Sustainable Success Stories: PrivatBank Ukraine

Migrating the banking services to Cloud

We started the migration with the critical services and continued with the additional services, which are to do with regulations, reporting to the National Bank and other regulatory bodies, restoring the connection with SWIFT, Visa Inc. and Mastercard Inc. The migration was accomplished in what I believe is world record time – the critical services, which would guarantee us the basic servicing of our clients, branches, and payments, were migrated in the cloud in approximately 30 days, while the remaining services took us another three weeks to migrate.

So, as a result, we migrated 75% or our IT solutions, which are needed to run our banking business daily – that’s 4000 different servers, 4 petabytes of data, including clients’ data, transactions, and history, all our logs. I can say, without any hesitation, that it is a completely abnormal and extraordinary project, which I am immensely proud of. We hadn’t worked with the Cloud before, so our people were learning by doing. Of course, we were accepting third-party assistance where possible, but, for the most part, it was 500 of our IT staff, which were scheduling, migrating, configuring, testing, and starting the operations from the Cloud Solutions.

Optimizing, facilitated by understanding the true IT costs

The primary focus of the migration was, of course, to secure the bank’s operations, so the country could supply the physical currency, as well as ensure the electronic internal and cross-border transactions for our clients. But very soon we realized that the migration also naturally includes optimization and rethinking of our architecture, and that we can gain much more by staying in the cloud for longer. The regulator allowed banks of Ukraine to stay in Cloud Solutions for the period of the war and for another two years after that. And the benefit of the Cloud is that we’re renting the infrastructure when we need it, and, while it costs money, we use it for our business purposes safely and securely.

Tragically, this realization had to be triggered by the war, but the process of migration shed light to the fact that financial institutions in my experience have not been very good at understanding what their real IT cost is – there has simply been no opportunity to compute it all properly. But placing 75% of the IT operations in the ideal data centre that Cloud is, means that when you get the bill the next day, you know exactly how much things cost, as well as how much storage a particular system is using, how much memory, how much CPU power and so on. And suddenly the guys are shocked saying – we didn’t know we were so expensive! And this process allows you to see that, for example, the very critical system like Privat24 – the mobile application which is used by 15 million Ukrainians for their daily banking, costs pennies, while the system which is responsible for delivering the data to Privat24 costs 7 times more than that. The specialist responsible for this system took only two weeks to cut its costs by ¾. So, by rethinking what is needed, by reorganizing our approach, by reducing the complexity, which we had created in our physical data centres, we were able to optimize and cut costs immensely.

It takes extraordinary effort, but it also gives us a huge opportunity for future improvement – to better manage and focus on our services, time of delivery and our clients’ needs, as well as using optimal approach to the system’s architecture and infrastructure. Of course, it would never happen without our desperately committed, dedicated guys, who were working abnormal hours for 60 or so days – they sacrificed a lot, but this is one of the best teams I’ve ever worked with. Now we can work on optimizing the further usage, because we have a much better understanding of the costs behind it all.

Recruiting a new IT leadership team in collaboration with Amrop Ukraine

PrivatBank’s IT team is immense – IT solutions, systems, development, and support is handled by approximately 1200 people. Across the last 30 years the bank grew extensively – lots of systems and solutions were created, as well as lots of careers. There were a lot of specialists in senior positions who had never worked for other organizations, and they were fairly set in their ways – a certain way to act, think, operate.

I took the IT over two years ago, and very soon initiated a series of trainings and other types of education to have them start thinking about other approaches and different solutions – that there could be other ways of doing things. The change that we were after was to become faster, cheaper, and more innovative, and in the end, we decided to recruit a number of senior IT positions from external candidate pool, and I approached Amrop Ukraine inviting them to help us with this need. We wanted to bring these new competencies to the IT teams which we already had, so that the new hires can bring the wind of change and initiate innovation, using the experience they’ve acquired at other financial institutions. We wanted to show the team that things can be done differently too.

We hired a new Chief Information Officer, Chief Digital Officer, Head of Cybersecurity, Head IT Architect and Head of IT Operations. We empowered them and it created a different momentum, a different atmosphere, and when the dramatic change – the migration to Cloud had to begin, the team members who had been with PrivatBank previously, were saying “It will never happen!”, whereas the new team members were saying “Let’s try!”. The new hires, led by the Chief Information Officer Andrzej Dominiak, were the central drivers of change, and they helped the very intelligent and capable members of the IT team to understand that, just because it has never been done before, doesn’t mean it won’t work. And this is also Amrop’s contribution to our success.

When it comes to the collaboration with an executive search firm, I had very clear expectations, which Amrop was able to understand. The way I see it, it’s not just about what I want and what the company can deliver, but also about staying in the dialogue, about maintaining the continuous feedback loop. It was also an interesting process for me, because people at Amrop really listen – and it is not always the case that the executive search company is interested in listening to clients’ needs.