NAB tech team told to build now, mop up later

The new leadership team at National Australia Bank is determined to derive more immediate value from a long-running and expensive core systems overhaul, instructing IT to prioritise building its NextGen platform and worry about migrating off legacy systems later.

Newly-installed chief executive Andrew Thorburn and CIO David Boyle inherited a comprehensive plan to replace NAB’s technology legacy from the data centre through to networks and core banking systems, set to what has since been acknowledged as too ambitious a timeline.

“I understand the frustration and the concern that the market has had about what we've been doing and that it's cost too much and taken too long,” Thorburn told investors last week, whilst announcing a “very thorough external review” of the NextGen program.

NAB CIO David Boyle told the FST Media Summit in Sydney today that the IT team had been tasked with finishing the technical build of the NextGen core banking system as its first priority. 

The company has completed the technical build of its finance, risk and treasury systems, and also has a version of Oracle’s core servicing bedded down at subsidiary UBank, he said.

NAB today announced the build of an Oracle-based customer master called NAB View, which will effectively be NextGen's new CRM system. It is being rolled out to 4500 business banking staff over the coming months, and to other customer-facing staff further down the track.

Thorburn's strategy is to prioritise the build of systems from which new customers will see an immediate benefit, and leave the migration of existing customers to the core banking system to a later date.

In 2015, for example, the focus will be on the build of a new originations platform for its personal banking customers – the systems new customers experience when applying for everything from loans to credit cards, insurance or term deposits.

“We understand we have to migrate customers onto the new platform,” Thorburn told investors.

“We understand that we have to do business product origination. We understand that we have to retire legacy systems because that's actually going to take complexity and cost out of the system. But it's just a matter of doing some things that we know we can deliver, and as we get towards the end of that, then we will work out what the next bit is going to be.”

Thorburn’s plan vastly narrows the scope of delivery of NextGen when contrasted against what the bank’s former management set out to deliver.

The last time the bank gave an update – under former executive Lisa Gray – NAB promised investors it would be able to open all new bank accounts on the NextGen platform by the end of 2014. The existing books of personal and business customers were scheduled to be migrated onto the same platform within a further 12 months.

CIO David Boyle made no mention of customer migrations in his presentation today and when asked, wouldn’t commit to a timeline for when all NAB's customers would be banking on the same core system.

"There is still a plan to migrate and decommission legacy systems, but it will be a function of what we choose to deliver first on the new system," he told iTnews.

Migration work will be “interspliced” between the launch of new products and services as they become available.

Essentially, the bank doesn’t want to spend resources migrating existing customers to the new platform at a time of intense disruption and competition in the financial services sector, “because we need to continue to meet customer needs and grow our business,” Boyle said.

“The reason we built the new stack is to have a more agile and modern platform. We want to leverage it to compete in the market – use it to launch new products and change the way we do front-end originations.”

His schedule will be “very much driven by what is the priority for the business".

NAB View

Earlier today the bank announced it would begin rolling out NAB View - the master customer database component of NextGen – to provide NAB staff a single view of a customer's past and present products and interactions with the bank.

NAB View combines data from NAB’s retail and business banking, wealth and wholesale banking divisions to enable bankers to provide better advice to account holders.

Boyle told iTnews the Oracle 'customer hub' CRM system on which NAB View is based had been loaded with the transaction history of 12 million past and present NAB customers. 

NAB's bankers - starting with its 4500 business bankers - will access the system via a browser-based interface and secure network connection, enabling them to view customer data whether they are behind their desktop or out in the field.

"The more out and about they are, the more effective they are,” Boyle said. “The more time they are sitting in the office doing administrative processes, the less time they are spending with the customer."

Significant time will be saved getting newly-hired bankers up to speed on clients, and on existing employees undertaking administrative tasks like annual reviews or originating new business for an existing customer, he said.

Every customer-facing channel at NAB will eventually use NAB View. The rollout has been sequenced in order of "where we will get the highest return on investment."

Boyle said the new system should simplify packaging and cross-selling opportunities.

“If there's one thing that drives a customer nuts, it's trying to sell them something they've already got,” he said. “Your customers expect to be known. NAB View is about making it easier for the banker to see the full holdings of the customer.”

He expects the NAB brand to boast better net promoter scores as business banking and wealth customers warm to more personalised services.

 "When we get it right the first time, we don't waste our customers' time," he said. "Our customers have more important things to do. They are time poor like the rest of us.

“The word of mouth of customers is the best and most effective marketing channel we have."