NAB accelerates cloud migration

NAB acting CEO Philip Chronican

NAB has continued to slash its legacy application footprint and migrate systems to the cloud.

The bank today said that during the six months ended 31 March it moved 128 applications on to cloud services, with 198 of NAB’s applications now running on cloud infrastructure.

NAB has also dumped 192 IT legacy applications, 72 of them decommissioned during its first half. The bank has embraced a multi-cloud strategy, and has previously indicated it expects to move some of its core banking applications to Amazon Web Services by the end of 2019.

Over a three to five year period it expects 35 per cent of its applications to be running in the cloud, with 15 to 20 per cent legacy applications shut down.

NAB is midway through a three-year transformation program unveiled in late 2017. The bank said at the time it planned to shed some 6000 existing full-time equivalent positions (FTEs), while creating  2000 new FTEs in areas such data science, AI, robotics, automation, and digital.

Acting NAB CEO Philip Chronican told a half-year results briefing that the bank was “largely on track” with the program, achieving savings of $512 million. In total NAB aims to achieve savings in excess of a billion dollars by the end of the program.

The bank said it cut 627 FTEs during its first half as part of the program, bringing the total since FY17 to 2524.

“We remain on track for circa 6000 exits over the three years to September 2020,” chief financial officer Gary Lennon said. Total FTEs increased in the half, mainly reflecting increased temporary project and remediation staff as well as insourcing, he said.

Operating expenses were down 2 per cent in the half, with productivity savings of $122 million realised in 1H19, NAB said.

Tech and investment spend was up $99 million in the half, with increased spending on transformation, risk and compliance initiatives.

Reflecting the bank’s transformation efforts, since September 2017 product numbers have been reduced by 30 per cent, over-the-counter transactions have been reduced by 23 per cent, and call centre volumes are down 14 per cent.

NAB Internet Banking customers are up 11 per cent, with 21 per cent of NAB products now supporting digital origination (the bank has a target of 60 per cent eventually supporting digital origination).

NAB reported a statutory net profit of $2.69 billion for the half, up 4.3 per cent compared to the six months to 31 March 2018.