NAB to Migrate Core Banking Systems to Cloud

NAB (National Australia Bank) plans to migrate more than 300 applications, including some core banking systems to a public cloud by the end of 2019.

The bank will use AWS (Amazon Web Services) as its cloud provider for its computing, storage, database and analytics capabilities, as it seeks to build new services and better deliver financial outcomes for its customers.

NAB is building a data lake on AWS which will “ingest, analyse, and take action on customer preferences gleaned from petabytes of satisfaction data in minutes rather than months,” said a recent press statement. This will allow NAB to “innovate at a faster rate, mine, and monetise data more effectively, and improve productivity with a clear line of sight into the customer experience,” it added.

According to a ZDNet report, NAB executive general manager and CIO Yuri Misnik expects core banking systems to eventually be run on the cloud, though it depends on “lots of moving parts and regulators, etc.”

“We are a regulated institution and we have lots of reports and lots of analytics with our data, and right now it’s actually quite hard to change, it’s built in an old way, old-fashioned way, and it’s expensive,” said Misnik. “Every time a new regulation comes in, every time a new requirement from APRA [Australian Prudential Regulation Authority] or Austrac [Australian Transaction Reports and Analysis Centre] comes in we have to do a lot of work.”

NAB also wants to make data analytics easier by putting it all in one place in a public cloud, which will allow it to introduce machine learning and artificial intelligence capabilities, as well as make it easier to meet incoming ‘open banking’ requirements which mandate that banking data is made available to consumers.

According to Misnik, NAB has consulted with APRA on its public cloud-first strategy, and the regulator will allow it to build on the cloud without having to seek approval on each individual workload.

> ALSO READ: APRA Updates Guidance on Cloud Computing Use by Regulated Entities (25 September 2018)

Outsourcing of banking IT infrastructure to the cloud tends to be much cheaper than the hardware and labour resources required for onsite development, maintenance, and operation. In addition to cost advantages, third party cloud services also introduce scalability, reliability, and efficiency benefits, while at the same time allowing banks to focus on their core business.

Banks have long delayed broad adoption of cloud services primarily due to concerns relating to cybersecurity. The NAB deployment uses a managed intelligent threat detection service that continuously monitors account activity for malicious or unauthorised behaviours to safeguard workflows and customer data.

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