Google's breakthrough banking deal for cloud services could set trend

By Peter Ward

BBVA is one of the largest financial institutions in the world and as part of the deal an initial 35,000 of its staff will use Google's cloud services. These will include Gmail, Google Chat, Google Calendar, Google Docs and Google Video.

By the end of this year the firm expects a total of 110,000 employees in 26 countries to migrate to these services.

"We were looking for a technology that would transform our business operations - not just make our workers more efficient," said Jose Olalla, CIO at BBVA. "Integrating the Google Apps for Business suite with our own tools will allow us to introduce a new way of working where employees have access to all the information they need with just one click, no matter where they are, and can reap the benefits of using advance collaboration tools."

Landmark deal for Google

The deal is particularly noteworthy as it marks the biggest such agreement for Google's Enterprise offerings. That the deal was signed with a banking firm is also significant.

"Companies of all sizes, including those with tens of thousands of employees, are now embracing cloud computing," explains Sebastien Marotte, vice president of Google Enterprise EMEA. "[The deal] shows that cloud computing is now a reality - and leading organisations are already realising its potential to transform their business."

A recent report by William Mills on spending in the banking industry suggested that while cloud computing is popular in other sectors such as retail, banks are still playing catch up. This, according to one contributor to the report, Paul Schaus president of CCG Catalyst, is because the banks have been in 'survival mode' for the past few years and have not been looking ahead in terms of technology.

However, banks are now looking at better ways to control costs and cloud computing may be an answer to that. Questions over reliability and security also appear to have been answered.

Steve Powless, CEO of Computer Services, also remarked in the report that he expects banks to increasingly outsource compliance and other non-core competencies to take advantage of the efficiencies and expertise offered via cloud services.

This study was conducted last year, yet the banking industry already seems to be moving ahead of these predictions.

Concerns raised about security

Security is a chief concern when it comes to banking and cloud computing as a concept has also raised questions in this area. With more data on the cloud, hackers and criminals will see it as an opportunity to get hold of that data and use it for profit. In the case of a bank, this data could prove to be worth millions.

David Emm, senior research analyst at Kaspersky Labs says that cloud computing could lead to an increase in the number of attacks on companies by hackers. "Over the last six months when you look at the stuff that's appeared in the news, whether it's RSA or Sony or Lush the cosmetics firm or whoever else, there's a bigger amount of incidents of compromises specifically focused on that company rather than whoever may fall into the net. And I think as use of the cloud grows, that sort of focus will grow," he said.

"My computer is only that big, and the data on it is only that much, but Google Docs is vast and it's a big pool. Potentially it's a single point of failure as opposed to many points of failure. If for any reason they get the security wrong, then the impact is much, much bigger than it is if my computer is compromised," he adds.
BBVA has stressed that all customer information and data and key banking systems will stay in its own data centres, and will not be put on the cloud.

Nevertheless, now a bank as big as BBVA has opted for a cloud, attitudes are clearly changing. The company's employees will benefit from a mobile system. They will be able to access information from anywhere at any time using an internet connected device.

Now the first major move has been made by this sector, many banks and financial institutions will be watching closely to see how this deal works out for BBVA. Although this is mainly non-critical services being migrated to the cloud, there still may remain a nagging security concern for those involved. For Google, this is a major breakthrough, for cloud computing as a whole, it could be even bigger.