• About AFG

    Australia Financial Group (AFG) is one of the largest mortgage aggregators in Australia. Launched in 1994, the company provides access to more than 2,800 mortgage brokers. It processes about AU$4 billion (US$2.98 billion) of finance each month and manages more than AU$127 billion (US$94.5 billion) in mortgage finance. Besides aggregating home loans, AFG also offers commercial finance and insurance products. It employs more than 190 people across Australia.

  • AWS Services Used

  • Benefits of AWS

    • Saves AU$500,000 (US$372,150) in IT operational costs annually
    • Focuses 60 percent of IT resources on innovation
    • Expanded development team by 68 percent
    • Creates test environments in hours instead of weeks

     

     

Fintech is transforming financial services by making them more convenient and accessible to people who never had access to financial services before. Because fintech startup companies are small, they can innovate more quickly than large businesses, where decision making often takes longer. Although startups are the driving force behind fintech—receiving US$24.7 billion of investor funding in 2016, according to KPMG—large, well-established financial services companies are increasingly trying to develop the same agility as their smaller competitors.

Australia Finance Group (AFG), one of the largest mortgage aggregators in Australia according to the Mortgage & Finance Association of Australia, is an example of such a company. Customers of AFG gain access to more than 2,800 mortgage brokers across Australia, offering more than 1,450 different loans from 45 of Australia’s leading lenders. In total, AFG facilitates about 11 percent of the country’s home loans. Seeing the potential and the threat of fintech startups on its business, AFG wanted to enhance its agility and capacity to innovate.

Fintech startups have begun to compete with AFG by launching online marketplaces for borrowers and mortgage brokers to negotiate home loans in Australia. Jaime Vogel, chief information officer at AFG, knew the business would struggle to compete unless it focused its IT spend on delivering new, value-added services. More than 80 percent of IT expenditure at AFG was consumed by IT operational costs. The costs associated with running infrastructure across two disparate data centers were consuming most of the budget. “We were not going to see an increase in our IT budget to spend on development, so we needed to find a way to reduce our operational expenditure and redirect that funding to innovation,” he says.

To reduce operational costs and free up resources for innovation, Vogel looked to the cloud. Not only would it lower operational spend, but it would also help drive innovation. “Fintech startups are using cloud-based IT to support their services,” says Vogel. “They gain access to cutting-edge technology through a pay-as-you-grow model. The cloud is safe and highly scalable, so startups can launch environments on the fly.”

Vogel wanted to move AFG’s entire IT infrastructure to the cloud and eventually close down the company’s two data centers. Of the systems Vogel needed to migrate, the most critical to the business is the Oracle Siebel Customer Relationship Management (CRM), which helps AFG coordinate communications with customers across multiple channels and lodge home-loan applications electronically. “The Oracle platform is used by all 2,800 of our brokers and their support staff,” Vogel says. “It manages all interactions with customers and integrates with the systems of 45 key lenders, enabling the delivery of about 1,450 financial products. It’s the heart of the company.”

Vogel turned to Amazon Web Services (AWS) to enable the migration of the Oracle platform to the cloud. “We wanted to work with a clear leader in cloud services,” says Vogel. “AWS had one of the broadest and most mature product portfolios for cloud services in Australia.” When Vogel proposed AWS to the board of directors at AFG, everyone was in favor of the plan. “They all knew about AWS and its standing in the market. Furthermore, AWS was already supporting the IT operations of large financial services. We went into the project with a lot of confidence.”

As part of the project, AFG engaged with AWS Professional Services. The services team helped design the AWS architecture for the Oracle platform. A team from Oracle then accredited the AWS design before the migration process began. AFG successfully migrated the Oracle Siebel CRM database, which includes 1.2 TB of CRM data, from the on-premises platform to the Amazon Relational Database Service (Amazon RDS). For the Oracle platform’s web and application servers, AFG incorporated instances of Amazon Elastic Compute Cloud (Amazon EC2).

Following the success of the migration, AFG started to move other systems to the AWS Cloud. Today, AFG is running all its business-critical IT systems in the cloud. These include human-resource management, payroll, and an Oracle Business Intelligence 12c solution which is also using Amazon RDS. The AFG IT team is increasingly using Amazon API Gateway to publish services and AWS Lambda for serverless computing. For instance, AWS Lambda now launches a calculation engine to determine an applicant’s eligibility for a loan the moment a request is submitted.

With all AFG systems now running on AWS, Vogel has delivered his goal of migrating to the cloud when the company closed two of its data centers in 2016. But did moving to AWS enable AFG to better compete with fintech startups? “Yes,” says Vogel. “Nowadays we are concentrated on innovation. We’ve reduced our IT operational costs by about AU$500,000 [US$372,150] per year using AWS-money we’re now spending on driving innovation.” The increase in funds will help AFG develop new products. “Today, 60 percent of our IT expenditure is dedicated to innovation and our developers are finding new ways for technology to deliver higher-value services to our customers,” says Vogel.

As part of the additional resourcing, Vogel has significantly increased the size of the company’s development team. He says, “Since migrating to the AWS Cloud and reducing our operational costs, we’ve been able to expand the development team by 68 percent. We now have more talent to drive development projects at the company.”

By taking advantage of the AWS Cloud, the team is attaining a much higher level of agility. “As part of the development process, we set up new environments in hours when it would have taken weeks with an on-premises infrastructure. We can also scale those environments down when they are no longer needed,” says Vogel. “The cost effectiveness and easy scalability of AWS is such an advantage over on-premises IT, because it encourages the innovation that financial services companies need to thrive in this fintech-dominated world.”

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