Dubai-headquartered banking group Emirates NBD (ENBD) is undergoing one of the most ambitious digital banking transformations in the world, with chief information officer (CIO) Miguel Rio Tinto at the helm.
The bank recently completed the third phase of its international core banking system upgrade, as it forges ahead with a Dhs1bn ($210m) plan to boost innovation and efficiency across its domestic and international operations.
With 14 million customers in 13 countries and assets of around AED 675.6bn ($184bn), the project represents a huge undertaking for Rio Tinto.
By end-2020, all ENBD entities and markets will be consolidated onto one single, updated core banking platform, enabling the bank to offer new financial services more rapidly across all markets while reducing global IT costs.
The global initiative is the bank’s biggest in its ongoing transformation, which entered its fourth and final year in 2020. The huge plan has already delivered many large-scale enterprise system improvements, such as the completion of one of the world’s largest Calypso upgrades to enhance treasury services; strengthening the bank’s global payments capabilities with a new payments hub; and introducing smartTrade for trade finance customers, while simultaneously building in-house cloud, agile, enterprise data, security and API-based architecture capabilities.
Rio Tinto tells Computer Weekly that he wants the bank to run like a “cloud native”. “If you look at how cloud-native companies have figured out how to manage technology in a completely different way,” he says. “We need to be like them. We want to emulate the technology, ways of working, infrastructure and security of the cloud-native world.”
Rio Tinto says that the transformation programme was set up at the beginning of 2018 with a three-year completion window. “If you try to spread this kind of transformation over five years, you lose momentum, the business loses interest and costs explode, so this is why we’ve targeted 36 months.”
“My team went to the board and said ‘we need Dhs1bn to do this and nothing must be off-limits, including infrastructure, application, architecture, ways of working, organisation, hiring and managing talent – you have to give us all the levers’. We got the agreement and we are now in the final leg of our transformation,” he says.
It has been an enormous effort and a challenging journey, with the organisation completely changed to adopt agile practices. The company is about 65% and 75% into its digital transformation cycle
“We still have some important milestones to achieve but by the end of 2020, we will be working and using the same technologies as cloud-natives and we will be comprised of 100% cloud-enabled, agile teams who collaborate with the business.”
To achieve his mission, Rio Tinto has a Dubai-headquartered technology operation of around 1,200 internal and external staff.
“We brought in managers from banks in Australia, Canada, the US, Turkey, Europe, India and Dubai. Half of the managers are new to organisation and over the course of 18 months, half of our engineers were also replaced,” he says.
The 1,200 IT staff are arranged into 60 different sets of “squads”, which directly collaborate with business units, including retail, wholesale and enterprise. “This is the crux of our working transformation, we want total collaboration and for the business to be embedded in teams. It’s no longer about ‘us versus them’ with IT and business – it’s all about the same team delivering on goals together,” says Rio Tinto.
In the bedrock stages of the bank’s transformation, ENBD created a large-scale product private cloud in the region using Google, Azure and Microsoft. This distributed cloud platform is at the core of the transformation and uses technology similar to that of cloud-native companies.
However, it can be difficult to apply continuous incremental improvements to traditional banking platforms, so banks are increasingly looking to modern, cloud-native infrastructure that can support open banking: API-driven business models.
APIs better position banks to integrate systems with external sources, such as third parties and fintechs to access next-generation technologies, and to deliver digital, real-time products and services for customers.
For its final transformation stage, ENBD is focused on executing a major application architecture transformation by enabling its APIs to be available externally as open banking APIs. “We are consolidating platforms and moving to the micro-services type of development so it’s a huge transformation,” says Rio Tinto.
ENBD’s cloud platform uses the Red Hat open banking solution, which combines Red Hat OpenShift Container Platform with data integration, API creation, and management capabilities.
Red Hat provides unified data integration, handles real-time data feeds, and makes the bank’s APIs available across internal systems, partners and other third parties, while helping mitigate security risks and protect sensitive data.
The bank’s shift to open banking supported by a cloud-native, microservices-based architecture is enabling it to externalise APIs that can then be used to offer new services like account updates via Amazon Alexa and WhatsApp banking – so customers can interact with the bank through chat to check account balances, request new checks, and perform many other services.
The platform also helps foster collaboration across the banking group’s internal teams. IT teams at the bank now have access to infrastructure and other resources for development through as-a-service models. Group-wide data storage and access are consolidated on the platform to enable real-time customer intelligence.
“At this stage of the transformation, you’re not just doing cloud, agility or data, you’re bringing all of it together,” says Rio Tinto.
The bank has learned from the mistakes of others. “We’re in a fantastic position to be one of the top five or ten banks to be fully transformed into a much more agile and cloud-enabled platform,” he says.
In his endeavour to make ENBD one of the most digitally optimised banks in the world, Rio Tinto has size on his side. “In terms of our size, we are at a sweet spot in pulling off such a transformation,” he says. “If you’re very small as a bank, you don’t have the funding to attract talent or scale. But if you’re a very big bank like HSBC, it takes a huge effort to mobilise all your entities worldwide.
“We’re currently big enough to have scale, but we are small enough to have everybody close,” says Rio Tinto. “I have everybody that I need really close to me.”