Norinchukin Bank Migrates JA Bank’s Banking Platform to AWS, Expects Over 10 Billion Yen in Reduction of Total Cost of Ownership in 13 Years Using Amazon Aurora

The Norinchukin Bank, the Japan Agricultural Cooperatives (JA), and the Credit Federation of Agricultural Cooperatives constitute JA Bank, which is one of the largest financial groups in Japan, with over 100 trillion yen, more than 6,000 branches, and over 10,000 ATMs. “The Norinchukin Bank manages funds deposited from almost 600 JA cooperatives and the credit federation branches nationwide and returns profits on the scale of 500 billion yen every fiscal year,” says Yuji Hanba, director and managing executive officer, Chief Information & Digital Officer at Norinchukin Bank.

JA Bank’s mission-critical system, named the JASTEM System, was built in 2002 to integrate systems operated by prefectural units. The JASTEM System consists of two parts: an account system and an informational system. The informational system mainly plays a role in accumulating transaction data and customer data that is processed in the account system, which JA staff use for outside liaison activities and data analysis.

The informational system was initially operated in a mainframe COBOL environment, migrated to an open system in 2010, virtualized in 2014, and migrated to IA servers in 2018, transforming to open architecture to pay off the technical debt. Thereafter, as cloud services became more common in the world of finance, the bank decided to migrate the informational system to the cloud. “We decided to migrate the informational system to the cloud after considering the demand for cost reduction due to changing business environment, scalability and flexibility for business acceleration, and connectivity with other systems,” says Mitsuo Shibasaki, assistant manager of the IT Control Department of the Administration and IT Unit at Norinchukin Bank.

After deciding on cloud migration in June 2018, The Norinchukin Bank ultimately decided to adopt AWS after comparing major cloud providers. Shibasaki says, “We evaluated cost competitiveness, experience in the cloud market, and security required as a financial institution.” Kazuhiro Ishida, deputy general manager of JASTEM Development Department 2 in the JASTEM Business Division at Nochu Information System Co. Ltd. (NIC)—which develops and operates the JASTEM System and The Norinchukin Bank systems—says, “We thought that using AWS would be an easier way to obtain the agreement of stakeholders because we had already adopted AWS as the infrastructure of The Norinchukin Bank systems and had then signed up with Enterprise Agreement, which clarified the scope of responsibility for security.”

From the viewpoint of cost reduction, a major deciding factor was access to Amazon Aurora, which provides high performance and availability at global scale with full MySQL and PostgreSQL compatibility. The informational system used a commercial database in the past, but the team decided to migrate to Amazon Aurora for its verifications on actual equipment and cost estimates. Kagesato Tsujiuchi, assistant manager of JASTEM Development Department 2 in the JASTEM Business Division at NIC, says, “We chose Amazon Aurora because it didn’t require a license fee and the cost was incredibly low. Other deciding factors were its excellent availability, provided by the capability to maintain six copies of data in three different Availability Zones, and the ease of migration due to compatibility with open-source PostgreSQL.”

After deciding to adopt AWS, the team began defining requirements in March 2019, followed by building the infrastructure and migrating the databases, and completed the entire migration in September 2022. The Norinchukin Bank didn’t have expertise in the early stages of this large-scale project, so it engaged AWS Professional Services—a global team of experts that can help realize desired business outcomes when using the AWS Cloud—from the requirement definition phase and learned about the cloud through document reviews of requirement definitions and design documents as well as workshops.

Another challenge was dealing with security risks. AWS Professional Services helped the team formulate security architecture implementation guidelines based on FISC security standards and security design best practices from AWS and helped to implement permission settings, data encryption, and unauthorized access and change monitoring.

To migrate the databases, the company first identified aspects of the existing commercial databases that were incompatible with PostgreSQL, then verified the feasibility of migration through desk checking and testing on real machines. During the integration test process, the bank used actual data, ran tests covering all conditions requiring modification, and repeated migration tests and rehearsals to estimate the required migration time.

“The JASTEM System roughly consists of two system groups. We migrated 12 TB and 13 TB of data from each group in two respective phases, totaling 25 TB,” says Tsujiuchi. “Since we obtained a more accurate estimation of migration time by using the actual data both in the integration tests and the migration rehearsals, we completed the migration of the production environment roughly as planned.”

With the migration to AWS, licensing costs for the informational system databases are expected to be reduced by about 30 percent, and total cost of ownership, including hardware costs, is estimated to fall by more than 10 billion yen over three cycles, or 13 years.

“The advantage of the cloud is that it lets us scale up or down elastically according to system usage and the number of users, and it frees us from provisioning servers with overperformance as we would on premises. This has made it possible for us to be highly persuasive when explaining our investment plans,” says Ishida.

Because hardware procurement is no longer required and the lead time is shortened, the bank can provide required resources for each development project. “Compared to on premises, time to launch is less than half, and you can start small and expand later. That’s also an advantage of the cloud,” says Tsujiuchi.

This migration to AWS, which took 4,000 person-months over about 4.5 years, including the proof-of-concept, has given a huge impetus to The Norinchukin Bank’s IT Department. “The successful migration of the large-scale system to the cloud was epoch-making for the entire IT Department and triggered a transformation of the organization culture,” says Hanba.

Having acquired AWS expertise, the IT Division can use the cloud more readily than ever. “The team is proactively proposing to use the cloud for the peripheral systems as well. The cloud has become close at hand,” says Shibasaki.

The team has a plan to make more proactive use of data on the JA Bank systems. Toward that vision, it has already built a new infrastructure on AWS to relay and store data across the systems.

“We are aiming for a future where we can act in a data-driven manner using the data infrastructure and analysis tools, such as exploring the best approach to JA Bank customers and developing business strategies for JA Bank,” says Hanba. “We are also deepening our knowledge through regular study sessions, and we will continue to work closely alongside AWS to move our cloud journey one step forward to become cloud based.”