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Savings bank NS&I launches £700m+ in IT tenders

The £2bn programme spells the end for Atos's BPO deal with NS&I.

Savings bank NS&I has launched the final procurement phase of its £2 billion “Rainbow” digital transformation programme, inviting bids for £480 million core banking and £276 million contact centre NS&I IT contracts.

The NS&I Rainbow programme is the government-owned savings body’s ambitious push to move to a “disaggregated” model, and away from its 20-year-old outsourced IT operations with Atos.

The process started last year with a tender for digital integration and service operations, and continued in February with a tender for digital experience and digital enablement. The winners of the first NS&I IT contract under the Rainbow programme are expected to be announced imminently.

No bespoke systems for NS&I IT contact

Under the new NS&I IT contracts several suppliers will be expected to work together to deliver the body’s services – NS&I officers have made it clear collaboration is non-negotiable.

NS&I is also keen to move to “off-the-shelf” IT systems, with the aim of eliminating the need for bespoke elements, according to Prasad Bangalore, assistant director of IT at NS&I: "“Rather than building bespoke technology, our principle of using off-the-shelf packages is key to providing a service that is both low-cost and easy to maintain,” he said during a briefing session for potential core banking contract bidders.

Matt Smith, COO of NS&I, meanwhile said only Premium Bonds may need a custom solution.

“With the exception of ERNIE, our Premium Bond random number generator, we anticipate that bespoke software should not be needed under the new model. Systems need to be configured to deliver new and modified products and services with minimal need for customisation, to meet customer and other stakeholder expectations around pace of change and service improvements,” he added.

An ERNIE money box. Image courtesy Wikimedia.
An Ernies Lucky Bond Box money box, originally used as a promotional item to encourage youngsters to save up to buy national savings premium bonds in the late 1950's and early 1960's. Wikimedia.

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NS&I's Bangalore provided some high-level information on what the new NS&I IT contracts should deliver: “We want modular technology solutions to be delivered, so that they allow implementation of discrete bits of transformation independently – that’s removing the danger of big-bang migrations and improving our agility, etc.

“Our ambition is to be a fast-follower, plugging in new solutions only when needed, rather than re-engineering existing ones. We believe this gives us the future-proofing and flexibility needed.

“There is a need for automation – our business has strong cyclical demands… and also peaks due to market changes. So automation is really key for us to keep our operations nimble and efficient. Core processes must be automated, with minimal manual intervention, so we can scale our operations smoothly.”

Bangalore said NS&I expected functions such as change life-cycle processes such as testing, DevOps, deployment and scaling infrastructure to be automated. He also said the body would need highly-customisable dashboards and reporting, enabling self-service insight.

He also gave some context for NS&I’s current IT operations: the body maintains 29TB of data, which it expects to grow 20% annually; it holds 25 million customer records, with 4.3 million active customers, and 4 million banking engine transactions every month.

Cloud a priority for NS&I IT contract

Answering a question, Bangalore said cloud was a priority for the NS&I IT contract: “We will be looking for cloud, and where possible cloud-native solutions, and that’s one of our architecture principles, to move more and more into the cloud – primarily because it helps us on the scalability and various objectives of the Rainbow programme around dynamic scalability, keeping the operations nimble and cheap.”

The Rainbow programme aims to make a clean break with the approach favoured between NS&I and Atos. The Rainbow programme website makes clear NS&I has “no intention” of extending the current BPO arrangement, and Sean Baylis, assistant director of the programme, told the procurement briefing session NS&I was looking for a new approach.

“Our business case has secured the approval to move to the disaggregated model… and as such this new approach requires us to reconfigure ourselves to assess how we will operate as a client with a number of key package suppliers, rather than just the single supplier we have currently,” he said.

At a Public Accounts Committee hearing last March, Smith admitted some of NS&I’s functions still relied on code written in COBOL, which has caused issues for Atos and NS&I. He told the committee the body was now bringing IT skills in-house.

“Because we had outsourced our IT and retained a small IT assurance function, we had not really got the enterprise architecture skills that we needed, so we have hired those in. I acquired some new senior people with external experience of having done this kind of transformation before. They have been front and centre of the design phase of that,” said Smith.

See also: JPMorgan turns to two British fintechs for new core retail banking engines in both the US and UK