NAB Saves Big Using Amazon EC2 Spot Instances and AWS Graviton

NAB serves eight million customers with a broad range of financial services, such as savings accounts, credit cards, and loans for both business and personal banking customers. NAB started its acceleration to the cloud in 2018 with a handful of applications. This began with an ambitious “30 in 50” program that migrated 30 applications to the cloud in 50 days. “It was super hard work, but it gave us the proof point that the cloud would be an essential part of our digital transformation journey, even in a highly regulated financial services market,” says Roger Schobben, executive for cloud at NAB.

Fast forward to 2022, and the bank is running more than 60 percent of its applications in the cloud. NAB’s internet banking solution, business banking solution, financial risk management, trading systems, and other company-critical applications run on AWS, supported by a multicloud treatment. Hundreds of squads are using cloud infrastructure, and NAB seeks to distribute cost-optimization opportunities while continuing to develop and deliver new features. According to the cloud financial operations team, NAB is now working on transforming its operating model to make sure it can deal with the velocity and demand for cost optimization, be sustainable, and continue to innovate. “The more challenging bit was optimizing cost at scale through empowering our service owners to manage their consumption costs on their own,” Schobben says.

NAB set a challenging goal of decreasing its cloud costs by 20 percent in 2022 while continuing to build new cloud-based applications for customers. It began to run an increasing percentage of its workloads using Amazon EC2 Spot Instances, which let companies take advantage of unused Amazon EC2 capacity in the cloud and run fault-tolerant workloads for up to a 90 percent discount compared to on-demand prices. To maximize application performance, NAB increased its use of AWS Graviton processor, designed by AWS to deliver the best price performance for cloud workloads that are running in Amazon EC2. “With a highly reduced rate on Spot Instances and the high price-over-performance ratio on AWS Graviton processor, it’s just a no-brainer,” Schobben says. “This combination is a must for anyone who wants to optimize their cloud spend.”

The bank’s approach involved migrating individual workloads to Amazon EC2 Spot Instances and AWS Graviton processor in nonproduction environments to mitigate risk and gain confidence before expanding to production. NAB increased its use of Spot Instances overall from 2 percent in 2019 to around 17 percent in 2022. About 26 percent of nonproduction workloads and an increasing number of critical applications, such as NAB’s trading platform, ran on Spot Instances in 2022. “Spot Instances have been part of our optimization strategy, and we have been very successful migrating our workload. They improve our operating margins so that we can run our applications at a lower cost,” Schobben says. The bank also has increased its use of AWS Graviton processor by 30 percent per year, including the migration of large applications, such as NAB’s Data Hub. NAB benefits from the elasticity of AWS Graviton processor alongside Spot Instances and estimates it is saving about a million dollars per year just with these two initiatives. “For banks to be successful, they need to grow revenue, but it’s also about doing that efficiently and keeping your costs under control,” Schobben says.

NAB’s cost-optimization program has helped shape a company-wide, cost-conscious mindset that begins with the support of senior executives. From the start, they have backed the initiatives of the technical team and applauded the success of cost-optimization efforts. “One of the key success drivers is having that top-down endorsement and support,” Schobben says. NAB developers now actively discuss the cost efficiency of the architecture while in the design phase of an application. Employees can see the direct impact of their efforts through the AWS Cost Explorer dashboard as well as third-party tooling. Engineers who delete old, unnecessary backups, for example, can see the cost graph drop instantly and know that their actions have saved the company money. As a further indication of the culture change, 400–500 NAB technical team members regularly attend AWS cost-optimization sessions. And more than 800 NAB engineers have attended AWS boot camps and workshops that provide education about cost optimization. “Having that culture change is something that other companies are trying really hard to harvest,” Schobben says.

The company has also seen a positive environmental impact from optimizing costs. The combination of Amazon EC2 Spot Instances, which use spare capacity, and AWS Graviton processor, which provides higher performance for the same energy use, facilitates company-wide sustainability goals by using less power.

NAB plans to have 80 percent of its applications in the cloud by 2023, supported by the same focus on efficiency, to fuel further innovative banking experiences for customers. “The less we spend on cloud infrastructure, the more we can invest in innovation, building on the unique value that cloud platforms offer in, for example, data and machine learning as well as making our environments more resilient,” Schobben says. “It helps us become a faster, simpler bank, not only for our customers but also for our colleagues. Using AWS helps free up cash that we can reinvest to further enhance our whole technology offering.”