Five years ago, BMO launched a cloud-first strategy that today is leading to more IT automation with an annual cost savings of 30% for its transportation finance group.

A key part of that strategy involves looking at how to automate, Lawrence Wan, chief architect and innovation officer at BMO Financial Group, told Bank Automation News.

“We’re not talking about just blindly moving everything that we already currently have on premises,” Wan said. “Whenever we tackle a particular problem, scale a problem like transportation, finance, it’s how do we do it digitally, which typically in regard to how do we streamline the process, and then we standardize it, and then we can automate it.”

The challenge the transportation finance group faced was a portfolio of approximately 70 apps that came with the company’s 2015 acquisition of GE Capital’s Transportation Finance. At the time, this was the largest financier for the commercial truck and trailer segment in North America. To continue the apps, BMO migrated the portfolio to a dedicated data center. Generally, the apps support BMO’s submission of loans to truck dealers, Wan said.

The migration created three major issues. First, there was a lack of innovation; second, it was expensive because of the dedicated facility; and third, there was a cost associated with talent and workforce to keep working in a legacy environment.

To address these issues, BMO this year opted to move the apps to Amazon Web Services (AWS), where it had already invested time creating a secure foundation, Wan said. It finished the migration a few months ago but is already realizing gains in automation and ability to scale, he added.

Automating IT

The automation is in how IT manages the infrastructure on which the apps reside.

Prior to the transition to AWS, setting up an application required multiple employees and substantial time. For example, a system administrator would first build the infrastructure of the operating system. Then, network engineers would set up the firewall and create the routers to connect the applications to the infrastructure. To scale it beyond its existing infrastructure meant redoing all that work, he added.

AWS CloudFormation uses a template-driven approach to create the infrastructure, Wan said. BMO submits its infrastructure requirements, which then becomes a template to automate the creation of the cloud environment that runs the application.

“When we go into the cloud, we don’t just move things manually, we actually use the opportunity to create a lot of repeatable automation scripts that allow us to manage an environment automatically by default. So then the exercise allows us to create an environment and footprints that is automated by definitions,” Wan told BAN. “All this work, now, is template-ized and the template is actually generated. Now we automate the whole process that usually would take weeks to create an environment.”

It also reduced testing time, which now can be done in hours rather than four weeks, he said.

Thanks to the automation, the migration to AWS took eight to 10 months, or half the time it took to migrate the portfolio from GE to BMO’s dedicated data center, Wan said.

A responsive, upskilled IT team

Automation also allows network and systems engineers to focus on more meaningful work rather than day-to-day tasks just to manage the environment, Wan added. Additionally, nearly 35% of BMO Transportation Finance Technology employees have been AWS Certified Cloud practitioners through BMO’s employee training program.

“A lot of them are now moving into working on the script, working on the automations, and also working on exploring other innovations that allow us to now be able to get access to by moving into the cloud,” Wan said. “Everybody is going to the cloud, everybody is talking about automation, but automations actually need to be created.”

The automations also allow the IT team to be more responsive when applications are running slower or when there are new compliance or security policies to update, he said.

“Using automations, we actually can detect if there is any applications trying to create data or create a data set that is not encrypted,” Wan said. “If someone’s tampering … we actually can detect that in real time.”