National Australia Bank is a third of the way into a 10-year transformation plan that it hopes will increase its competitive edge, improve the customer and banker experience and avoid obsolescence across its IT architecture.
The technology side of this project, which the $754 billion-asset NAB calls Total Environment Transformation, includes a core systems overhaul as well as branch, contact center, data center, network and social media upgrades. For its new core banking system, NextGen, the Melbourne bank has selected the Oracle Banking Platform that Oracle officially debuted in September. For much of the data center equipment to support it, the bank is implementing IBM infrastructure on demand.
Australia's four major banks — Australia and New Zealand Banking Group, Commonwealth Bank of Australia, National Australia Bank and Westpac Banking Corp. — have all been extensively modernizing their technology. CBA is close to completing a core system replacement using SAP's platform and is building a layer of customer analytics capability on top of that with SAS software. ANZ recently acquired technology to help provide financial data management to its corporate clients.
When Adam Bennett became NAB's chief information officer, in March 2009, his team evaluated the marketplace and the industry. "We found that the pace of technology change is unprecedented, our customers' expectations and what's driving their behaviors is a strong force for change," he says. "The customer has changed how they want to do their banking."
Banking software had also improved, he found. "We've seen a lot of specialization packages, such as Oracle Banking, that didn't exist 20 years ago," Bennett says. "All those changes for us meant our legacy systems are not well suited to the present of how does one bank with us. That was the impetus to initiate a transformation of the entire environment toward an on-demand environment where we've got infrastructure on demand, network on demand, contact center on demand, and a core banking platform from Oracle with a clear upgrade path. We're getting away from a bespoke legacy environment onto a more upgradable and current set of technology applications, infrastructure, and network that we feel are necessary to make us competitive going forward."
In November, National Australia reorganized its IT leadership. The CIO position was eliminated and Bennett was promoted to the newly created position of executive general manager, enterprise transformation, group business services. His responsibilities include enterprise architecture for the bank, enterprise project management, and transformation technology including the NextGen program.
In December NAB went live with an internal private cloud, based on IBM's infrastructure on demand, that hosts the bank's main production environment, including its new Oracle system, and will support short-term compute-intense projects such as marketing campaigns. "We can pay for what we use, and IBM will charge for what we use," Bennett says. "If we don't need it, we won't use it."
The equipment is all hosted in NAB's data centers, which is unusual for in the pay-by-the-drink model. "We're quite pleased with that," Bennett says. "We're trying to get our whole environment on a new footing, where we will have our infrastructure on an on-demand basis with a strategic partner. We're also looking to do that with our network provider."
The bank has upgraded its network from eight voice and data networks to one. It plans to virtualize employee desktops. It's seeking a new trading platform for equities, it's looking into new payments systems, and it's opening a new data center in January. "It's a pretty holistic transformation," Bennett says.