Nordea has the position of being the leading Nordic brick-and-mortar relationship bank. What we intend to become however, is the leading digital relationship bank of the Nordic region. Is being the leader among brick-and-mortar banks a good starting position when aspiring to become the leading digital bank? Can Enterprise Architects support such a transformation, and how can we collaborate effectively with others who are also engaged in the transformation? What are the good and bad experiences from the field of attempting to develop the practice of Enterprise Architecture to become more agile, effective, and supportive of transformation?

1. Agile Enterprise Architecture @ Nordea
Mikkel H Brahm, PhD, Head of Customer Experience EA
14.8.2018 – 14.00-14.50
Slides available at slideshare.net/mikkelbrahm

2. Agenda
Nordea’s Vision for the Future
Agile @ Nordea
Nordea Architecture Framework
Some Practical Experience

3. CHALLENGERS
NICHE PLAYERS
LEADERS
VISIONARIES
Completeness of Vision
AbilitytoExecute
Nordea is the leading Brick & Mortar bank
in the Nordic region
Is that good, given that what we want to be is
the leading Digital Relationship Bank?
Gartner, Magic Quadrant

4. 4
Completeness
of Vision

6. Our customer vision is our North star
and our purpose and values our inner compass
Safe and trusted
Anywhere and
anytime
Relevant and
competent
Easy to deal with
Personal and digital
relationship

7. Customers are welcome to visit us in the branch, but not required to
7
Partner
Ecosystem
3rd-party-
branded Banking
Digital Banking
Anywhere & Anytime
Nordea Banking
@ Your place
Nordea
Open Banking
Physical
@ Nordea Banking
Classical Banking Business Model:
Financial Services
in exchange for
Money (margins & fees)
Ecosystem Business Model:
Financial Services and Access to Customers
in exchange for
Money (margins & fees), Information,
Augmenting Services, Branding/exposure, …

8. 8
Ability
to Execute

9. Brick
&
Mortar
From mid-2014 to April 2018
Digital
From April 2018…
We chose a group-wide culture, business, and technology transformation

10. We attempt to erase the IT – Business divide, and operate Nordicly
People who understand IT
People who understand Banking
People who Change the Bank People who Run the Bank

11. 11
Staff
Time
Projects is a temporary organisation to solve a temporary issue
Assigned to Line Assigned to Project(s)
Project Project

12. Time
When issues become permanent, it’s time to change the model
Assigned to Line Assigned to Products / Solutions
Portfolio of
Investments
in Change
Staff

13. Agile @ Nordea = based on SAFe, but also sized by investment level
13
Nordea has introduced the term Hub, which is a semi-stable development organization
• responsible for some Solution (products, services, systems)
• organized according to the variant of SAFe which matches the investment level
= burn rate ≈ number of teams.

14. 14
Nordea
Architecture Framework

15. Gartner
Enable
Business
Outcomes
>
Fill in the
Framework

16. From
Enterprise Architects are the people
who put ‘no’ in innovation
Perception
To
Enterprise Architects are the people
who enable Technology Driven Business Development

17. Simplified organisational chart
Group
Functions
Personal Wholesale
BUSINESS CAPABILITIESCHANGETHEBANK
Group Func.
Portfolio
Banking Technology Trading Technology
Personal
Portfolio
Commercial
Portfolio
CEO & COO
Commercial &
Business
Wealth
Group
Architecture
Wealth
Portfolio
Wholesale
Portfolio
Change Execution Initiatives funded by Portfolios
Product (not Project) funding i.e. ≈ Stable Burn Rate
Architectural Governance conducted by
Capability Architecture Teams

18. Nordea Architecture Framework = Federated
Nordea Architecture Framework was created in 2017 to define a
common architecture practice for the Nordea group and is
encapsulated within the Group CEO Instructions on IT Governance
Group level processes and
bodies facilitate enterprise
level alignment and manage
escalations.
Capability level processes
develop architecture content
in Capability Architecture
Teams (CATs) from a group-
wide perspective.
Initiative level processes
develop targeted architecture
content to support a specific
business or initiative / solution
scope.Source: Nordea Architecture Framework

19. 19
Practical experience
…so far

20. Simplified 2-layer Application Model
Flexible Front-Ends
Enable differentiated
services, and coherent
superior experiences
across channels
Digitized Factory
Enable simplified
automated (“no paper, no
people”) banking exposed
through domain services

21. The facade of a Digital Bank is the lesser effort
• UI & UX that customers can love
• Coherent RESTful banking Service API
• Alignment of national Customer and User models
• Alignment of national & segment Agreement solutions
• Authentication & Signing integrated to
national and industry standards e.g. NemID and OAuth
• New communication infrastructure for digital signing, chat,
online meetings, notifications, call recording, …
• New ways of working for customer service staff to cope
with spontaneous chat and online meetings (e-Branches)
• Aggregate data across own back-ends and 3rd-parties
• Integrate with market infrastructure solutions

22. Coping with sins and omissions of the past is the greater effort
Our Core Banking Replacement Program
is not only about consolidating IT
It is perhaps not even primarily about that
It is about ensuring an operating core
that can support changes to the business
that we cannot even forsee yet

23. The Digital Foundation enables faster delivery of new services
23

24. • Early key enablers like test, preprod, and prod env > 6 month delivery time
=> all features started, none to DOD, de-facto waterfall
=> enablers do require some degree of right-to-left planning
• Enablers handed over from specialists to teams or from team to team
=> difficult knowledge transfer in both directions
• Early service development organized by country due to local back-end skills
=> local variation in what was intended to be common Nordic services
• Introduction of Inner Source model for Foundation services
=> reduced bottle necks and at the same time increased quality and coherence
• Steady improvements to CI/CD chain and skill uplift for teams
=> significantly reduced cycle time and WIP limit now enforced
=> much more reliable commitments = trust = social capital
• Architects better at communicating the vision, runway of architectural enablers,
and make architectural decisions as a cross functional team
A couple of ‘lessons learned’
÷
+

25. Mechanisms
 Culture Transformation Programme
 Combo: Training & Staff Changes
 ”Brick & Mortar” Corporate Culture
 Too few people with Digital skills
Summary
Is Nordea in a good position to become the Leading Digital Bank?
CONs PROs
People
Action
Structure
$
 Country differences complicate
business processes and IT solutions
 Face-2-Face servicing model
outdated
 Harmonize country units’ business
models, services & processes
 Fast Build-Test-Learn loops
 Cost/Income ratio unsustainable
 Autonomous Segments threaten
Simplification Journey
 Significant cost-savings
 Centralization/Strengthening of
Business & IT Development
 Vast legacy IT portfolio with
high degree of local variation
and Technical Debt
 Significant investment
in modernizing Operational Core
(Group Simplification)

26. Thank you!
Mikkel H Brahm, PhD, Head of Customer Experience EA
mikkel.brahm@nordea.com