US technology company Oracle has joined forces with HSBC, Europe's largest lender, to boost the bank’s digital offerings and accelerate its digital transformation journey.
Under the multi-year agreement, the London-based multinational bank and financial services company, will upgrade and migrate select database systems to Exadata cloud@customer, Oracle’s cloud platform.
The cloud platform will be delivered as a managed infrastructure service in HSBC’s own data centres and its deployment will scale the bank’s mission-critical systems and services, Oracle said.
The partnership was announced in parallel with the Oracle Cloud World event that started in Las Vegas, Nevada, on Tuesday. Thousands of company representatives, industry experts and technology consultants from around the world gathered in the US city to attend the event.
“Our strategy is to digitise the bank at scale, so that we can innovate faster for customers, and our collaboration with Oracle is important in advancing this transformation agenda,” said Frank McGrath, chief technology officer at HSBC.
“We chose Exadata cloud@customer primarily for its ability to offer well-known databases, with the benefit of a database-as-a-service platform … giving us the performance and operational agility [that] we need as we continue to grow and diversify our business,” Mr McGrath said.
Oracle’s stock was trading slightly down at $66.74 at 2pm New York time. It has dropped nearly 30 per cent in the past 12 months.
The global cloud computing market is projected to grow at a compound annual rate of almost 16 per cent from 2022 to 2030, from $368.97 billion last year, according to Grand View Research.
Meanwhile, the global spending on public cloud services is expected to rise by more than 20 per cent annually to $495bn this year — nearly $84bn more than what was spent in 2020 — and hit $600bn in 2023, according to the US research firm Gartner.
Exadata cloud@customer is an Oracle cloud infrastructure service that will provide a secure cloud platform to boost HSBC’s critical systems. It will let HSBC retain control of its data and meet data locality and security regulations.
It will also allow the lender to easily bring cloud automation to manage legacy applications, and easily scale services according to customer and local-market demands, Oracle said.
With assets of more than $2.9 trillion as of June 30, HSBC is one of the world's largest banking and financial services organisations. It reported a 2 per cent annual jump in its second-quarter revenue to $12.8bn. Its adjusted profit before tax increased 13 per cent to $6bn.
Last November, HSBC joined hands with the Abu Dhabi Global Market Digital Lab — a platform for financial institutions and FinTech firms — to test and develop solutions for the financial services sector.
“Financial organisations are rapidly adopting new technologies and transforming their operations as they tap into new market opportunities while meeting more demanding data locality and privacy requirements,” Richard Smith, Oracle's executive vice president for technology for Europe, Middle East and Africa, said.
“Our partnership with HSBC is based on achieving this balance, enabling it to consolidate critical systems on a secure, scalable on-premises cloud platform and develop cloud-based services faster,” Mr Smith said.
Oracle currently has 40 cloud regions globally, with three in the Middle East, and the most recent one opened in Abu Dhabi last November. The Jeddah and Dubai cloud regions were launched in 2020.
Cloud region is a complex that houses at least two data centres.
Earlier this month, the Texas-based software major also opened a technology collaboration centre in Abu Dhabi to help public and private sector organisations leverage the use of emerging technology to boost their bottom lines.
In June, TikTok said Oracle will store all the data from its US users, in a bid to allay fears about its safety in the hands of a platform owned by ByteDance in China.
Oracle’s latest partnership with HSBC contributes to the bank’s multi-year initiative to transform its technology infrastructure to speed up the development, delivery and scaling of new products and services, HSBC said.
It will make its products more secure, readily available, and build digital capabilities and skills across its workforce.