NAB nears finish line in core banking overhaul

National Australia Bank has marked the completion of its core banking overhaul rollout with the deployment of the final foundation piece in the program, last week setting live its new originations platform for personal banking customers.

The deployment caps off seven years of work trying to modernise and streamline the way customers interact with the bank when applying for everything from loans to credit cards, insurance, and term deposits.

NAB originally intended to build a mortgage origination platform in-house, starting with its UBank subsidiary.

But it decided to dump the effort in favour of Oracle products after finding the homegrown platform would cost too much and not deliver the functionality it wanted. It ended up writing down $106 million from the development in late 2014.

The bank started deploying the personal banking originations platform instead this time last year as a replacement for its highly customised Siebel platform. The project formed part of its wider Oracle-based 'NextGen' core banking transformation, which has been running since 2009.

NAB core banking general manager Andrew Cresp revealed the platform had, as of last Friday, been deployed to the bank’s 900 branches, covering 800 employees and 8 million personal banking customers.

Cresp said the bank’s initial goal had been to “fundamentally change” the way its customers deal with the bank for mortgages.

But the nature of the bank's offerings - which often involve bundled products - meant the net had to be cast much wider.

“While the prize was mortgages, we also had to to do a lot of other stuff to get there - like transaction accounts, term deposits, credit cards, and personal loans - because we have so many customers who want to bundle a whole lot when they come to us,” Cresp told the Oracle OpenWorld conference in San Francisco this week.

A rocky road

The path to go-live has not been a smooth one. NAB started rolling out the platform in South Australia and the Northern Territory in August last year, but didn't reach its next destination of Western Australia until February this year.

"We did a big software deployment - 48 Oracle applications connected into our [suite of] 250, lots of changes into the ecosystem, lots of fun and intensity," Cresp said.

"Our simpler products were working well. But we had some challenges with mortgages."

His team discoverred that despite "extensive testing" with an offshore team in Chennai - where they "got all of the bugs out of the 50-step process" - NAB's local bankers weren't using the system in the same manner.

"There was one function in the process called edit submission, we thought that would be used about 5 percent of the time," Cresp said.

"In SA we found it was being used about 95 percent of the time. Which was a bit of a challenge for us. The mortgage part was 55 percent of our build effort."

The bank also had some issues with training users in SA and NT on the new platform: Cresp's team didn't have the funds or resources to send out staff to physically train bankers, and were instead forced to resort to videos, which end users struggled with, compounding the issues.

So NAB’s technical team was told to do whatever it takes to solve the problem, with a directive of “think unconstrained”.

“Ignore money as an issue, ignore Oracle resourcing as an issue, ignore everything - what do we need to do to close that gap so we can get to WA when we need to?” Cresp told his staff at the time.

His team's response was that they needed to significantly speed up the rate at which they ship changes, to once a month rather than every three months or 12-to-18 months for big updates.

“So we went into SA and NT and cleaned up the mortgage problems and iterated every four to six weeks,” Cresp said.

Now that the system is live across the country, the bank claims it can approve a personal loan for an existing customer in four minutes, and in 11 minutes for new customers.

“It has had game-changing outcomes for us,” Cresp said.

“If you’re approving loans in four minutes, people aren’t shopping around, they’re getting that money in their account.”

End of the road - almost

The deployment of the originations platform ticks off the final item in the bank's wider 'NextGen' core banking transformation, with the program's two foundation pieces both now in production.

The other is NAB View, a customer master database that lets bankers see a customer’s entire relationship with the bank on a single screen. The system was deployed last last year for business banking customers.

It replaced a 40-year-old IMS database that Cresp said was "really efficient" but couldn't handle things like email addresses or gender.

However, the bank hasn't quite yet crossed the finish line in the NextGen program - it still has to tackle the migration of business customers to the originations platform, and the shift of personal banking customers to NAB View.

The bank has no specific timeline for the migrations, Cresp told iTnews. Rather, it has decided to take an incremental approach based on the areas of highest value to the bank.

NAB has previously said it expects the NextGen program to take 10 years to complete, which would bring it out to 2019.

Digital driver

Along with the customer migrations, NAB's focus will now also be on providing digital self-service add-ons for customers, and plugging in automated processes more widely across the business.

“Because we’ve done it end-to-end, we haven’t just done the CX [customer experience layer, we [can] provide customers [things like] SMS to say ‘you can upload your [credit] documents or authorise your contracts now,” Cresp said.

“There’s a far greater intimacy in the process, and it’s automated.

“[And] we’ve surprised some people in the business, which technology people in organisations don’t do very often.

"They say ‘we want to have that SMS thing as well’ and we can say ‘yeah we can just plug it in’ because we’ve done the hard yards.

"It’s time to take advantage of that.”

Allie Coyne travelled to OpenWorld as a guest of Oracle