Nationwide Building Society is in the midst of a multibillion-pound digital transformation that has already seen it embrace cloud technologies and agile working practices, as it works to re-platform its digital assets and services.
The firm has created a core, cloud-based platform that all of the products and services it offers to customers will eventually run out of, Nationwide’s director of mobile and digital, James Smith, tells Computer Weekly.
“It is a live, resilient, robust, hardened platform that we run production workloads through, that I would describe as being in scaled-pilot mode right now,” he says.
“While it is secure and resilient, there are some operational processes we are still refining from a monitoring and self-healing perspective that we still want to get right before we put more load through it.”
At the moment, though, the firm is running its mortgage switcher and re-mortgaging services through the platform, as well as a couple of its banking and sales offerings too, says Smith.
“Over the next six months, we will move most of our mortgage origination and banking [workloads] through there,” he adds. “Then we’ll start working on some of our other services, and our mobile banking apps will be in the crosshairs [for migration on to the platform] over the next 12 months or so.”
Addressing customer needs
The platform’s creation is part of a company-wide push, starting in Smith’s department, to improve the pace of development and quality of the products and services it brings to market, while safeguarding its ability to respond to customers’ changing banking habits.
The work is being delivered by a 250-strong team, with half working on readying Nationwide’s mortgage products for migration to the platform, while the remainder concentrate on doing the same for the rest of its banking services.
Within each of these branches are a number of smaller, cross-functional teams focusing on existing products and new features, as the firm has moved to embrace a DevOps-like way of working within the department.
“We’re trying to learn a lot from what other organisations, operating in other industries, have done as we build out the core platform and re-engineer the customer journey from the outside in,” he says.
Within the DevOps practitioner community, the advice often given to organisations that are just starting out is to tackle a small, but important, software project and use DevOps methodologies to revamp how it’s developed and delivered.
“We’re trying to learn a lot from what organisations in other industries have done as we build out the core platform and re-engineer the customer journey from the outside in”
James Smith, Nationwide
This is precisely the approach Smith is taking with the digital team at Nationwide, and is why it is working to incrementally add services to the platform rather than trying to move everything over at once.
“We are taking a ‘start small and build out’ approach, rather than trying to build nirvana, because otherwise we’d spend years trying to do that,” he says.
“When choosing what to move first, it was a multi-faceted thing, and we needed to strike a balance between something that is straightforward enough to make progress on quickly and meaningful enough that people would be interested in it.
“When we looked at our digital mortgage proposition, it wasn’t good enough, so we had a look for an opportunity to make it better, which is what we have done. The team has done a cracking job.”
Digital banking transformation
It is a journey many of Nationwide’s contemporaries are also on, as they seek to prevent their business models and market share from coming under attack by nimbler competitors from both the enterprise and financial technology (fintech) startup community.
According to Smith, though, Nationwide’s digital transformation is less about focusing on trying to outdo the competition, and more about taking proactive steps to ensure it is not left second-guessing about its customers’ wants and needs.
“Nationwide started 130 years ago, and it started with one aim in mind – to improve the living conditions of everyday people. And its purpose then was the same as now: to look after our members,” says Smith.
“We are the world’s biggest building society, and the reason we are successful is because we have kept changing and adapting to our members’ needs, while staying true to our core purpose.”
As an example of this, Smith points to the fact Nationwide was one of the first high street banks to offer internet banking services to its customers, back in 1997, before expanding into mobile banking services around seven or so years ago.
“We’ve done various iterations of both internet and mobile banking in the meantime, and they serve us very well,” he continues.
“But what we’re doing now is looking at what needs to be there in the future, and these are complex things to get right. So investing now in a core platform that will allow us to create those capabilities is what it is all about right now.”
“We’re looking at what [services we’ll need] in the future, so investing now in a core platform that will allow us to create those capabilities is what it is all about right now”
James Smith, Nationwide
And the fact it is cloud-based means the firm has plenty of room to grow and plenty of capacity to play with, as the number of customers who use its online services continues to spiral.
Over the course of the last 12 months, for example, the firm has seen a 40% uptick in the number of customers logging into its mobile banking apps.
“A bit of that is because the number of members we have is increasing, but the number of times they interact with our mobile platforms is rising too,” he says.
“So having a technology platform that allows you to scale and be agile enough to accommodate these types of changes really is the best position for any organisation to be in.”
Using cloud also gives the firm plenty of scope to experiment with new services or features, and Nationwide is far from alone in realising this, he says.
“If you look at the incumbent banks, there are a load of smart people with a load of ideas, and what we have at our disposal now is a set of technologies that increasingly allow people to execute those ideas rapidly with a relatively low, marginal cost,” he says.
“That means new ideas and propositions can be tried and tested, and if they don’t work you can them without a huge consequence. If they do, you can scale them very quickly, and lots of people have woken up to this, myself included.”
One year in on cloud
The firm is about “a year or so” into its journey to the cloud, says Smith, as it works towards downsizing the private datacentres it currently relies on to host its services.
“Once the current datacentres reach end of life, we would not expect to replace those with new ones, as we look to move away from running our own datacentres,” he says.
The firm is an avid user of Amazon Web Services’ (AWS) cloud technologies at the moment, but has not ruled out adding other suppliers to the mix in due course, he adds.
“We will be multi-cloud, and the exact flavours of public versus private cloud we will use, we’re still working on determining. It is about what is right for us, based on the workloads we want to run there, and the various idiosyncrasies of that particular workload,” he says.
“So for us right now, AWS is the right answer for our digital workloads as it gives us the ability to get going quickly, to scale, and there are a number of things you just get right out of the box that work really well for us from a digital standpoint.”
Whatever the next step is on its cloud journey, Smith says every decision his team makes is shaped by the fact people are putting their trust in Nationwide to look after the money they have worked so hard for.
“Customers understandably want to ensure their money is in safe hands, and that infuses through us as an organisation by making sure we’re putting in all the defences and measures to ensure their data and money is looked after,” he says.