Banking on a Digital Future with Legacy Update

A two-year roadmap to complete a comprehensive digital transformation at Bendigo and Adelaide Bank involves integrating a number of subsidiary banks and credit unions and replacing legacy systems.

The bank intends to reduce the number of core banking systems used by brands like Delphi, Alliance and Rural Bank from eight to one by 2024.

Marnie Baker, Chief Executive Officer and Managing Director, said, “We have made a great start to building the future over the last 2 years by significantly progressing our simplification, modernisation and digital transformation roadmap.

It has migrated from AWS to the Google Cloud Platform, becoming the first cloud-hosted retail bank in Australia. During 2020 and 2021 the bank has reduced the number of technology applications by 13% and provided capability for digital uploading and acceptance of documents by its customers.

It has plans for the 2022/2023 Financial Year to progress to a single document management and collateral management system, provide seamless customer onboarding and implement loan processing automation.

The bank also plans to reduce its number of applications to 325, down from 650 in 2019, having already cut 13 percent of applications over the past two years.

On its digitisation approach, the bank expects home loan approval wait times to drop to one day by 2024, compared to 22 days in 2019.

“Delivering and embedding digital capabilities to improve the experience for our customers as well as digitising and automating core processes, is a key part of our transformation roadmap, as is reducing complexity and costs,” said Baker.

Ryan Brosnahan, Chief Transformation Officer, said, “I recently heard Brett King say that the reason the world needs fintech is because banks around the world run on 1960s technology (mainframe core banking system) and are offering a 14th century based product (the bank account) which is protected by a 1st century security mechanism (a signature). He is obviously being provocative but there is an element of truth in this.

“We are in the midst of unwinding the labyrinth of technology we have and rebuilding it in a way that is digital first, run in the cloud, API enabled and driven by microservices.

“This approach also means we start to eliminate the disadvantages of being small as we can create brilliant propositions for our customers and therefore move faster and incur less upfront cost. For example, last year, we enabled our customers with the ability to sign documents digitally in 6 weeks from having the idea through to customers actually executing documents. We moved our entire workforce to working from home in 2 days at the start of Covid and in commencing our move to cloud based hosting, we moved our first 30 workloads to AWS in 30 days.

“We are focused on digitising the right experiences and interactions with our customers to make these interactions easier and more convenient. This focus on digitisation through an operational excellence lens enables us to remove friction, lower our costs, improve speed, consistency and scale for growth, while also being more productive.

“For example, in our home loan processing area we have improved productivity by 25% over the past year by; re-engineering our processes, cross-skilling our staff, and using data and analytics to focus in on and unblock bottlenecks to improve flow.

“We have simplified our business by: Reducing the number of our Technology applications we run by 13% (653 to 570) . We have established multi-cloud capability and have containerised our workloads in a way that we can easily move between different cloud providers, we have proved by moving workloads from AWS to Google in a few days.

“We have moved 10% of our target state technology applications to the cloud and for new and upgraded applications, we are implementing more than 80% of these directly to the cloud. We have recently deployed an API driven automation capability that has enabled us to reduce the time it takes to classify income and expense information that feeds into the credit assessment process from 77 minutes to 7 minutes per application.

“We have made a great start to building the future over the last 2 years by significantly progressing our simplification, modernisation and digital transformation roadmap,” said Brosnahan.