Although the words "digital transformation" and "disruption" get overused, they are very important in the digital space that Australian financial institutions now find themselves in, according to Nick Giles, executive GM of IT Delivery and Availability at the Commonwealth Bank of Australia (CBA).
While the industry has focused on the smaller, more "agile" players emerging as fintech firms, Giles is equally as concerned with the threat the larger players pose.
"The digital gorillas -- Amazon and Google -- who perhaps haven't put their foot into the ring in a large way just yet, but we recognise that they can make that choice and they have very deep pockets," he said. "From our perspective, it's about how do we continue to be as relevant for our customers."
Speaking at VMware's vFORUM 2017 in Sydney on Thursday, Giles said fintechs do remain a threat.
"They tend to have a lot more agility, more innovation, and tend to kind of pick off components from our value chain and find nice little opportunities," he explained.
In a bid to stay relevant and avoid the disruption the other players might bring, Giles said CBA embarked on a major "next-generation" initiative in-line with the shift the bank is undertaking.
"CBA has managed to obtain a reputation around technology, and the way we did that was through a very traditional way of how we organise ourselves -- a fairly centralised model," he explained.
"I think we recognise that although that served us very well, the business and IT needed to get closer and we needed to find ways to get faster."
The bank shifted its operating model to one focused on platforms, similar to separate domains.
"It's about creating capability within those teams that can deliver differentiating outcomes, putting functions together," Giles added. "Not only is IT getting closer to the business, but the business is getting more intimate with IT. The digital platform, for example, has to move very fast than the more traditional IT areas."
CBA went live with One Cloud a few months ago, which is essentially a hybrid model that brings a handful of players such as Microsoft and AWS together, including a VMware combined solution with Dell EMC.
"We've long worked with VMware, we have a first generation private cloud, about 6,000 virtual machines on it, they've always been a go-to as part of our delivery model," Giles said.
"When we looked at what we call One Cloud, we were very conscious of there being a proliferation of clouds in the marketplace ... we were confronted with the question of how do we make the right decision."
Giles said the bank was cautious of making the wrong decision and therefore depriving itself of the ability to jump on new innovations as they came along.
"We landed on a hybrid model, not unusually, and when we looked at the market, certainly our experience to-date and the capability of VMware -- the ability to provision fast, operate in a low-touch fashion -- all made sense," he said.
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