NatWest – The Case for the Mainframe in a Hybrid Cloud

By Patrick Moorhead - July 2, 2024

One of the most satisfying parts of my job is sharing stories of digital transformation and the extraordinary ways companies use technology to solve real problems and create business opportunities. I also like highlighting the IT leaders who make it happen, hoping it will inspire others.

One such IT leader is Iain McCorquodale, head of Core Solutions at NatWest, a major retail and commercial bank in the United Kingdom. NatWest has about 20 million customers who engage in 200 million touchpoints and 50 million payments daily. That is a plethora of opportunities to make a positive or negative impression on a customer—certainly enough to give the person in charge of its core IT infrastructure sleepless nights.

Recently, I was fortunate to speak with Iain to discuss NatWest’s strategy of being a “relationship bank for a digital world” and the underlying technology infrastructure that supports that strategy.

Iain McCorquodale
Iain McCorquodale, head of Core Solutions, NatWest— Source: Futurum Group

Hybrid Cloud and the Mainframe

Today, most businesses have adopted a hybrid cloud infrastructure that includes all platforms, including the modern mainframe, which has become an essential underpinning for the hybrid cloud.

A hybrid cloud harnesses a mainframe’s proven worth as a transactional powerhouse with incredible reliability and security while embracing the benefits the cloud can bring. For NatWest, where trust and innovation are central to customer attraction and retention, integration with cloud services enables the bank to deploy technologies such as generative AI, machine learning, and advanced analytics to bring greater value to core banking functions.

Iain advises, “We shouldn’t talk about the mainframe as a standalone, but rather as part of a cloud strategy. People should not view the cloud and mainframe as different or competing entities.”

The case for mainframe modernization is vital, as nothing matches a mainframe to securely process hundreds of thousands of business transactions daily. However, it must also become an integral part of cloud strategy and continually leverage its strengths, which no other platform can match.

An Open Banking Culture

NatWest is committed to an open banking culture, which, from a technical standpoint, means exposing everything through APIs.

NatWest has a wealth of well-managed data that can be used to generate insights on customers. Traditionally, the banking industry has underutilized personal data for fear of interfering in people’s lives. Today, customers have a greater desire for an individual experience tailored to the current situation. If the customer is about to buy a car, the bank should be able to elevate the experience and value of that interaction by saying, “How can we help with this transaction?” NatWest is better able to do this because it understands, through the data, each customer’s unique situation.

Business strategy and technology dovetail here. Mainframes are processing volumes of data with speed, scale, and security. The trick is to capitalize on that investment and derive insights from it. As Iain puts it, “We have a lot of data that resides on the mainframe. The critical thing is to use the rapid channel development on the front end and expose the value of the data at the back end.”

The bank’s strategy is to take the customer data and knowledge on the mainframe and expose them through APIs for inclusion into microservices- and event-based architectures. It’s about ensuring a seamless data flow to rapidly developed applications that can react to trends or needs.

A Mainframe User Experience Comparable To The Cloud

The bank aims to make the mainframe user experience as comparable to the cloud user experience. The key lies in creating APIs to allow cloud-native applications, such as a mobile banking app, to access valuable mainframe data.

APIs enable secure and managed access to the mainframe using standard data integration technologies such as RESTful APIs. RESTful APIs can leverage existing policies and logic to make mainframe services and capabilities appear like cloud services.

The promise of a hybrid cloud is mainly in portability and optimization—provisioning workloads where it makes the most sense and moving workloads between platforms as needed. Modernizing mainframe infrastructure to run newer, cloud-native workloads means gaining the ability to make newer languages common on the cloud (JavaScript, Ruby, Python, and so on) and new technologies such as containers and Kubernetes available on the mainframe.

Open-source tools enable a modern developer experience with the same DevOps process used for other platforms with modern CI/CD pipelines and automated testing. Cloud programmers can develop applications for deployment on the mainframe just as they would on the cloud with a developer experience that is no different from the cloud-native environments they are already familiar with.

The Right Mainframe Partnerships Can Be Powerful

When integrating a mainframe into a hybrid cloud architecture, you must be savvy internally, aided by an experienced and responsive partner for integration and software.

An example of this is Broadcom’s open-first approach, which provides tooling and technical capabilities across the mainframe estate. Iain describes Broadcom’s work with NatWest as being in sync with his goals through such venues as its customer council. He notes that “Broadcom uses customer input to develop products that work in an ecosystem rather than building a giant fortress around the mainframe.”

My Point of View

Consider this context: We are 14 years into the public cloud, yet 75% of enterprise data is still onsite and on local devices. I did not coin the term hybrid cloud, but ten years ago, I espoused hybrid cloud as the ultimate destination, and I was called a “cloud denier” for my troubles.

Getting specific about mainframes, I talk to a large enterprise once a week on average–and the vast majority of them have and invest in mainframes—precisely because mainframes are so powerful and reliable for the critical tasks they handle.

The minority that fail to see the business value and advantage the mainframe can bring to digital transformation initiatives are often running unsupported hardware and software and have not invested in integration into a hybrid cloud.

Like many big banks, NatWest has always been a mainframe-centric organization that invests in modern infrastructure, but NatWest is different in the way they view the mainframe as part of the overall hybrid cloud infrastructure.

For Iain, it is a constant quest to position the mainframe’s virtues within NatWest. Many new tech leaders with a cloud centric focus lean more towards AWS, Azure, or Google Cloud. For those folks, Iain offers some valuable advice: “Whatever the platform, we shouldn’t talk about the mainframe [in isolation], but include the mainframe as part of a cloud strategy, exposing the value of the mainframe by making the platform more accessible using common tools.”

The goal is to create a ubiquitous developer experience across the hybrid cloud, with applications executed in the best location based on attributes, leveraging cloud services for specific workloads while retaining mainframe capabilities for mission-critical tasks.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.