NCBA Bank: Investing in Technology to Deliver Inclusive Financial Service
Stone He, president of Huawei Cloud Business in Southern Africa.
Technology is quickly becoming an integral part of everyday life. According to data released by the World Bank, more than 1.7 billion adults worldwide still do not have access to traditional banking methods or to a bank account. For this reason, more and more organizations are looking to bridge the financial services gap on a global scale by delivering inclusive financial solutions that empower all.
With over 64.7% of mobile phone owners without access to a bank account, mobile phone penetration remains the key to financial inclusion. Nairobi, the capital of Kenya, has established itself as a hub for innovation and the strategic use of mobile technology. People from all walks of life can access traditional banking services, such as savings and credit, using their mobile phones on the M-Shwari platform.
Founded eight years ago by NCBA Bank and Safaricom, M-Shwari has empowered millions of customers across Kenya by enabling real-time access to financial services to its more than 35 million users. The service takes advantage of mobile penetration to improve access to financial services across the country.
With the enormous growth observed and increasing customer needs, M-Shwari needed to further enhance its capabilities and position itself for growth.
Digital transformation has increasingly become a key enabler. However, there were still a few challenges to overcome:
- The performance of the live network found it increasingly difficult to support the rapid business development of the bank or to cope with the high traffic resulting from the mobile financial interactions of customers due to the rapid growth of savings and loan services. mobile.
- There was an increased need for rapid technical support for new services and features.
- User experience was greatly affected due to the slow response of the system.
NCBA Bank has embarked on an ambitious project with Huawei, through its partner MuRona Technology, that would allow it to create a next-generation core bank designed to meet the unique business needs of the project.
Huawei has served more than 2,000 financial customers in more than 60 countries and regions, including 47 of the world’s 100 largest banks. It strategically cooperates with 20 major banks, insurers and security companies around the world, and has become a trusted strategic partner for financial institutions in digital transformation. Huawei has taken an open collaborative approach to finance; develop more than 1,200 solution partners, 4,200 service partners and more than 20,000 business partners worldwide.
MuRong Technology, one of Huawei’s solution partners, is a leading provider of new digital banking systems and IT solutions for scenario-specific finance. MuRong Technology offers professional business experience, advanced technical advantages as well as excellent cross-border service delivery capabilities.
Amid the pandemic, Huawei and MuRong Technology focused on the needs of the NCBA by performing a comprehensive analysis of the bank’s services and designing a rigorous scanning solution.
It is Kenya’s first central banking system to use a distributed architecture, intended to support the bank’s business development over the next decade.
After extensive testing for a year, they delivered a next-generation digital banking system in November 2020. The solution included service migration of 80 million small deposit and loan accounts as well as consumer loan accounts, which allowed the new system to better provide services with increased capacity and performance. It is Kenya’s first central banking system to use a distributed architecture, intended to support the bank’s business development over the next decade.
On the first day of operations, the system migrated data from 60 million accounts at once, reaching 420 TPS at the peak of system performance. Built on a distributed DevOps framework, the Next Generation Digital Banking System provides agile and robust technical support for NCBA Bank’s digital financial services.
Huawei’s private cloud platform facilitates centralized resource management and flexible provisioning; while GaussDB supports night reports and complex queries, reducing the expense of traditional databases. At the same time, the distributed financial services system can scale horizontally, handle highly concurrent requests, and eliminate the single point of failure (SPOF). The underlying private cloud platform and distributed financial services system ensure that the operation of the system remains stable. Ultimately, this makes the system less complex, reduces the cost of middleware overhead, while supporting future online banking system migration and rapid innovation in financial services.
The new basic system allows:
- Higher Transaction Capacity: System performance increases from 60 TPS to 420 TPS, supporting the rapid growth of the bank’s business.
- Lower Total Cost of Ownership (TCO): There are fewer expensive databases and ESB requirements. The number of databases goes from 108 to 56 by introducing new architectures and technologies. More flexible API gateways are used to replace ESBs, improving system flexibility and reducing 5-year system TCO by more than 50%.
- Improved System Flexibility and Reliability: Multicluster design increases system reliability to 99.99%. The new architecture at the software layer level allows for horizontal expansion of the system and can support rapid deployment of services in the future.
The new M-Shwari core banking system opens up a world of possibilities for the bank, enabling it to deliver on its promise to customers. At the heart of NCBA Bank is a drive to give clients the right financial solutions to enable them to do more.
In addition, NCBA Bank has redefined its position as an innovator in the financial services industry by creating the next generation digital banking system. âThe choice of technology used has allowed NCBA to execute its business model with important considerations such as customer experience.
“Today, any business is a question of experience. We provide our clients with world-class experiences while consuming financial services. Our goal is to be Africa’s most popular digital services platform, âsaid Eric Muriuki Njagi, Director of Digital Affairs at NCBA Bank.
The cooperation between NCBA Bank and Huawei laid the foundation for the bank’s long-term sustainable development. Huawei Cloud Southern Africa Business President Stone He said the joint investment in building a great cloud system for NCBA Bank was a victory for the company.
âIn addition to our vast experience and NCBA Bank’s willingness to venture into a higher level of digital growth, we are impressed with the relative flexibility and ease of this partnership. The banking sector is a key driver of economic growth for Kenya and Huawei Cloud is delighted to be a part of such an impactful and influential project, âsaid Stone.
He added that the joint investment in building a great cloud system for NCBA Bank was a victory for the company.
In the years to come, fintechs will continue to grow, Bank 4.0 will become a reality and new banking services will emerge. NCBA Bank tackles current bottlenecks while accelerating digital transformation to become a leader in African financial services and embrace Bank 4.0.