Although a bank's business has basically stayed the same over the last couple of decades, how a bank operates has drastically shifted. The fundamental pillars of a bank, according to Mike Telang, executive vice president and head of enterprise architecture at Wells Fargo, now focus on mostly security, regulation, and innovation.
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When it comes to technology trends in the financial services industry, Telang said its impact on a bank depends heavily on where the bank is in its maturity lifecycle.
"I think it depends on the lifecycle of the maturity of where you are as a bank at that point in time and you've got to find a solution for that ... you have a lot of trends like blockchain, you have a lot of trends like security, so we are applying the technology to the use case that suits us best," Telang said during a panel session at VMworld 2019 in San Francisco last week.
Looking at emerging technologies, Telang described the challenges Wells Fargo has faced in adopting machine learning (ML) and artificial intelligence (AI).
"ML/AI, I think the classic examples are around fraud and [anti-money laundering] and stuff like that, that's one of the things a bank is jumping all over; it comes with its own set of problems," he explained.
"I think almost all large banks are being asked now by regulators to go back and identify any ML/AI solution that's brought into the bank because the implication of that is, if the wrong algorithm is being used, you are going to decline credit or you're going to have impact to the customers.
"It's a bit of a double-edged sword for a bank where you can't go all in and you can't throw all use cases at it, especially the ones that are impactful for customers."
Another emerging technology that banks, including Wells Fargo, have dabbled with but are yet to find a use case for that improves upon existing applications like databases, is blockchain.
"For a long time I think large banks were looking at blockchain and [distributed ledger technology] saying it's a solution looking for a problem, then there was a sense that we don't want to be left behind if the problem suddenly appears," he said. "So I think a lot of banks have invested in blockchain and the obvious use case of payments is there ... and looking at chain of custody etc, but I wouldn't say we've found the game-changing use case just yet."
Discussing his organisation's cloud strategy, Telang said there's a trend of using a multi-cloud approach to take advantage of the various capabilities of different cloud providers.
