The Norinchukin Bank migrates JA Bank’s large-scale core system to AWS
The Norinchukin Bank is a financial institution that supports the agriculture, forestry and fisheries industries, and operates businesses including financial services. The bank adopted Amazon Web Services (AWS) and updated its infrastructure when migrating the large-scale core system of JA Bank, which has over 6,000 branches nationwide, to the cloud. It is estimated that by migrating the database to Amazon Aurora and reducing hardware costs, the bank will reduce TCO (Total Cost of Ownership) by more than JPY 10bn over 13 years.
Background
JA Bank is a significant financial group consisting of JA, Shinnoren (Credit Agricultural Cooperative Federation), and Norinchukin Bank, and boasts over JPY 100trn in savings, over 6,000 branches, and over 10,000 ATMs. ``The Norinchukin Bank manages funds entrusted to us by the nearly 600 JA and Shinnoren nationwide, and returns approximately JPY 500bn in profits each year,’’ says Director and Managing Executive Officer Yuji Hanba.
JA Bank’s core system was built in 2002 by integrating systems that had been operated within each prefecture, and was named the “JASTEM System”. The JASTEM system consists of two parts: an accounting system and an information system. The main role of the information system is to accumulate transaction information and customer information processed by the accounting system, and to be used by JA staff for external relations activities and data analysis.
The JASTEM information system, which was initially operated in a mainframe COBOL environment, was made open in 2010, virtualized in 2014, and updated to IA server in 2018, while adopting an open architecture. This eliminated technical debt. Later, as cloud services became more prevalent in finance, the decision was made to migrate the JASTEM information system to the cloud. Mitsuro Shibasaki, Acting General Manager of the IT Department in the Administrative and IT Unit, said, ``Increasing demand for cost reduction due to changes in the business environment, improved scalability and flexibility in response to business acceleration, and ease of connection with other systems — with this in mind, we decided to migrate our information system to the cloud.”
Solution Development
The bank started considering the cloud migration in June 2018 and decided on AWS after comparing major cloud services. Mr. Shibasaki recalls, “We evaluated the company’s cost competitiveness, track record in the cloud market, and confidentiality required by financial institutions.” Kazuhiro Ishida, Deputy General Manager of the JASTEM Development Department, JASTEM Business Headquarters, Norinchukin Information Systems Co., Ltd. (NIC), which develops and operates the JASTEM system and the Norinchukin Bank’s systems, said, “AWS will be used in the system for the Norinchukin Bank. We judged that it would be easier to gain approval from the parties involved because we have a proven track record and the Enterprise Agreement we signed at that time clearly defined the scope of security responsibilities.”
From the perspective of cost reduction, a major point is the database (DB) Amazon Aurora . Until now, the JASTEM information system had been using a commercial DB, but based on the results of actual machine testing and cost calculations, they decided to switch to Amazon Aurora. Mr. Keisato Tsujiuchi, acting manager of JASTEM Development Department 2, NIC JASTEM Business Headquarters, says the following.
“The deciding factor for us was that Amazon Aurora requires no license fees and is extremely inexpensive. In addition, it offers high availability with six copies of data across three availability zones, and compatibility with PostgreSQL OSS. We made the decision based on the ease of transition.”
After deciding to use AWS, the bank started defining requirements in March 2019, and completed the migration in September 2022 after building the infrastructure and migrating the DB. The issue faced by the bank in moving forward with large-scale projects was a lack of know-how in the early stages. Therefore, from the requirements definition process, the bank utilized AWS Professional Services and accumulated knowledge about the cloud through reviews of requirements definition documents, design documents, and other deliverables and workshops.
Another challenge is countermeasures against security risks. Also utilizing the AWS Professional Services, the bank formulated “Security Architecture Implementation Guidelines” based on FISC security standards and security design best practices provided by AWS, and implemented permission settings, data encryption, unauthorized access/change monitoring, etc.
As a DB migration measure, the bank collected information on incompatibilities between existing commercial DBs and PostgreSQL, and then determined the feasibility through desk checks and actual machine testing. In the integration testing process, the bank used actual data, and in addition to conducting tests covering all conditions, the bank also conducted thorough migration tests and rehearsals to estimate the migration time.
“The JASTEM information system is divided into two main system groups, and we migrated data in two stages, 12 TB and 13 TB for each, for a total of 25 TB. The integration test and migration rehearsal were conducted using actual data, so the work was difficult. We were able to improve the accuracy of time estimates and proceed with the actual migration work as planned.” (Mr. Tsujiuchi)
Results
By migrating to AWS, license costs for the JASTEM information database are expected to be reduced by around 30% compared to the previous model, and the TCO savings will be over JPY 10bn over 3 cycles (13 years), including the reduction in hardware costs.
“The advantage of the cloud is that you can freely expand or reduce resources according to the usage status of the system and the number of people, and there is no need to prepare more high-spec servers than necessary, unlike on-premises.” (Mr. Ishida)
Since there is no need to procure hardware, lead time is shortened and resources can be provided according to the development project. “An advantage of the cloud is that the preparation time is less than half that of on-premises, and you can start small and expand,” says Tsujiuchi.
This project, which took 4,000 person-months and approximately four and a half years, including the PoC period, to migrate to AWS provided a great stimulus to the bank’s IT department.
“Successfully migrating a large-scale system to the cloud was an epoch-making event for the entire IT department, and served as an opportunity to significantly change the culture of the department,” says Mr. Hanba.
The IT department has accumulated AWS know-how, and the hurdles to utilizing the cloud have been lowered. Mr. Shibasaki says, “We are now able to voluntarily talk about using the cloud not only for the JASTEM system, but also for peripheral systems for grids, and the cloud has become more familiar to us.’’
JA Bank’s future system concept is to actively promote data utilization, and the bank has already built a new infrastructure on AWS to relay and store data between systems.
“Using data infrastructure and analytical tools, we are aiming for a future where we can take data-driven actions, such as analyzing the appropriate approach to JA Bank’s customers and formulating strategies for JA Bank. We also hold regular study sessions, etc. We are deepening our knowledge through this process, and we will continue to work closely with AWS to move to the next stage of becoming cloud-native.’’ (Mr. Hanba)
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