Case Study: How Kiwibank Transformed with AI and Cloud Technology

Kiwibank, the largest New Zealand-owned bank, embarked on a bold digital transformation journey to improve its employee and customer experiences. Known for its purpose to make Kiwis better off, Kiwibank faced challenges due to rapid growth and an aging technology stack that struggled to meet the demands of customers seeking digital solutions. To address these issues, Kiwibank adopted a strategy to leapfrog its technology capabilities, delivering innovative offerings through a modern, flexible tech stack and next-generation digital solutions.

Key Takeaways

• Aligning decisions with a clear strategy enabled Kiwibank to balance trade-offs and ensure alignment among leadership and stakeholders.
• Investing in in-house talent, agile ways of working, and a cultural shift were pivotal to the success of the transformation.
• Rapid deployment and iterative improvements facilitated faster learning and minimized risks.
• Building new capabilities on the side while maintaining the core business operations accelerated the transformation.

Approach

Kiwibank adopted a comprehensive approach to its transformation, beginning with a well-defined strategic roadmap. Drawing inspiration from global examples, the bank focused on thinning out legacy technology while simultaneously building a cloud-native tech stack. This dual strategy allowed Kiwibank to manage risks and deliver value concurrently. The transformation also included a deliberate shift in mindset, emphasizing collaboration, agility, and cross-functional teamwork. By forming in-house squads of skilled engineers, architects, and data scientists, the bank created a culture that prioritized speed, quality, and continuous improvement.

Implementation

The transformation involved replacing Kiwibank’s core banking platform with a cloud-native solution while remediating over half of its existing tech stack. To accelerate progress and minimize risks, new capabilities were implemented outside the legacy systems, enabling safe experimentation and rapid learning. These modern capabilities laid the foundation for a phased migration of workloads and customers. Cross-functional teams worked in agile squads, combining technical expertise with business acumen to deliver foundational technologies that improved operational efficiency and customer experiences. Kiwibank’s incremental rollout approach ensured that its transformation progressed without disrupting day-to-day operations.

Results

The results of Kiwibank’s transformation were significant. Seventy percent of customers now engage with the Kiwibank app more than once a day, reflecting enhanced digital experiences. The bank achieved a sixfold improvement in service downtime, establishing itself as a regional leader in service availability. Despite heavy investment in its digital transformation, Kiwibank maintained strong financial growth, achieving a 7% annual increase in profit before taxes. These outcomes demonstrate the tangible benefits of its innovative approach.

Challenges and Barriers

Kiwibank faced several challenges during its transformation. Making strategic trade-offs, such as balancing coexistence risk, time-to-value, and migration risk, required careful deliberation and alignment among leadership. Shifting to a digital-first mindset and new ways of working presented initial cultural hurdles that needed to be addressed through targeted upskilling and team alignment. Additionally, ensuring that the transformation did not disrupt business-as-usual operations demanded meticulous planning and execution. Despite these challenges, the bank’s commitment to agility and learning through action enabled it to overcome obstacles effectively.

Future Outlook

Kiwibank’s transformation underscores its commitment to becoming the preferred financial institution for New Zealanders. Moving forward, the bank aims to continue leveraging cloud-native technologies to enhance digital capabilities and customer experiences. The phased migration to the new platform will remain a key focus, ensuring a smooth transition while maintaining service quality. Kiwibank’s iterative approach will enable it to adapt to evolving customer needs and market conditions, fostering innovation and sustaining momentum.

To get the latest AI transformation case studies straight to your inbox, subscribe to AI in Action by AIX — your weekly newsletter dedicated to the exploration of AI adoption in business.

Elevate your understanding of AI transformation. Browse AI adoption case studies searchable by company, industry, use case, and technology.

Sources:
Leapfrogging the competition with a blueprint for bold transformation

Let’s talk

Whether you’re looking for expert guidance on AI transformation or want to share your AI knowledge with others, our network is the place for you. Let’s work together to build a brighter future powered by AI.