Banking on serverless at NAB

The Australian bank is shooting to become a financial services institution enabled by technology: according to NAB's executive GM for infrastructure, cloud, and workplace, it isn't about whether the bank uses cloud or not, but what cloud enables that is important.
Written by Asha Barbaschow on

The National Australia Bank (NAB) is one of Australia's largest financial institutions, and like any organisation over 160 years old, the bank has a history plagued with legacy IT equipment and traditional ways of working. Couple this with the organisation working within a heavily regulated space and innovation isn't the first thing that usually comes to mind. But NAB is trying to change that.

Around five years ago, the bank turned to Amazon Web Services (AWS) for assistance, starting its multi-cloud strategy with the cloud giant. Since then, NAB has laid the foundations to move its core banking function to the public cloud.

The shift to cloud, said NAB executive general manager for infrastructure, cloud, and workplace Steven Day, was driven by the "usual" benefits of cloud -- moving with speed, procuring servers quickly, taking the mundane away from developers, keeping customers happy, and reducing cost.

"[When] a server is needed really quickly, the time to order one, have it racked and stacked in a data centre, have all the operating system loaded on it, having all the other controls in place and open to a user, can take months," Day explained.

"So the attractiveness of being able to turn up a server in five minutes has driven a lot of companies to start playing with cloud, which is what happened at NAB," he added.

"That was constantly built on, a lot of the digital-type applications went across onto the more traditional server-based cloud environments, and then it got to the point where cloud became mainstream and we started to look at what the opportunities were to use some modern architectures to improve the reliability, the agility, and the cost structure of our IT solutions."

The serverless journey

With the bank doubling down on cloud, Day isolated serverless as being a very large part of its future. NAB started on its serverless journey a little over 12 months ago.

Serverless lends itself very well to a microservices architecture, which Day said has allowed NAB to create a "very agile environment" -- one where developers are building and performing change on very small components. This is far removed from the old situations that organisations like NAB previously found themselves in, where it was difficult to apply change to monolithic solutions.

"All of the systems are very tightly coupled, so if you touch one environment, you're very likely to break something across a very large blast radius," Day said of the pre-cloud era.

"With serverless you can create very small micro-architectures where you have these small functions performing one particular task, and if that task fails, then it's decoupled enough from the rest of your environment to make the impact of that failure very small. It allows you to work very quickly in an agile way, and it also lowers your cost because you're tending to do things at a very small scale, rather than a large one, which is always expensive."

AWS Lambda, the serverless computing component of Amazon's AWS catalogue, enables developers to execute arbitrary code on demand without the need to provision or manage a 'full' server, or a computing instance like Amazon EC2. This has allowed NAB to prioritise 'enablement'.

Must read: AWS Lambda, a serverless computing framework: A cheat sheet (TechRepublic)

"One of the things that serverless brings is an event-driven architecture: in AWS you can trigger a serverless function based on a whole lot of things happening in the cloud environment," he explained.

"For instance, somebody launching a new cloud environment can trigger Lambda -- why is that so cool? Well, because what we can then do is we can create some really great compliance tools, so we have our continuous assurance tool, which is all driven by serverless."

What that means is, if a developer tries to put something into service, there are handfuls of continuous assurance tools that probe the source code before it goes live.

NAB's Deputy Service, which is also driven off compliance, similarly performs checks. An example of these checks include determining what the source code looks like -- specifically, if the source code is meeting the bank's requirements.

"By having all of these things triggered in a serverless environment, so when you try and put them in they're automatically checked, it creates a high level of certainty around the fact that everything we've done, we've done properly," Day said of ensuring compliance.

Some of the bank's business lending components also use Lambda, but Day stressed that NAB isn't losing sight of its multi-cloud strategy of ensuring that what it does send to AWS doesn't leave it with a vendor lock-in situation.

See also: 5 ways to avoid vendor lock-in (TechRepublic)

"In the old model it became very easy to get entangled with one vendor ... we just want to make sure that everything we do in the future enables us to set our own future strategy so that we're not tied into a particular vendor," Day explained, noting that NAB is looking at how it can make serverless functions more generic.

"I think we've really got to do some more work on that before we start to deploy our major applications at scale across that -- into a serverless environment," Day said.

"[Serverless] is not a silver bullet: like anything, there are different applications that are suited to different environments, but serverless is definitely a very large part of the way forward."

Reshaping the workforce

Another benefit, Day said, is it creates an attractive environment for developers.

"They see this really dynamic environment that they work in where they can create things, and they're not bound by this huge amount of governance and red tape that would be typical to a monolithic application," Day told ZDNet.

In late 2017, had announced plans to cut a total of 4,000 jobs from its workforce; 6,000 roles were impacted as the bank "further automated and simplified" its business, with 2,000 new jobs to be created as a result of the restructure.

A week later, the bank unveiled its plans to begin immediately hiring more staff, telling ZDNet it was seeking 600 technology specialists across software engineering, data, architecture, and cybersecurity.

The recruitment drive was part of NAB's plan to reshape its workforce and create up to 2,000 new jobs by 2020.

"We are improving the experience of our customers, reshaping our workforce, and growing our bank in an environment of rapid technological and regulatory change," former NAB CEO Andrew Thorburn said at the time.

According to Day, the bank's refocus is welcomed by the board.

"Part of it is a realisation that monolithic applications are costing us a lot -- not just in terms of financial benefits but in terms of resilience and the impact to our customers," he explained.

"We have really major outages from time to time, where we lose an entire service -- we might lose internet banking, we might lose something else -- and that's because of the monolithic style of the application. So when our senior leaders and our board are looking at the risks associated with this, they're really challenging us on how we lower the risk, and one of the obvious solutions is to decouple our environments so we minimise the blast radius of any particular failure and therefore contain the impact of that failure."

Day said such a proposition, which also provides a more cost effective way to get these services into production, is very attractive to senior leadership who are looking for better and more reliable solutions for customers.

Attempting to further combat the skills shortage, NAB also launched the NAB Cloud Guild, an internal program that offers AWS skills training.

As NAB approaches having 500 staff accredited through the NAB Cloud Guild, senior leadership are also undertaking training, specifically around the business side of cloud. Cloud economics, how cloud can contribute to innovation, and machine learning are some of the main topics, Day explained.

"We really saw there was a gap there, so this was an opportunity to bring them into the fold," he said.

According to Day, the benefits of going serverless have already been realised.

"The speed -- we always knew [serverless] would help us -- is combined with the level of excitement that you're getting out of developers in the fact they can develop things. We've also got this serverless compliance asset, where we've decoupled all of the auditing they'd have to do in a manual way -- all of those checks are now being made invisible to developers, who are delighted by the fact that they can get on and do coding."

"What we have been able to do is move NAB into a pretty exciting place to be if you're a cloud developer, and I think that's probably the best benefit that we've got out of the entire solution," Day concluded.

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