Entrepreneur-focused OakNorth becomes first UK bank to move core system to the cloud with AWS

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OakNorth is one of a number of new banks joining the UK market as barriers to entry are lifted

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Specialist bank OakNorth has become the first UK bank to move all of its core banking systems to multiple private clouds from Amazon Web Services (AWS).

Francesca Gandolfo, COO at OakNorth Bank, told ComputerworldUK that it chose to move to the cloud because: “We want to have an infrastructure that enables rather than constrains us, so in the cloud you can scale up and down depending on which way the business takes. It gives you the flexibility to be quick to market.”

OakNorth got its banking licence in March 2015 and launched services in September. The bank specialises in loans of between £1 million to £15 million for entrepreneurs, and offers a diverse range of collateral, rather than just property.

Unlike some of the other digital challenger banks, which may consider themselves tech companies, OakNorth says that is is focusing on offering financial services. “We will outsource the tech expertise to the experts,” said head of marketing and PR Valentina Kristensen.

Read next: The UK’s new breed of digital challenger banks: Atom, Mondo, Starling and Tandem - Ranked

So now OakNorth is running its core banking software, provided by another relatively young firm, German cloud banking software company Mambu, on AWS cloud infrastructure.

“We wanted to centralise our infrastructure and found the cloud was the best platform for us,” Gandolfo said. OakNorth first moved its ancillary services – such as shared drives – to the cloud. Once it was happy that the transition would be smooth, the bank moved its core systems over too.

FCA guidelines

In November the Financial Conduct Authority (FCA) finally published guidance for UK-regulated financial services firms when it comes to using cloud-based infrastructure and software.

Prior to the FCA's cloud guidelines, OakNorth had to run the Mambu software on traditional servers. It was only able to start running it on the preferred platform AWS cloud once the guidelines were in place and the business was able to appease regulators.

Read next: How Tesco Bank has adopted AWS cloud as 'business as usual' in eight months

According to Gandolfo, the business was confident AWS’ security would appease regulators.  “They have a large number of certifications, and because of its scale, it’s able to really implement state of the art infosec,” she said.

Kristensen added: “When we first went online in March and got our licence we wanted to work with AWS and they helped in the discussions with the FCA.

We pushed ahead and went into mobilisation to start lending and trading in September, then the guidance was published so we picked up those conversations again with the regulator.”

“OakNorth wanted to be cloud based from the beggining but it wasn’t right at the time because the policy wasn’t there.”

AWS

AWS gives OakNorth “a global infrastructure we wouldn’t be able to do ourselves,” said Gandolfo. This allows the bank to maintain data sovereignty, which is particularly relevant as it looks to expand into foreign markets, with India already in its sights.

It also allows OakNorth to scale at its own pace. “You pay when you use them rather than paying for things you think you may need in the future,” Gandolfo said.

OakNorth chose AWS over other cloud providers because of the level of service they received, according to Gandolfo.

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