UK banking giant doubles down on IBM z15 mainframes

Nationwide Building Society has had more than its share of technology challenges the past three years due to the pandemic, Brexit and a steady stream of new regulations concerning the cloud.

Fortunately, Nationwide, a large financial institution in the U.K. with 16 million customers, came up with a five-year plan to carry it through such crises, both seen and unseen. At the heart of that plan was to put in place an architecture that provided customers with dependable availability to a range of financial services.

"Our customers are also our shareholders, so we are insanely focused on what the need," said Gary Delooze, Nationwide's CIO. "More than anything else they want us to maintain 24 by 7 access and availability. They aren't necessarily interested in the latest shinny app or latest feature. They want to know if they make their next car payment or deposit money to pay their rent."

To best meet those needs, Nationwide, which had IBM's z13 mainframe in place along with IBM Power servers, decided to upgrade its mainframe to the z15 and migrate workloads running on the Power servers with those operating on the new mainframe.

A little past the halfway point in its five-year plan, Delooze said the experience has been a good one -- although there were some minor bumps along the way.

"There were a few points during the migration where the maturity of the new platform led us to some risk," Delooze said. "But it came down to how well you are supported by your technology partners, and IBM worked closely with us to get us through that. Customers didn't notice we made the switch."

[Customers] aren't necessarily interested in the latest shinny app or latest feature. They want to know if they make their next car payment or deposit money to pay their rent.

In 2019, the only legacy application Nationwide ran on the z13 was Db2 with Power-based systems running its other legacy applications, including its SAP-based core banking system. With the migration of the legacy applications and workloads, a process that is still underway, Nationwide is slowly retiring its Power systems.

Explaining why he jumped over the z14, Delooze said the z15 provides him with a system with greater longevity than its predecessor. Nationwide and other banks must always be acutely aware of a system's lifecycle, he notes, especially given how rapidly technology is evolving. Banks are not allowed to operate server systems once their lifecycle has ended.

"Not sure if this will be the case but the expected lifespan of the z15 should give me a few more years to run our core banking platform," Delooze said. "Over that time, we can figure out our cloud-based options for migrating workloads," he said.

Nationwide's move to the cloud, however, has been slowed by the complexity imposed by the growing number of regulations issued by government regulators, largely over security risks. But there are other concerns.

Regulators' fears that the U.K. banking infrastructure could end up mainly in the hands of Amazon and Microsoft, two companies not regulated by the U.S. government, prevents firms like Nationwide from taking advantage of cloud technology innovations, Delooze said.

"We've made arguments that with the amount of money Amazon, Microsoft and Google invest in security and resilience, they likely have far better technologies than we could have in our own data centers," he said.

With this hesitancy to more quickly gravitate to the cloud, Nationwide has built in multiple layers of protection to fend off hackers. Because the company uses the mainframe as a system of record, one such protection is to not make the mainframe available on the public internet. To crack into the system, hackers would have to go through "many firewalls, layers of security and access controls," according to Delooze. "Access to the platform is very restricted," he said.

Nationwide is evaluating IBM's Pervasive Encryption but has not decided to implement it. The main reason is the overhead it places on system performance. The company has experimented with encryption schemes on other platforms, with disappointing results.

"We are very careful about making any changes like that," Delooze said. "We first need to test it heavily and see what the results are."

Nationwide has invested significantly in building its internal engineering team to support the mainframe, as well as in the third parties it works with. The company has also made a focused effort to ensure access to Red Hat and IBM support teams. But Nationwide still faces challenges recruiting trained professionals to help with the integration of new technologies.

"The challenges for us aren't really in the mainframe architecture or zOS," Delooze said. "It's more with newer things like deploying Linux on a mainframe, which is very much a specialist capability. There aren't a lot of people who have done that and done it well. We've had to work hard getting to people in Red Hat and IBM who know how to build it in a way that works."

As part of the upgrade, Nationwide for the first time runs Linux in a number of logical partitions (LPARS) under zOS that control applications including a change data capture tool. This decision was made, in part, as a cost savings measure.

"A couple of years ago we decided if we carried on doing what we were doing, we would have to get bigger mainframes every year because the volume of transactions is rising so fast," Delooze said. "The scaling capabilities of this [z15] should help phenomenally."

As editor at large with TechTarget's News Group, Ed Scannell is responsible for writing and reporting breaking news, news analysis and features focused on technology issues and trends affecting corporate IT professionals.