Since 1850, TSB has provided Kiwi-owned banking services to local consumers. In 1976, TSB became the first New Zealand bank to research, develop and use bank-wide, real-time computer processing – and five years later it introduced the first ATMs to the country.

But over the past decade, the bank had found itself doing an increasing amount of data centre maintenance, which was taking up a considerable amount of time and money. With end-of-life servers that needed upgrading and failed generators, TSB knew that outsourcing its data centre and private cloud would provide major financial and operational benefits. TSB looked to Datacom and their hybrid cloud offering Cloud X to support their move to cloud.

Migrating hundreds of servers without interruptions to online banking

By partnering with the experts at Datacom, the TSB team planned to achieve their April 2023 deadline.

“When we started, we knew it would be a large project,” says Julian Downs, CIO at TSB. “We had to migrate 250 servers and 50TB of data to Datacom’s Cloud X platform in waves of 10 or 15 at a time, with up to three waves in a 24-hour period. We got it all done on time, and on budget. It was great to watch attitudes change as we managed to get through it all; it’s given us a lot of confidence.”

It wasn’t just enough to migrate the data successfully; it was also critical that customer service wasn’t interrupted. The Gill Street data centre hosted 100,000 people’s daily online banking as well as $15 million in credit card payments, plus many millions in lending and interbank payments. Together, TSB and Datacom successfully managed the migration without causing any downtime in service.

“Customer didn’t see any change or disruption, but they’re getting a more reliable and secure service,” says Downs. “A big advantage is that this sets us up to provide more innovative products to consumers in the future.”

Financial benefits and improved teamwork

The benefits for TSB have been considerable. There have been immediate savings of $30,000 a year from closing the Gill Street data centre, and around $3 million in hardware spending will be avoided over the next three years.

Perhaps even more significant have been the benefits to the IT team and the wider business. The IT team is no longer stuck at Gill Street; they’ve moved into the main head office with the rest of the team. This has provided major collaborative benefits with the technology teams able to be integrate into every part of the organisation. With data centre and private cloud services now taken care of, TSB can focus all its attention on improving core banking services – and the IT team is loving the change.

“The feedback from our team has been awesome. Our IT people say their life is different now that they don’t need to feed and water the old data centre. They’re leaning into new skills and projects, and we’re working with Datacom on a second phase in Hamilton.”

A momentum shift toward digital banking

TSB has long been able to claim the happiest customers in the banking sector as an eight-time winner of the Consumer NZ People’s Choice Award for banking. This project will allow the bank to offer customers more digital products to save them time and keep their data secure.

The Government is supporting open banking and the first products are on the market – the TSB team expect to see an explosion in digital banking products over the next decade. With its strong API layout and more efficient infrastructure, TSB is well set up for the shift to open banking and fintech.

“Now, with the right cloud services and other infrastructure, we have a way to plug and play solutions within a secure framework,” says Downs. “We’re ready to pursue innovative products and focus on what it means to be a digital bank. This has been a momentum shift – there’s no going back.”

Without its partnership with Datacom, there’s no way TSB could have met its deadline and successfully made the transition to Cloud X; Datacom’s premium hybrid cloud offering. Using Datacom’s services means the bank can concentrate on its core business, so it’s been an excellent result from Downs’ perspective.

“Datacom came on this journey with us and supported us well. They were reliable, good value, and I think the project has gone super well. It was on time and on budget, with a quality outcome – and you don’t see many projects like that.”

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