As we look ahead to 2024, enterprises around the world are undoubtedly evaluating their progress and creating a growth plan for the year to come. For organizations of all types—and especially those in highly regulated industries such as financial services, government, healthcare and telco—considerations including the rise of generative AI, evolving regulations and data sovereignty laws and ongoing security challenges must be top of mind.

As enterprises look to address these requirements and achieve growth while adopting innovative AI and hybrid cloud technologies, IBM will continue to meet clients wherever they are in their journeys by helping them make workload placement decisions based on resiliency, performance, security, compliance and cost.

Here are five things you need to know about how IBM Cloud is helping clients balance innovation with evolving regulations.

1. Addressing regulatory requirements and evolving data sovereignty laws

As nations enact laws designed to protect data, IBM is focused on helping clients address their local requirements while driving innovation at the same time. For example, IBM Cloud offers a variety of capabilities and services that can help clients address the foundational pillars of sovereign cloud including data sovereignty, operational sovereignty and digital sovereignty.

IBM Cloud Hyper Protect Crypto Services offers “keep your own key” encryption capabilities, designed to allow clients exclusive key control and help address privacy needs. With these capabilities, we aim to enable clients to control who has access to their data while still leveraging the benefits of the cloud. Additionally, IBM Cloud Satellite is designed to help clients meet their data residency requirements with the ability to run cloud services and applications across environments and wherever data is located: on-premises, in the cloud, or at the edge.

2. Securely balancing the influx of data from AI with innovation

At the same time, we’re helping clients embrace AI securely to fuel business transformation. Earlier this year, we unveiled watsonx running on IBM Cloud to help enterprises train, tune and deploy AI models, while scaling workloads. We also recently announced IBM and VMware are pairing VMware Cloud Foundation, Red Hat OpenShift and the IBM watsonx AI and data platform. This combination will enable enterprises to access IBM watsonx in private, on-premises Infrastructure as a Service (IaaS) environments as well as hybrid cloud with watsonx SaaS offerings on IBM Cloud. Additionally, clients can optionally use IBM Cloud Satellite to automate and simplify deployment and day two operations of their VMware Private AI with OpenShift environments.

AI can be a fundamental source of competitive advantage, helping organizations meet challenges and uncover opportunities for now and in the future. For example, CrushBank’s AI Knowledge Management platform leverages watsonx to transform IT support, helping the company to streamline help desk operations with AI by arming its IT staff with better information. According to CrushBank, this has led to improved productivity and a decrease in time to resolution by 45%, ultimately enhancing the customer experience.

We understand executing AI at scale can be a difficult process—especially when one considers the challenges with processing the data required for AI models—and are committed to continuously delivering solutions to help clients leverage AI with speed and at scale. With IBM Cloud Object Storage, we are helping clients manage data files as highly resilient and durable objects—which can help enterprises to scale AI workloads.

3. Managing security and compliance challenges across hybrid, multicloud environments

As enterprises confront new threats across their supply chain, including those potentially posed by AI, a complex web of global regulations has struggled to keep pace. In our view, an effective cybersecurity strategy, across the supply chain, requires adoption of consistent standards, workload and data protection, and governance, aided by robust technology solutions. IBM’s continued commitment to offer innovative security solutions that can help clients face contemporary challenges is the foundation for our recent progress. This includes the recent expansion of the IBM Cloud Security and Compliance Center—a suite of modernized cloud security and compliance solutions—to help enterprises mitigate risk and protect data across their hybrid, multicloud environments and workloads. The new IBM Cloud Security and Compliance Center Data Security Broker solution provides a transparent layer of data encryption with format preserving encryption and anonymization technology to protect sensitive data used in business applications and AI workloads.

Additionally, the IBM Cloud Security and Compliance Center is designed to deliver enhanced cloud security posture management (CSPM), workload protection (CWPP), and infrastructure entitlement management (CIEM) to help protect hybrid, multicloud environments and workloads. The workload protection capabilities aim to prioritize vulnerability management to support quick identification and remediation of critical vulnerabilities. In fact, we have innovated our Scanning Engine for the detection of vulnerabilities in Kubernetes, OpenShift, and Linux standalone hosts, designed to deliver enhanced performance with greater accuracy, as well as facilitate prioritization on critical issues.

To complement our existing suite of tools, we also introduced an AI ICT Guardrails profile in the IBM Cloud Security and Compliance Centerwhich provides a predefined list of infrastructure and related data controls that are required to handle AI and generative AI workloads. With these guardrails, we are working to help enterprises seamlessly manage security and compliance capabilities as they scale their AI workloads.

4. Embracing third and fourth parties while reducing risk

Through our long history of working closely with clients in highly regulated industries, we fundamentally know the challenges they face and built our cloud for regulated industries to enable organizations across financial services, government, healthcare and more to drive secured innovation. In fact, we are honored to be recognized by Gartner® in their 2023 Gartner® Magic Quadrant™ for Strategic Cloud Platform Services (SCPS).¹ We feel that IBM’s positioning in this report is a strong acknowledgement of our strategy.

We designed our cloud for regulated industries to allow clients to host applications and workloads in the cloud with confidence, while addressing third and fourth party risk throughout their supply chain. Only ISVs and SaaS providers that are validated to be in alignment with the IBM Cloud Framework for Financial Services—an industry-defined security and a streamlined compliance controls framework—are eligible to deliver offerings on the IBM Cloud for Financial Services.

The Framework is informed by IBM’s Financial Services Cloud Council which brings together CIOs, CTOs, CISOs and Compliance and Risk Officers to drive cloud adoption for mission-critical workloads in financial services. The Council has grown to more than 160 members from over 90 financial institutions including Comerica Bank, Westpac, BNP Paribas and CaixaBank who are all working together to inform the controls that are required to operate securely with bank-sensitive data in the cloud. These controls are not IBM’s—they are the industry’s collective controls and we’ve made them available on multiple clouds (public or private) with IBM Cloud Satellite.

5. Modernizing processes as organizations embrace digital transformation

Across industries, we are seeing organizations move further on their digital transformation journeys. For example, in financial services, the payments ecosystem is an inflection point for transformation. We believe now is the time for change and IBM continues to work with its partner community to drive transformation. Temenos Payments Hub recently became the first dedicated payments solution to deliver innovative payments capabilities on the IBM Cloud for Financial Services, now the latest initiative in our long history together helping clients transform. With the Temenos Payments Hub now on IBM Cloud for Financial Services, the solution is available across IBM’s hybrid cloud infrastructure, running on Red Hat OpenShift with IBM Power and LinuxONE. Additionally, as organizations look to modernize their trade finance journeys, we have leveraged the breadth of IBM’s technology and consulting capabilities to develop a platform for the industry. We recently introduced the IBM Connected Trade Platform, designed to power the digitization of trade and supply chain financing and help organizations to transition from a fragmented to a data-driven supply chain.

Learn more about how to balance innovation and regulatory requirements with IBM Cloud

As enterprises prepare to accelerate innovation in the coming year, it will be critical to leverage the latest technologies including AI and hybrid cloud, while addressing evolving regulatory requirements. While regulations will likely continue to change, IBM remains committed to helping clients improve resiliency and performance, address their compliance challenges, enable security and manage risk.

¹ Gartner, Magic Quadrant for Strategic Cloud Platform Services, 4 December 2023. Gartner and Magic Quadrant are registered trademarks of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.