Anne Boden joined Allied Irish Bank (AIB) in July 2012 in the newly created position of chief operating officer...
(COO). As a member of the leadership team, Boden (pictured) has responsibility for the bank’s transformation agenda and cloud technology is a vital part of the plan.
AIB is a universal bank, mostly operating in retail within the Republic of Ireland, but also in Northern Ireland and the UK. AIB’s mission is to focus on returning to profitability by 2014 and playing a central role in the recovery of the Irish economy. Its strategy has undergone a recent revision and the key to helping it meet its goals is cloud technology.
AIB’s strategy has three major elements.
At its heart is a renewed commitment to customers – who range from retail clients to large corporate customers – by becoming more efficient so staff can spend more time with customers.
Another goal is income growth and cost management measures to help AIB achieve sustainable profitability. Cloud again will have an impact by being part of the bank’s cost reduction plan. Strong and inclusive leadership, with individuals who have the right experience and knowledge, will oversee the transformation – and Boden is a key player.
Emphasis on technology
A fresh emphasis on technology and innovation is a crucial commitment, and the promise is in the future, customers will have even more choice in the range of ways they can bank with AIB. The bank is committed to using technology better to meet the evolving needs of customers who want the flexibility to interact through different mediums, whether online or over the phone.
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Boden is well aware of the challenges the banking sector faces and the changes that need to be made to respond to the high and increasingly demanding expectations of customers and the flexibility this needs.
She has lived through the ups and downs of the banking sector, but now more than ever she is conscious that banking must embrace the digital age and put its customers first.
“AIB is the biggest of the two pillar banks in the Republic of Ireland, and is going through a huge transformation which is about becoming digital and better serving the client. We are focused on reducing cost and delivering huge value to the client by becoming a digital bank and delivering product in a timely manner. Cloud is part of that strategy of change in an evolving market,” says Boden.
AIB has chosen Oracle technology to develop a private cloud to give internal technological ability and flexibility in development, to respond to a changing and demanding market, with many pressures.
“Since the banking crisis, banks are more heavily regulated and revenues are under more pressure, while clients’ expectations have grown as there is evolving use of new technology in the devices they have with them every day. They want to use new technologies to interface with all their business partners, and the most important business partner for many people is their bank,” says Boden.
Responding to this demand is essential in the digital age, and she says that by using a private cloud implementation, the bank is in a better position to react.
“The cloud implementation allows us to bring products to market quickly, consolidate technology and to provide higher availability to clients,” Boden says.
A consolidated stack
The legacy servers have made way for a new estate, where the entire stack is based on Oracle for improved integration, consistency, and resilience, and some of the figures give an insight into cost savings (see box, below).
“As COO, I am charged with responding to the business environment, reducing cost, increasing flexibility and responsiveness,” she says.
There were lots of different technologies and environments as each was specific to a requirement or an application. By moving to a private cloud implementation, we estimate saving 10 days per database over a year. Everything is much simpler.
Anne Boden, AIB
AIB’s private cloud programme has meant a tenfold reduction in the number of Oracle databases. The bank has always had Oracle databases, but prior to the programme, it had different sets of hardware and technologies to support them.
The decision to introduce a consolidated stack was made on the basis of simplification and efficiency; and was weighed up against any reservations about vendor lock-in.
“The whole offering has been simplified by having one vendor to call if there is an issue within the private cloud, and we are already getting the benefits,” says Boden.
Now, effective communication about the possibilities the private cloud has introduced is a priority to promote speedier development and responsiveness. This means a change from the historic mindset, which was impeded by a less responsive legacy estate.
“We are pushing internal marketing of the private cloud to make people more aware of it. When people worked within the old parameters, they planned slowly. Now we can move at the pace of the digital age and have to encourage people to do things quickly because they can,” says Boden.
She says this is important for the banking industry and is key to kick-starting the economy. The new private cloud enabled an application to be launched and delivered to the SME market within eight weeks – something that was previously not possible.
Measuring the success of AIB’s private cloud
Since introducing the private Oracle cloud stack, the savings and efficiencies gained by AIB are best exemplified in figures.
“We have reduced production databases from 80 to 8; and we have reduced test databases from 250 to 25. We have consolidated the beast,” says AIB chief operating officer Anne Boden.
Crucially, the knock-on effect is that AIB has reduced the average lead-time to introduce new databases from 10 days to two.
“Prior to this, if the business required a new development or production environment and we had to create it from scratch, it would take on average 10 days. Man-days of effort have been reduced from five days to half a day,” says Boden.
Another management cost saving has been in reducing the number of suppliers. “Our traditional environment had lots of different technologies and suppliers, which meant many teams involved and the associated coordination. We had three teams before and now we have only one team, which means operational efficiency gains,” she says.
The legacy estate was time consuming and inefficient. “There were lots of different technologies and environments as each was specific to a requirement or an application, which meant lots of different patches across lots of different technologies. By moving to a private cloud implementation, we estimate saving 10 days per database over a year. Everything is much simpler because in the old environment, we had a different physical infrastructure per requirement,” says Boden.
Instead of having separate databases for each application, all databases are now in the private cloud, so AIB can expand or retract within the environment depending on the requirement of the application.
“We can manage the upscaling or downscaling as a whole across all applications; and as soon as we want a new application, we can put it up quickly,” says Boden. She says this is just one part of the many things AIB is doing to make the organisation more agile and responsive.
“SMEs need to be given credit, and it is a challenge to get that credit they need to them,” says Boden.
“In the old world, at the start of an idea, we would embark on a waterfall methodology of development and a production and development environment would add an extra two to three weeks. There would be many stages until the desired application was delivered. Overall, we have reduced that entire cycle time by 20%.”
The organisation has benefited from the improved rate of development, and Boden says she has received positive feedback from colleagues within AIB.
“Business partners have been surprised at the level of responsiveness. IT is on the front foot and technology doesn’t hold back the business in any shape or form; IT is able to work with the business as a responsive partner,” she says.
A bright future
Boden predicts a bright future for the bank’s private cloud over the next five years – whatever unforeseen changes the market throws at the sector. “We will use private cloud more and more over the next five years to be proactive,” she says.
Private cloud is one flavour of cloud; and although Boden does not rule out public cloud technologies, it is not part of any current plan. “We don’t rule out public cloud technologies eventually for certain requirements. Private cloud is a way into public cloud, but all our efforts and development of big technological change is focused on our internal cloud environment,” she says.
Major vendors have invested money and development time in the cloud, alert to all its business possibilities, and it is natural that an organisation such as AIB should think, “Why don’t we use cloud internally to become more cost-effective?” says Boden.
She believes that cloud development will inevitably increase within organisations, even those that have been traditionally viewed as more conservative.
The security question surrounding cloud use is less of a concern and Boden says if anything, cloud has increased AIB’s security.
“Cloud technologies were built for public consumption with the best authentication, security and encryption technologies. The fact we are using cloud within our firewalls means that cloud is bringing even more security to our environment,” she says.
The banking sector is traditionally viewed as conservative because of the level of regulation and security necessary. AIB is aware of these responsibilities, but it sees technologies such as cloud as a key part of its transformation programme to make it truly part of the digital age.
“I think we are ahead of the pack. AIB is a very innovative organisation, which is very technically and commercially able. We have the skills necessary to take the technology and make our goals happen because we hire the best employees to take AIB forward,” concludes Boden.