Transformation is well underway among financial services institutions (FSIs), as competing demands from customers wanting more flexible digital solutions must be balanced with enhanced regulatory requirements. Sandstone Technology is an Australian FinTech offering digital banking solutions that streamline back-office processes so that FSIs can focus on improving the customer experience. With over 24 years of experience in the market, Sandstone operates throughout the Asia-Pacific region and has a growing presence in the UK.
Initially, most clients had been running Sandstone products in their on-premises environments. However, in 2018, the company launched Sandstone Cloud Services (SCS) as a managed-services delivery model for its software, using the Amazon Web Services (AWS) Cloud platform. Sandstone Technology is also a Select Technology Partner in the AWS Partner Network (APN).
SCS operates according to a simple principle: Let the builders, who know the product best, manage it. Sandstone follows the same model for its internal technology. “Where there’s a managed service from AWS, it enables us to focus on building our differentiated product rather than doing the heavy lifting of engineering things ourselves,” says Chaitanya Pinnamaneni, chief technology officer at Sandstone.
The IT team set up SCS using Docker containers for fast deployment and compatibility with Sandstone’s microservices architecture, which makes it easier and more consistent to scale the service globally. They are using Kubernetes as a container orchestration tool and Amazon Elastic Kubernetes Service (Amazon EKS) to run the Kubernetes infrastructure. “Amazon EKS takes away all the complexity of building clusters and is critical to our operation,” Pinnamaneni adds.
Since launching SCS on AWS, Sandstone has maintained 99.9 percent availability for its systems. “As SCS is architected for high availability and resiliency, we are able to support high- availability targets while maintaining agility of deployments. Furthermore, not having to deal with hardware issues while running on AWS definitively helps,” Pinnamaneni says.
With a focus on continuous integration (CI), SCS customers receive four times more releases than Sandstone customers managing the software on premises. “We’ve been using CI pipelines for a long time, but until recently we didn’t have a way to extend them into production because the customer environments were always different,” Pinnamaneni explains.
Michael Phillipou, chief customer officer at Sandstone, adds, “By managing our solutions in SCS, we can future-proof our clients’ digital platforms, ultimately giving them frictionless and far more frequent releases under a more cost-efficient model.”
Sandstone chose to chart its cloud future with AWS because of its strong security posture, global presence, and innovation mindset. Pinnamaneni says, “AWS teams are constantly working on improving the technology, and that fits our culture of innovation very well. Furthermore, the platform has proven its ability to run regulated workloads across the world.”
SCS customers benefit from out-of-the-box compliance that evolves to match changing regulations. This includes local standards such as the Australian Prudential Regulatory Authority’s CPS 234, international compliance controls such as ISO27001:2013, and alignment with Payment Card Industry Data Security Standard (PCIDSS). “Our customers don’t have to spend thousands of dollars to rearchitect every couple of years or hire someone to constantly review technologies as regulations evolve,” Pinnamaneni explains.
Sandstone follows recommendations from AWS for hosting a secure landing zone and has preconfigured SCS per industry standards and best practices. It is using Amazon GuardDuty for intelligent threat detection and AWS CloudTrail to track user activity.
By choosing the SCS delivery model, FSIs can free up IT teams to focus on digital innovation. “Speed of delivery has traditionally been a challenge because IT departments in FSIs have many projects in the pipeline, which can create a bottleneck,” Pinnamaneni explains. “The pace of delivery is accelerated with SCS because it isn’t dependent on the banks’ IT.”
By choosing the SCS delivery model, banks can get onboarded with Sandstone’s products in just 6 months, whereas on-premises onboarding takes 12–18 months. For FSIs eager to begin their digital transformation journey, this timesaving is critical. Furthermore, because SCS has a pay-as-you-go model, it is often easier to get budget approvals from financial institutions for Sandstone’s products deployed in the AWS Cloud versus the capex investment required to deploy Sandstone’s products on premises.
The simplicity of outsourcing certain aspects of lending and acquisition with SCS helps FSIs build their digital business. SBS Bank—a New Zealand bank using digital solutions to reach parts of the country where it has no physical branches—became one of SCS’s first customers for the Sandstone Apply product. For SBS Bank, Apply expedites the time it takes for online applications for the bank’s term deposits, savings, and transactions accounts.
In July 2020, the bank was declared the winner of Canstar’s Most Satisfied Customers Award 2020. The award recognizes SBS Bank with a five-star rating for digital banking based on its ability to satisfy customer needs digitally and at speed, which is critical to business operations. “SBS has a strong focus on digital acquisition that is reflected in our strategy, and SCS is playing a key role in this,” says Andrew Rushton, virtual channels manager at SBS Bank. “By implementing SCS, SBS has gained new capabilities and time savings through the ease of using this service. We’ve improved our digital onboarding experience with Apply and received multiple instances of positive feedback from our customers,” Rushton adds.
Looking ahead, Sandstone is considering expanding the use of cloud-native machine learning tools such as Amazon Rekognition. Sandstone currently uses this service for document identification as part of its Digital Intelligent Verification Assistant (DiVA) product.
The company is also actively building its go-to-market strategy to expand in the UK. “We work very closely with AWS to make sure our services are fit for the market,” Phillipou says. “To do this, we leverage all aspects of our AWS relationship, whether it’s marketing, the technology, or simply getting guidance on best practices.”