Cloud Innovation: Reserve Bank of New Zealand

Moving systems onto a cloud environment carries many risks that give central banks pause. In many cases, using public cloud services – such as Microsoft Azure and Amazon Web Services (AWS) – requires moving critical infrastructure and data offshore. Given the sensitivity of the data that central banks handle, it is little wonder that many hesitate.

Nevertheless, the Reserve Bank of New Zealand (RBNZ) has blazed one possible trail that others may want to follow. It began experimenting with the public cloud and all the governance that entails for its financial strength dashboard, and has since used that experience to move boldly in the direction of more cloud integration.

Cloud environments can be public – offered by third parties – or private, built on site. The latter is more secure, but loses the massive economies of scale that companies such as Microsoft and Amazon can offer. Public cloud services can be scaled according to a user’s need, and the central bank only pays for what it demands. Scott Fisher, chief information officer at the central bank, says RBNZ uses a mixture of the government’s cloud-based infrastructure for its legacy systems, and public cloud for new services, provided by AWS.

“The benefit of this approach was a smooth exit from our on-premise data centres, with little or no redesign or re-implementation for our legacy systems,” says Fisher. “At the same time, new solutions could be assembled using native public cloud services. It also gives us flexibility on where we want to build solutions going forward.”

The central bank’s financial markets department has already moved to the public cloud, with many of its data sources loaded into RBNZ’s new Datahub. The data and statistics teams, as well as other departments, are now following suit.

The financial markets team has benefited from seeing its daily data update process move from a two-hour, once-a-day occurrence to a near real-time feed of data. “This meant they had more timely data on trades and positions throughout the day, but also our daily risk metric information is available a lot earlier to them too,” says Fisher.

End-users won’t notice much difference, as everything is still accessed from a staff member’s desktop. But RBNZ is working on rolling out new analytics and data visualisation tools based on the cloud. Fisher says staff are “really excited” about exploring the new technologies, though they will require additional training and support.

In moving core infrastructure to the cloud, security is “vitally important”, says Fisher. “The implementation of proper review processes like our risk assessment process means everyone is comfortable that risks have been identified, addressed as required and the appropriate level of ongoing risk is accepted.”

Moving forward, “cloud-first” is set to be a key principle for RBNZ. It is exploring how other aspects of cloud integration can make it a more agile user of technology, including digital workplace tools, new line-of-business systems and continued development of the Datahub, with a focus on analytics and data visualisation.