Bank of America’s CTO explains what’s holding him back from moving to the public cloud, even as the rest of Wall Street gears up for the switch

Bank of America

Bank of America has yet to move a significant amount of its infrastructure to the public cloud, as it feels pricing from public cloud providers is still too high.
The cost of the bank running services on its private cloud is 30% cheaper than what the leading public cloud providers can offer, Howard Boville, Bank of America’s chief technology officer, told Business Insider.
Currently, Bank of America does some one-off complex calculations and model testing in the cloud as part of what Boville called controlled experiments.

While the majority of Wall Street banks are starting to emerge as potential major customers of public cloud businesses like Google, Amazon and Microsoft, one large bank has remained noticeably absent.

Bank of America has by and large resisted the growing trend amongst many big banks that includes moving at least part of their infrastructure to shared servers. As many on Wall Street have begun to develop strategies for how best to work with the three main public cloud providers, Bank of America has instead focused its efforts on migrating its computing infrastructure to its private cloud, a journey that began in 2013.

Often, security concerns and regulatory issues are cited as reasons why banks are hesitant to use public clouds. But for Bank of America, those problems have largely been addressed thanks to the work the bank has already done with public cloud providers to ensure their capabilities are up to snuff, Howard Boville, the bank’s chief technology officer, told Business Insider.

Instead, what’s held Bank of America back from moving to the public cloud comes down to pricing.

"We’re just waiting for the value play for our shareholders to kick in and allow us to do that," Boville said. "There needs to be a neighborhood we want to live in at the right economics."

Boville said the bank tracks the costs to run its own cloud relative to using the top public cloud providers. Currently, a move to the public cloud would result in a 30% increase in costs, he said. Meanwhile, Bank of America’s private cloud has played a big part in the billions it has saved in infrastructure costs in recent years.

On paper, this seems counterintuitive: Many on Wall Street and beyond look to public cloud platforms like Microsoft’s or Amazon’s for the cost-savings potential. However, at the scale of giant companies like Bank of America, the math doesn’t always work out: In 2016, for instance, cloud storage company Dropbox moved the bulk of its infrastructure off of Amazon Web Services and into its own data centers, and saved $74.6 million over two years in the doing.

To be sure, while big banks have shown an increased interest in the public cloud due to the cost savings and innovation opportunities they believe it provides, there is still a long way to go. A recent report by research and advisory firm Aite Group estimate that at the majority of large Wall Street firms less than 10% of their total technology stack resides on public clouds.

As for Bank of America, it won’t forgo the public cloud entirely. Boville acknowledges the bank has plans to eventually make the move when the figures make sense. In fact, Bank of America already uses the public cloud in specific situations.

Currently, the bank does some one-off complex calculations or model testing with artificial intelligence in public clouds. Boville characterizes them as controlled experiments, as they allow the bank to test out the capabilities of different cloud providers without committing to any of them long term.

As providers’ pricing continues to drop, the bank will eventually set up shop on those platforms on a more permanent basis.

"There will be a play where we have to start to do more workloads out there," Boville said."Then it’ll be the right value transaction for us as opposed to doing things and kind of sleep walking into the decision without understanding all of the elements we need to think about it."

See more: Wall Street is finally willing to go to Amazon’s, Google’s, or Microsoft’s cloud, but nobody can agree on the best way to do it: ‘If you pick a favorite and you’re wrong, you’re fired’

Boville said the bank is in good position to make that switch when it does come. It has already done much of the engineering work to make the switch, and has experience with the public cloud providers thanks to the bank’s controlled experiments, he added.

However, the transition will not be rushed. He cited firm CEO Brian Moynihan’s patience when it comes to embarking on a project.

"Once he has a strategy, and it’s the right strategy, we just stick to it," Boville said. "We don’t go left, and we don’t go right because it’s a shiny new thing. We’ll react to our environment, but our reaction to the environment is because of all of the monitoring that we’re doing."

NOW WATCH: WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war