Kiwibank: Building a better bank for the future of New Zealanders

The first step was to ground the aspirations in a strategic roadmap. Kiwibank executives set about translating their vision into strategic objectives, drawing inspiration from other organizations globally that had successfully completed such transformations. As they considered the options, Kiwibank made a pivotal decision—to embark on an ambitious plan to improve and thin out its legacy tech to add value and improve customer and team experience, while simultaneously building a new tech stack to the side, leveraging modern, cloud-based capabilities including a new core banking platform. Doing both meant over half of the current platform is being remediated or replaced at once with a significant shift to a cloud native tech stack.

“Our aspiration was to not try to predict the future but instead create a flexible platform, experience layer and ways of working that enables us to quickly adapt to deliver on our purpose. Customers today are asking all of us ‘to be where they are,' and seamlessly work with lots of channels. This makes the back services, APIs, and data a top priority to sort.”
– Hamish Rumbold, Chief Digital and Technology Officer, Kiwibank

Starting the “acceleration to side” enabled Kiwibank to learn fast and fail safely without undermining its banking operations, including the team and customer experience. Implementing new capabilities outside of its current stack gave Kiwibank the opportunity to become an early adopter of new cloud technology, learning and working with the software as the bank leapfrogs its way to a best-in-class technology stack. These new capabilities are now being used as the modern foundation to accelerate the replacement of its current stack through the coexistence and migration of workloads and customers over time.

“To get off paper quickly and focus on delivering working software, value, and paying down known unknowns early, we adopted a two-pronged approach. Firstly, we prioritized focusing our existing teams on the current stack to ensure their full attention on essential tasks such as enhancing customer experience and organizational value. Secondly, we formed a separate cross functional team dedicated to swiftly establishing the new stack, allowing them to work independently and efficiently without impeding the rest of the organization. These teams have now come back together.”
– Hamish Rumbold, Chief Digital and Technology Officer, Kiwibank

Kiwibank’s transformation is as much about evolving mindsets and expectations inside and outside the bank as it is about replacing legacy technology. Working with McKinsey, Chief Digital and Technology Officer Hamish Rumbold has built an in-house team of top-quality engineers, architects, data scientists, and product owners who are well versed in agile ways of working and now work in cross-functional squads partnering ("two in a box") with other key areas of the business. This has improved the bank’s internal capabilities, speed, and quality of change.

The bank is now deep into its transformation. Several key foundational technological elements have been delivered that have driven better team and customer experiences, operational efficiency, and are now enabling much faster and safer change. As it confronted difficult decisions, the bank has been deliberate about trade-offs such as co-existence risk, time to value, and migration risk. There are still challenges to address, but with a new mindset, the right team, and new tech, Kiwibank has the strength and confidence to finish the job.