How Thought Machine can unlock the cloud for banks with Red Hat OpenShift


Travers Clarke-Walker, Chief Marketing Officer, Thought Machine

Thought Machine is building a global ecosystem of partners. Together, we help banks of all sizes become cloud native with minimum fuss. But one collaboration deserves a special mention, and that's our work with Red Hat.

Together, Thought Machine and Red Hat are streamlining the path to cloud native banking.

In this blog I want to explain precisely how.

Vault Core is the world's most advanced core banking engine. Written entirely from scratch on cloud native principles, it offers banks a chance to upgrade from obsolete legacy systems to a next-generation platform.
Demand for Vault Core is intense. We are winning new business worldwide. Lloyds Bank and SEB are clients who loved our product so much they invested in our company.

However, for many banks the prospect of migrating to the cloud is daunting.

There is the question of what to do with existing data centres. Banks may have invested a fortune in their own data centres and abandoning them is costly. Also, there may be applications that run exclusively on mainframes. Porting these to the cloud is difficult.

The solution is to move to the cloud step by step.

This is where Red Hat OpenShift, the industry’s leading enterprise Kubernetes platform, comes in with their functionality for bridging on-prem systems with the cloud. Hybrid Cloud via OpenShift means banks can run their IT systems across in-house hardware and the cloud as if they were a single environment.  

OpenShift is a multi-cloud solution. This means a bank can run applications across AWS, Google Cloud, Microsoft Azure or other cloud providers. OpenShift helps manage and automate operations across multiple clouds and on-prem more seamlessly.

For Thought Machine the collaboration is crucial as banks can adopt Vault Core as part of a long-term upgrade sequence. Migration to our core banking engine can be done as a single step. Other elements of the bank's infrastructure can remain on-prem, if needed. It's so much more manageable than attempting a big bang shift to the cloud.

That's just the start. There are many other benefits.

Kelly Switt, Global Director of FSI strategy and Ecosystem and Strategic Partnerships at Red Hat, is a passionate advocate of open hybrid cloud banking. I asked her to explain.

“Regulators are pretty definitive that banks can't be reliant on one cloud provider,” says Switt. “Prudential Regulation Authority and Financial Conduct Authority are outspoken about the risks. Red Hat OpenShift allows banks to operate across multiple clouds in a unified way, without increasing complexity or silos. This allows banks to comply with regulators.”

There is also the issue of data privacy and security.

“Banks need to pay attention to the geographic location of customer data. Regulators may insist the data is kept exclusively within a certain jurisdiction to comply with security and data privacy laws. Again, OpenShift allows banks to meet requirements, locating data on-prem or in the cloud as needed.”
Multi-cloud is an operational advantage as it avoids vendor lock-in. “Banks benefit from portability,” explains Switt. “With OpenShift, applications are free to move from cloud to cloud or even to on-prem or back again. This flexibility means banks can negotiate contracts with cloud providers from a position of strength.”

Furthermore, Red Hat is a pioneer of open source software. Working with Red Hat unlocks the benefits of open source solutions and open hybrid cloud.

“Our roots and engineering is based in the open source community,” says Switt. “When you think about what Red Hat actually does, we take code from the open source community and package different projects together, and we are hardening it for the enterprise through standard release cycles, QA, design, and support.”

This means banks aren't simply benefiting from Red Hat's ability to innovate. They can also enjoy the collective output of the entire open source community. This mirrors the way Thought Machine harnesses open source tools such as Kubernetes and Docker. Both Red Hat and Thought Machine are members of the Cloud Native Computing Foundation which plays a critical role in promoting open source development.

This philosophy is matched at Thought Machine. Fabian Siddiqi, director of cloud infrastructure, explains: “Thought Machine has greatly benefited from open source technology, from our orchestration platform Kubernetes to open source third-party libraries that are shipped with our product. We are also keen to give back to the community and have open sourced multiple in-house projects, such as our internal build system called Please and a cloud-native security scanning pipeline system Dracon.”

Banks have the option to work with Thought Machine and Red Hat to liaise with the open source community. Switt is proud of her company's record in offering clients direct access: “Banks leverage us as vehicles to get features built into full community code, and then deploy through a full release cycle, with QA and hardening. A big piece of what my team actually manages is looking at all the requests that come through from financial services clients and working with our engineers who work in the open source community to get those features into the products.”

Banks are already familiar with Red Hat. One hundred percent of the Fortune Global 500 commercial banks work with Red Hat in some way, as well as more than 90 per cent of the Fortune 500.  

The acquisition of Red Hat by IBM in 2019 cemented the formidable support structure available for clients. It was also good news for Thought Machine, as IBM was one of our first partnerships. While Red Hat continues to operate independently, the interests of all three brands are now firmly aligned.

Our collaboration means banks can adopt Vault Core in the way that suits them best. Infrastructure can span multiple clouds and on-prem data centres as a unified whole.

In the long run, banks can work with Thought Machine and Red Hat to engage with the wider open source community to become an active contributor.

Thought Machine and Red Hat offer banks not merely a smoother path to embracing the cloud, but the chance to work with the world's leading technology companies to create the products of the future.

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