​NAB looks at moving core banking to the public cloud

The bank has lots of customer data in the cloud, and its CIO believes it is more secure than having it live in its datacentres.

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The National Australia Bank (NAB) is diving head first into its public cloud-first strategy, making plans to not only shift a few hundred apps to Amazon Web Services (AWS), but also to consolidate all of its information into a single, real-time data lake as it lays the foundation for sending core banking to the cloud.

Speaking with media during AWS re:Invent, CIO at NAB Yuri Misnik, said his bank expects the cloud is where its core banking functions will eventually be run.

"We'll start to look at core banking in the cloud -- we expect it to happen, but it obviously depends on lots of moving parts and regulators, etc," he said.

See also: APRA advises regulated entities to manage risks when adopting cloud

When asked if there are some workloads that won't be moved to the public cloud, Misnik said NAB is being "very pragmatic".

"We will do whatever makes sense for us technology wise and business wise," he said.

"We have a lot of mainframe systems, our payment gateways mainframe, our ledgers mainframe, etc, and some of them will stay and we're actually quite happy with how they're run and where they're run and we'll extract them away with APIs and make sure others can access it.

"For us, it's not a top of the priority list to move -- although we are looking at some of the ledgers in the cloud and how we can use them and maybe do the migration. So that's my point with the core banking systems that might move, but not because of -- we don't have this obsession of moving stuff, we're doing it for the right reasons."

As it prepares for that capability, Misnik detailed that the data lake NAB is building on AWS, is also driven by regulatory requirements.

"We are a regulated institution and we have lots of reports and lots of analytics with our data, and right now it's actually quite hard to change, it's built in an old way, old-fashioned way, and it's expensive," he explained.

"Every time a new regulation comes in, every time a new requirement from APRA or Austrac comes in we have to do a lot of work."

NAB has consulted with APRA on its public cloud-first strategy, and Misnik said it gives the bank the ability to build without having to continuously approach the regulator for approval on each individual workload.

"We can essentially set up a framework and already have it, which allows us to move fast," he said.

NAB also wants to make data analytics easy by putting it all into the one place, which then also allows for the bank to introduce machine learning and artificial intelligence capabilities.

With Open Banking forcing Australia's largest banks to make banking data available from the start of the 2020 financial year, Misnik said NAB wants to make it easy to also open data up, not just easier to consume.

See also: NAB keeps its cool over Open Banking implementation

NAB is building all of its analytics and big data environments on AWS.

"We've built two services, one is called NAB Data Hub, which is essentially a data lake on AWS and it has full lineage -- the best thing for us is that we have full transparency for each data element and where it has come from," Misnik said.

"We have hundreds of systems and we're streaming all this data in real-time where we can -- where we cannot it's batch -- into this data lake and from this data lake we can take this data and effectively give it to data warehousing systems, give it to machine learning systems and train our models, we can pretty much slice and dice the data and aggregate it the way we want it."

It isn't just transactional data and data from its mainframes, however, with data soon to pour into the lake from customer phone calls.

"We are very actively piloting some of the things like Amazon Connect in our call centres, which will allow us to combine it with things like Transcribe and Comprehend where we actually use speech analytics and we can do it in real-time when the customer is calling us, we can actually understand what they're talking about, we can actually make some compliance points for our staff," he continued.

"We will also get insights, sentiment analysis, understand in real-time the customer.

"We'll generate much more data, not just transactional ... but we want to make sure we can match it all together effectively."

Prior to landing at NAB, Misnik was HSBC's CIO, based in London, after spending nearly three years at AWS as head of technology and also on the company's board.

Disclosure: Asha McLean travelled to AWS re:Invent as a guest of AWS

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