Replacing Bank Australia’s Lending Platform
Over approximately 18 months, 9Yards worked with Bank Australia to develop a strategy to replace its end-of-life lending platform, with the aims to:
- Improve customer experience (CX), automation and efficiency in the lending process.
- Implement a low-code/no-code solution that would support continuous improvement and enable integration of third-party services as required.
Bank Australia is the country’s first customer-owned bank with a mission to make a positive impact on people, communities and the planet. It employs approximately 400 people and has over 270,000 customers. Especially since receiving its B Corp certification in 2020, it has seen strong organic growth in the last few years.
While an uplift of its lending platform was on the radar for the bank, the impending discontinuation of its existing lending platform expedited the need to choose a new vendor and develop a strategy for implementation. As the bank’s growth in recent years has predominantly comprised of technically confident customers with high expectations, this became a great opportunity to not only replace the platform but also increase its capabilities.
Our digital transformation consultants worked with Bank Australia to develop the business case for the new lending platform, advised the team through the procurement process, negotiated commercials and contracts and provided advisory support to facilitate APRA compliance.
Guiding a comprehensive fintech procurement process
Following an exploration of current and target states, our first priority was to develop a business case to present to the board for a replacement platform that would support organisational goals to make a simplified process for customers, which, combined with greater automation and operational efficiency would decrease the “time to yes” on loan applications. The work also included the preparation of a “whole-of-life” cost model for inclusion within the business case. This was a new and innovative approach for Bank Australia, to estimate the cost to procure, implement, run and improve the platform for 4 years, rather than simply offsetting procurement and implementation costs against benefits.
Our proven experience of lending platform projects, including expertise in lending and technology, plus a deep understanding of Bank Australia’s current state of IT systems and preferred platforms, elevated confidence in the proposal.
We next completed a market scan, shortlisting candidate vendors that aligned to Bank Australia’s requirements. We developed a request for proposal (RFP) and consolidated vendors into two prospective pathways:
- Vendor-owned and maintained platforms
- Platforms with the ability to bring maintenance in-house
We gained executive endorsement of the shortlist, then ran demonstration workshops with the shortlisted vendors. Throughout, we held prospective vendors to rigorous requirements, from both a lending and business point of view, as well as their ability to comply with the highly regulated banking environment. Following this process, we gained board approval for our recommended vendor.
Finding a low-code/no-code lending origination platform for Australian banks
As an institution experiencing major growth, Bank Australia was in the position of building up internal technical capability, without wanting to undertake and maintain from-scratch engineering. It was a priority that they could integrate other platforms as needed, and have the ability to make continuous improvements without heavy engineering.
As such, we determined that a low-code/no-code product would be a likely solution, and these vendors made up the majority of our shortlist. It was during vendor demonstrations that the benefit of low-code/no-code was most apparent. We tasked prospective vendors to respond to a hypothetical situation of needing to add an additional qualifier to an application – if it were a covid lockdown, could we ask if their income has been impacted? If they answered yes, could they supply additional information.
While some vendors described weeks-long processes of change requests, proposals and ongoing back and forth, our successful vendor was able to demonstrate the fully functional addition in real time during the workshop.
Prioritising APRA compliance to meet financial service regulations
Attention to detail is a value we regard with utmost importance, and this is never more true as during contract negotiation and complying to industrial regulations. For this project, we needed to apply particular due diligence to ensuring our engagement was fully compliant to APRA CPS231, 232 and 234 requirements regarding material outsourcing, DR and IT Security respectively.
We were particular with our need to comply throughout the engagement: from the RFP, to the vendor interviews, to the ultimate contract negotiations.
Per Bank Australia’s policies, the process we had run and the contract we negotiated was audited to ensure compliance to procurement processes before contracts could be signed. The independent audit returned no action items (other than informing APRA of the intention to sign contracts, which depended on the receipt of these audit results), giving us total compliance to all requirements.
This strategic work has provided Bank Australia with the structure and framework to replace its lending platform with an efficient and customer-focused solution that will support the bank’s changing needs as it continues to grow.