Original text here from Patrice Bernard (LinkedIn)
On International Women's Day, the Australian bank NAB highlighted the career of the CEO of its digital subsidiary, offering a glimpse into its strategy for combating technical obsolescence—a strategy that could well inspire other financial institutions worldwide.
Shortly after its inception in 2008, Ubank served as a trailblazer for its parent company when it sought to replace its aging core system. Instead of risking a "big bang" overhaul—which over the years had shown to cause significant disruptions at the slightest mishap—the bank opted to first implement the new solution within a limited functional scope (covering 300,000 customers at the time) to test it under real conditions before rolling it out broadly.
A dozen years later, following Philippa Watson's appointment as head of the organization (and its 600 employees), it became clear that the existing infrastructure could no longer adequately meet the continuously evolving needs of customers. The acquisition of a struggling "pure" neobank, 86400, whose technology platform seemed optimal, then presented an ideal opportunity for a second wave of modernization.
The integration process began in May 2021. For eight months, the two entities operated in parallel until the migration of all clients and products—including payment methods, budget management, savings, and mortgage lending—to the target platform, which was completed smoothly and has since shown sustained growth and ranks at the top in customer satisfaction surveys.
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NAB's experience is particularly noteworthy for three reasons. Firstly, it reflects an awareness of the rapid accumulation of technical debt within a financial institution. While most firms in the sector cling to outdated components that struggle to keep pace with transformations, Ubank clearly recognized the risk of lagging behind the expectations of the younger generations it primarily targets—and took concrete action before facing the daunting dilemma of the prohibitive cost of late modernization.
Secondly, the shift in foundational banking strategy is interesting: while the first iteration relied heavily on commercial software (from Oracle), the real core of the second iteration is its customer experience engine, which is highly flexible and expandable, and was developed in-house. This shift acknowledges that true agility is unattainable without full control over one's destiny.
Finally, the relatively short time frame in which the merger was executed demonstrates that a decision made without undue pressure but with anticipation of accumulating issues can control both the budget and the risks of such a transition. Moreover, regularly undertaking major projects at close intervals (considering team turnover) helps maintain a knowledge base that eases the task.
In conclusion, Ubank and Philippa Watson provide an excellent example of the value of a proactive approach to managing information technology obsolescence, a far cry from the ostrich-like behavior often encountered in the industry.
