When Arvest, a regional bank operating in Arkansas, Kansas, Missouri and Oklahoma, hired Laura Merling as chief transformation and operations officer in 2021, one of the first things she changed was its digital transformation plan.

The 60-year-old bank, formed from the successive mergers of 14 regional banks, was planning to launch a neobank, an online-only service with national ambitions, as a way to ensure its future growth.

When Merling arrived in October 2021, Arvest had already begun the transformation process: conducting the first in a series of annual “Driving Change” surveys of staff attitudes and experimenting with the new core banking software around which it planned to build the new bank.

But there were challenges.

“Everybody was creating a retail neobank,” says Merling. That made for a competitive market in which the cost of acquiring a new customer was around $1,000. “You’d spend all your money on customer acquisition and not on building infrastructure,” she says.

On top of that, there was a degree of resistance — or at least indifference — to change within the company. Merling summarized the internal survey findings about staff readiness to change as one-third “Sure, I’m in,” one-third on the border, and one-third “I’m not really ready.”

It’s hard for staff to support change when it’s not clear what that change will be, she says.

Study, study, study

To get a clearer picture of where Arvest was, and where it wanted to go, Merling’s first moves were to commission one study of the company’s entire tech stack, and another of its data landscape. “We looked at them in parallel,” she says. “They’re related but also different: how easy is it to get to the data, and what data do we have?”

At the same time, she says, Arvest also conducted studies of its vulnerability to customer defection, and of the strengths it could capitalize on to build its new strategy.

“We did a lot in the first few months I was here,” she says.

The upshot of all that corporate introspection was a change in direction for the bank — or, rather, a return to what it had done best before. The plan for a neobank was dropped, and instead, says Merling, “We set forth a new mission. We wanted to be the leading community-focused bank serving commercial and small businesses.”

That didn’t mean the bank was turning its back on retail customers. By supporting local employers, “If you’re successful there, you’ll get the retail as well,” she says.

That meant building new applications and processes around its commercial loans — and making some changes to its core IT infrastructure.

A move to the cloud

A few months after Merling’s appointment, the bank announced a five-year partnership with Google Cloud as it prepared to digitize its contact center and move out of its two data centers.

“We can’t scale and be innovative if we’re just all waiting for on-prem,” she says.

Around this time, the results of the second Driving Change survey rolled in. Some of the transformation skeptics had drifted toward the “on the border” middle ground, but in the IT department — one of the first to see the clear direction as infrastructure changes began to take effect — resistance actually increased.

“It was all fear factor,” she says. “‘I’m going to lose my job,’ or ‘I don’t know this technology and I’m not going to get a chance to learn it.’”

Staff comments on the survey showed they didn’t feel their skills were valued, or even known, by management.

That prompted Arvest to create a program to help staff upskill or reskill. “We actually borrowed it from one of our partners,” she says. “They created it for their company internally.”

The upskilling program, called me@arvest, began in February 2022 with training for the IT team on Google Cloud as the company prepared to move its on-prem workloads there. “We needed people to know those skills,” says Merling. But creating the next wave of learning journeys took longer than planned. By the time it eventually happened in July, people were getting nervous they weren’t going to get the education, she adds.

The turning point was a full day of training around Google Cloud in November, with 500 people in the room and another 500 online. “We had our executives there, the bank presidents, the whole technology team plus,” she says.

Initially offered to the IT team, and later to operations staff, me@arvest will soon open to the marketing department.

Along the way, Merling decided to hire someone within the IT organization to run the program, which previously ran through HR. This plan enables her to meet the IT team’s skills needs up to ten years out.

A new purpose

One part of the original strategy Merling kept was the new core banking software from Thought Machine that Arvest had already experimented with — but now instead of redefining retail banking, it’s underpinning the modernization of the bank’s commercial lending processes.

“We’re basically rebuilding the entire technology stack for the bank by assuming a banking-as-a-service construct, whether we choose to use it or not,” she says.

By that, she means drawing on Thought Machine’s cloud-native, microservices-based approach, building new products and services that can be accessed through its APIs.

With the move to Thought Machine just beginning, the old core banking software won’t be going away just yet, so Arvest is using Google Cloud to deliver a single view of its customers. “It’s a key part of being able to serve customers going forward,” she says.

Merling brought in external help to stand up Google Cloud, training her own staff in parallel to ensure ongoing maintenance. “The Thought Machine work we did ourselves,” she says.

Under her transformation and operations umbrella are the CIO responsible for the existing core software, and the CTO building the new software. The development team was initially small, but is expanding through a mix of new hires and, as people learn new skills, internal transfers.

“My commitment to them was to make sure to bring everybody along for the ride,” she says. “I didn’t want to create an ‘us versus them’ situation. That’s super important to be able to grow the bank for the long term.”

Money talks

It’s a truism, but “90% of change management is communication,” she says.

To that end, each month she holds skip-level meetings with the second-level managers in her team, as well as “transformation talks” where the changes are presented to staff. Alongside the slow burn of rebuilding the banking core, these talks are also a chance to discuss “quick wins”: smaller technology changes that make a difference, such as the recent introduction of pre-authentication for customers calling the contact center. “That saved a minimum of 200 to 300 hours a month in call time,” says Merling.

Business Process Management, Cloud Management, Digital Transformation, Employee Experience, IT Leadership

Two decades of technology-driven transformation has left many financial services firms with significant complexity and technical debt. While banking and finance organizations have aggressively moved workloads and apps to the cloud to meet changing customer needs, some remain hesitant to tackle modernization of core infrastructure and systems, fearing a disruption to the business.

In a rapidly changing environment, IT leaders can no longer put off the critical modernization decisions required to ensure secure and resilient operations, which enables rapid innovation and growth.

“There is no option for banks to ignore the increasing complexity and technical debt,” says Nick Drouet, CTO and Distinguished Engineer, Kyndryl UK and Ireland. “They need to move quickly, and at scale.”

Modernization efforts, if not planned and managed carefully, can conflict with compliance demands. With the added challenge for IT leaders in the highly regulated financial services industry is that data security and business resiliency are unassailable business objectives.

“You know you can’t get things wrong,” says Drouet. “You have to be innovative, but in a secure way. That approach applies to all industries, but it’s a heavier burden in financial services.”

Extending modernization across the business

Modernizing core banking systems, some of which still run on on-premises mainframes, is a complex operation, one that Drouet compares to an archeological expedition.  

“You need to understand which applications are talking to others, what infrastructure is supporting those applications, where data is being stored, and what condition it is in,” he explains.

A migration strategy must demonstrate an understanding of core business processes to assure that the infrastructure will remain resilient and customer interactions won’t be impacted. For many banks, the end state may be a hybrid environment, where certain workloads and applications move to the cloud to increase agility and scale and other systems and data remain under the organization’s control on-premises, for regulatory reasons. In those instances, instead of moving workloads to the cloud, organizations can move cloud-like capabilities into the data center. For example, AWS Outposts runs on customers’ premises or edge locations using the same infrastructure, APIs, and tools as the AWS public cloud.

A modernization effort is often scheduled and carried out in waves. For example, one phase might include migrating VMware environments; another would address SAP applications. Kyndryl and AWS offer migration tools and services to plan and execute these steps at scale. These include a jointly established Cloud Center of Excellence and AWS Migration Hub, Database Migration Service, and Server Migration Service.

Cloud-enabled innovation

The benefits of cloud migration extend well beyond cost optimization and scalability. The cloud gives banking organizations the ability to take core processes to the next level, to build and customize new services and monetize data.

For example, a bank can use artificial intelligence and machine learning algorithms in an AWS data lake to study the way customers use a mobile banking app, why they visit branch offices, and when they make deposits. They can use those insights to create a highly personalized, multi-channel customer experience that increases both business volume and customer satisfaction. 

IT leaders at financial services companies recognize that cloud-driven modernization and innovation require an ecosystem of strategic partners and service providers, who bring a variety of skills and expertise. Since becoming an independent customer in 2021, Kyndryl has expanded its extensive knowledge of the needs of financial services organizations across on-premises and cloud environments. As a premier tier partner with over 8,000 AWS certifications, Kyndryl’s expertise with AWS solutions places Kyndryl as a leader in managing mission-critical, complex systems on AWS.

For its part, AWS has tuned its services to provide the security and resiliency that financial firms require, under the leadership of 500 AWS Professional Services (ProServe) financial industry experts.

Cloud-driven transformation can be daunting in highly regulated industries such as financial services. Working with Kyndryl and AWS can help IT teams execute a seamless migration without disrupting the business or its customers, while delivering the agility and scale to ensure innovation and growth.

Learn more about how Kyndryl and AWS are innovating to achieve transformational business outcomes for customers.

Cloud Computing

By Milan Shetti, CEO Rocket Software

If we’ve learned anything over the last few years facing a global pandemic, stalled supply chains, rising inflation, and sinking economies, it’s that change is the new normal in today’s markets.

In response, organizations have invested heavily in digital transformation. IDC forecasts that global spending on digital transformation will reach $2.8 trillion by 2025 — more than double what was spent in 2020.

As organizations amp up their digital transformation initiatives, which are critical for survival in today’s business climate, they must also consider how to modernize and migrate sensitive data and how it is managed and governed. C-suite leaders must have confidence in the data they have on hand to fuel business processes, deliver customer and employee experiences, and improve their operational analytics and insights.

Given the volume of data most organizations have, they need agile technologies that can provide a vast array of services to streamline content management and compliance, leverage automation to simplify data governance, and identify and optimize all of their company’s valuable data.

Ultimately, when evaluating automation technologies, your business needs software that will enable teams to move quickly and easily identify high-priority, sensitive data and to identify and remove redundant, obsolete, and trivial content (ROT) to remain compliant with complex regulatory demands. 

With organizations grappling with how best to streamline data management and compliance, there are four key considerations in doing it effectively.

1. Identification

Businesses need fast and accurate analysis of all their content. Organizations with content-rich processes should look for flexible and scalable automated solutions that can deliver a broad classification of content — reducing the chances of important information slipping through the cracks and allowing teams to quickly identify more types of sensitive data.

2. Action

To support compliance with a governance-first approach to content-rich process automation, businesses must be vigilant when it comes to managing the retention and privacy of documents. This is achievable by automating as much governance decision-making and manual processes as possible. Utilizing automation technology to automatically govern content-rich processes and eliminate mundane, tedious, and repetitive tasks, teams can eradicate many opportunities for human error and free up employees and resources to increase efficiency. 

3. Access

One of the biggest threats to a company’s sensitive data is accessibility. Easily accessible, less secure data is vulnerable to hackers and malware, which, if breached, can have catastrophic consequences for an organization. Teams must look for automation software that can set time and geography parameters around employee accessibility, deny access should a network be breached, and allow redaction across the entire enterprise. 

4. Lifecycle

To successfully manage the entire content lifecycle, businesses must have the ability to place content on legal hold, manage the over-retention of documents, and enable encryption at rest. Rocket Software’s Mobius Content Services platform  delivers this by not only allowing report management teams to encrypt and quickly put content on legal hold, but also providing storage reduction to avoid over-retention and ROT. Mobius can also easily integrate into many shared drives and collaborative platforms to streamline ROT and site auditing.  

With investment growing in digital transformation, organizations must stay competitive — and, for many, data is becoming the critical differentiator. By implementing the right tools now for data automation governance, organizations will be better positioned to maximize it and stay compliant. To learn more about Rocket’s content management solutions, visit the product page.

Data Management