Heritage Bank welcomed a new CEO in November 2015, with Peter Lock moving in to change the way the member-owned bank thought about technology.
Speaking at Red Hat Forum in Sydney on Wednesday, Heritage Bank CIO Wayne Marchant said Lock started the organisation's transformation by bringing in a new management group, of which he is one.
"We took a view that if we were going to answer digital change that we knew was coming into banking, we had to take our bank, which is very much a physical bank with a bit of a digital presence, and change it to be a digital bank, but still with that physical presence because we think that branches are an important element," he explained.
"But being digitally aware and digitally able was really important."
Marchant said the IT team needed to be "significantly" transformed.
"We were very old school. Very old school development, very old school tools, so we decided that middleware was really where we had to start -- we had to make things fit together because everything was way too slow, it was too slow to make changes, too slow to integrate, too slow to implement anything. And we're talking not months, we're talking 18 months to do things -- it was just way too long," he continued.
"So we knew that starting with that middleware was going to make a huge difference to our business."
The hardest part about the transformation, Marchant said, was to change the people and their thought processes.
With a lack of in-house open source skills, the CIO described the challenge as difficult,
"We didn't have the processes, we didn't have the technology, we didn't have any skills in this space, so we had to make significant change," Marchant said.
"We chose Red Hat because we knew Red Hat across our stack could do almost everything that we needed."
Heritage then adopted a different approach to delivering major IT projects via a new methodology introduced by Red Hat.
The idea behind the Red Hat Open Innovation Lab is to bring in everyone that's involved in a certain project into the one environment that is charged with fast-tracking progress, delivering what Marchant described as incremental benefits along the way.
"We chose the open innovation labs because we knew that they could fast track that change for our business and they could assist us in a huge change in a very short period of time, and bring our staff not only on the change in the technology, but the agile journey as well, which was something brand new to our staff," he explained.
Marchant said the bank brought the business along for the ride, not just IT, which included senior executives and the board.
"Everybody could then see the massive change and the speed of delivery change that we could do by delivering agile without the technology even, just by changing the way we did things, and then by including the technology and the massive change we could make to our business," he continued.
The CIO said there was a lot of training involved in setting up the innovation lab, including Red Hat courses the bank had purchased for everyone at the lab to use.
"They spent a lot of time doing e-training courses to make sure that they got the skills that they need and they were able to then, as they were developing, go back to that training course and teach themselves something if they didn't know how to do it," Marchant said.
One example out of the innovation lab is the development of a solution for a realtime payment requirement, which Heritage said had taken years using traditional methods. The Red Hat process delivered a working prototype within 10 weeks.
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