Modernizing core technology isn’t as simple as swapping out the old with the new, or unplugging an application from one system and plugging it into another. An established organization with deep roots like Scotiabank—unlike a startup—must strike a delicate balance between innovation and maintaining the business so that customers can continue banking seamlessly.

"Think of technology spend as an iceberg,” said Ali Razavi, Senior Vice President & Chief Information Officer, Canadian Banking Technology at Scotiabank. “Innovation is about chipping at the bottom of this iceberg to make it lighter so that ultimately you’re freeing up technology spend for where it truly matters.”

In the technology world, this means chipping at the stale parts, such as removing duplicate systems. Or it can mean decomposing complex networks of obsolete, intertwined, and interdependent components. Over time, the lighter iceberg frees up technology budget for customer- and revenue-focused investments that can give the Bank a competitive advantage.

One example of this has been the multi-year modernization effort on the retail credit application that processes no fewer than 200,000 customer credit offerings and products at Scotiabank each year. Originally built more than two decades ago, the application serves multiple areas of the business and has over time grown tentacles linking it to 11 different products across the Bank.

The goal was to remove the complexity and bring in modern technologies, making the Bank’s core technology nimble to accommodate change and improvements that enhance the customers’ banking experience, while simplifying internal processes.

“We deconstructed this modernization project into meaningful chunks and addressed them one at a time,” said Razavi. “As a result, over the past three to four years, various parts of the retail credit application have been gradually rebuilt in more modern technology stacks.”

For example, in 2015, the Bank launched ScotiaHOME, a new retail mortgage system for the branches to process customer mortgage applications. It was rebuilt on a modern technology platform to replace its outmoded predecessor, which is being untethered and decommissioned.

Besides enhanced customer experience, less technology complexity brings about more consistent internal controls and compliance, as well as revenue growth opportunities.

The journey to modernize the retail credit application continues. The business and technology teams will keep prioritizing the parts that need replacing and build forward — always with customer and business growth in mind. “Modernizing core technology is one tough nut to crack for many companies, but we’re addressing this piece by piece, systematically and seamlessly,” said Razavi.


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