It’s often said that financial institutions, which handle vast amounts of critical and personal data, will be wary of the cloud. But Argenti is clear that cloud’s benefits far outweigh any concerns, and that even security can be better on cloud than on-premise. “I’ve seen what the cloud can do as an accelerator. In my previous job, I helped several companies go through a cloud transformation, companies like Volkswagen, Johnson & Johnson, Philips. It’s really about gaining velocity, and empowering developers,” he says.
Two of the bank’s newest and fastest growing businesses – consumer banking, called Marcus, and transaction banking, called TxB – have been built natively on cloud. TxB, Argenti says, was built with a relatively small team and at an incredible speed, none of which would have been possible without cloud. In just its second year, TxB recorded net revenues of $226 million, with about 350 clients and over $100 billion in deposits.
“Cloud’s biggest advantage is developer productivity, and the speed at which we release features on Marcus and TxB is a great indicator of that,” Argenti says. That’s partly because of the lots of services, platforms, and tools that are readily available with the cloud provider. “At the end of the day, people are our most valuable resource. And every time you can make them more productive, that’s where you calculate the return on investment,” he says. TxB, he says, took about 18 months to build. “Probably, if we’d done it differently, we would have had to build so much more – it could have taken two or three times the time. So I think, from a purely building acceleration, I would say it (cloud) is at least 50% reduction,” he says.
Availability, Argenti says, is the other big advantage of cloud. “The number of availability zones, data centres and regions that a cloud provider puts at your disposal exceeds the investment capacity of almost any company in order to have the same type of resiliency,” he says. This allows companies to offer services across countries very quickly.
For security, Argenti says, while it’s important to be very mindful, the quality and variety of tools that are at the disposal of the developer can make the environment more secure than what one has on-premise. “For example, imagine when you have zero-day vulnerability, when you’re using your own services, you have the responsibility of making sure that your systems are patched in the most timely manner. When you’re using a managed service by a cloud provider, that’s generally done for you, and you can kind of leverage the fact that it is done for all clients, it is done in the most timely manner, and it is done with investments that exceed the investments of pretty much any other company,” he says.
Gunjan Samtani, head of Goldman Sachs Services in India, says there are clearly advantages on the scalability, the agility, and the configurability of the cloud-native platforms they have built. “It is giving us an edge over existing providers of treasury service to corporate clients,” he says.
Samtani says about 35% of the TxB engineering team, and more than 50% of the consumer engineering team sit in the bank’s Bengaluru centre. He says many of the bank’s business leaders come from engineering backgrounds – like the global head of transaction banking, global head of consumer banking. “I, in my most cardinal identity, am an engineer. So, the dimension of engineers leading businesses, and driving commercial outcomes, is very much part of our transformation story. We in our country have truly benefited from modern skill sets of people who are being exposed to the cloud, people who have expertise in mathematics, statistics, computer science, applied to different industries,” he says.
Goldman Sachs’ engineering is a global organisation, he says, “but the centre of excellence for engineering product and consumer banking business sits here (Bengaluru).”
Argenti says the role of technology within businesses, and the role of technologists within the firm are changing dramatically. “There was a point in time in which the CIO was more like an IT person that was managing your desktop, your back office systems, etc. It was more like a back-office job. Today, technology is a competitive advantage. And that’s not just for us, it’s across multiple industries. That’s what I observed in my last years at Amazon, where companies were coming to us to gain competitive advantage through technology,” he says.
And this, he says, is what is attracting developers to traditional companies that have made technology their core competitive differentiator. “Developers don’t feel that they’re doing a back-office job. They don’t feel that there is a sort of tax to be paid when you go from the tech world to the industry world. No, in fact, you’re going to keep the same level, if not more, of technology problems, but at the same time, you will add, you will develop the ability to understand the businesses to change it inside out. And I think that’s really why, you know, we’ve been so successful in attracting some of the best technologists in the world. In India, if you see our competence, we’re launching an AI Centre of Excellence, we have an Automation Centre of Excellence. I don’t see India as a cost advantage. I see India actually as finding the best engineers in the world. It’s a scalability-meets-quality play. That’s really what it is,” he says.
What proportion of Goldman Sachs’ IT will move to the cloud? Argenti says it’s a journey. “It is not going to be 100% anytime soon, because there are some constraints, for example, for our low latency business with regards to frequency trading. There are latency requirements to actually be co-located with the exchange – that will not allow us to move some of those workloads. It could be in the future, with edge compute, but for now, with traditional cloud architecture, probably not. There are certain data gravity for some of the data that resides in our premises that might not be practical to move. But if you ask me, around 80% of our workloads are candidates that could move. When and how is really going to be determined by a business choice,” he says.
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