups”. It can certainly afford to: net income hit $6 billion in its 2021 Q2.