Bank of Queensland to go 'all-in' on public cloud

Bank of Queensland intends to go "all-in" on public cloud and "exit its traditional data centres" under a plan taken to the bank's board for approval.

The bank revealed its intentions in a digital bank update slide deck [pdf] that was published to the ASX earlier this month.

Chief information officer Craig Ryman told iTnews that "strategically, we are all-in on the public cloud."

"Our intent will be to migrate everything to the public cloud as a starting point," Ryman said.

"There'll be some applications that won't have a return-on-investment [to migrate]; we'll ultimately want to retire them, and so we might have a few exceptions.

"But largely, we're all-in on public cloud and the vision I've got for BoQ is that we will be out of all data centres ... for public cloud."

The bank is currently in the midst of a core banking transformation with Temenos, which forms a central part of a $440 million multi-year transformation strategy unveiled in 2020.

It is building two related core platforms: one for its retail bank operations and one for its more complex business operations.

All retail brands - Virgin Money, BoQ and ME Bank - are moving to a Temenos T24 banking-as-a-service core.

Business customers will be served by a separate Temenos T24 core that is hosted on-premises in BoQ's private cloud environment, owing to the complexity of serving business users.

iTnews understands the business instance is ultimately scheduled to shift from private cloud to public cloud hosting sometime in 2023, enabling BoQ to fulfil its public cloud ambitions.

Core strategy

Previously, Ryman said, BoQ operated as a "portfolio of businesses", each with its own systems.

"If you think about what it takes to build an end-to-end bank for where we're at at the moment, it's about 40-odd platforms," he said.

The group considered that "the fastest way of getting to the highest quality result was to build a new stack and take the complexity of migrating our customers to that stack in full, as opposed to trying to renovate all of the complexity that we had piece by piece."

The core consolidation will see all of the bank's operations moved to one end-to-end technology stack.

"Simple retail customers - VMA, BoQ and ME - will have this end-to-end cloud platform. Our complex customers will sit on a different origination and a different core banking platform," Ryman said.

"But largely there'll be lots of integration [points], like an enterprise cloud-based data and analytics stack that'll be leveraged across the group, a common CRM and a common customer experience layer which will have data analytics leveraged to create personalised customer experiences, and that'll sit across business and retail."

Progress scorecard

On the retail side, VMA - Virgin Money Australia - and BoQ Retail are both now in the cloud-based core, as of April.

"Virgin's been about 15 months and BoQ [retail] less than six months since we've gone live," Ryman said.

He said the group was buoyed by the strong response from customers. About 4 million transactions have already been processed through the core, and the bank has indicated that it is attracting a younger customer demographic.

Ryman said “with very little marketing” the Virgin Money and BOQ brands are “just about to approach $1 billion dollars in deposits”, proving “customers are voting with their feet" to migrate their accounts across to the new core.

"I'm super proud about what the team's achieved," he said.

Still, there is more work to do.

ME Bank, acquired by BoQ in February 2021 for $1.3 billion, is next in line to be migrated to the Temenos cloud-based platform.

"What I'm looking forward to is, in the next 12 months, getting all three retail brands on this stack, getting lending on this stack, commencing our business bank transformation, and plugging in our data and analytics capability," Ryman said.

"I think we're going to see material benefits start to flow from that, showing up even more so in our business performance.

"This is a transformation that takes courage because as you could see by building it this way, we're taking all the costs of building all this new tech - the additional run costs of having yet another whole new end-to-end bank that we're running.

"We don't really get the significant benefits until we get lending on the stack and until we get material customer migrations on there that really enable us to show more of the tech transformation in our business performance results."

Ryman said he’s also excited to bring improved technology to BoQ employees as they’ve "not had the most contemporary tech to work with” before.

An ultimately end-to-end cloud and digital stack would “make a difference to their day-to-day jobs," he said.