Connecting people with finance: The importance of digital transformation during the COVID crisis

The Coronavirus crisis has caused the largest and quickest digital transformation the financial services industry has ever seen.

As self-isolation measures were implemented across the world this spring, IT departments had to rapidly enable the majority of staff to work from home, while making sure systems could cope with unprecedented spikes in online banking and mobile app usage by customers.

The COVID changes affected every organisation differently, but broadly while some have struggled with a lack of scale and funding, many challenger banks and FinTech firms have capitalised on their cloud-native, digitally flexible nature, as bank branches became at least temporarily redundant.

Incumbent institutions, often burdened by legacy systems and physical sites, have had to significantly increase investment in tech infrastructure to keep up with those further ahead before the pandemic beginning to reap operational reliability and resilience rewards.

Itau Bank case study

Itau Bank is the largest bank in Latin America, operating in more than 20 countries across the world and investing around $2 billion in technology research and development every year.

Itau Bank chief technology officer Fábio Napoli explained that it has almost 84,000 employees, around 55,000 of which had to be set up for remote working at short notice.

“We used to work with 3,000 people in home office daily, and in a week we put 22,000 people at home, offering the technology for them to be able to do so – equipment such as 4G modems, as well as office supplies, chairs, desks, etc.”

Thankfully the bank was already well on its way to digitalisation, with a focus in recent years on improving customer service. But given the social distancing restrictions that are now necessary, this strategy has had to shift in the last few months.

“We understand that the point of presence, things like the ATM, the human contact in branch, is something people will continue to have, but the more we can make the self-service available, giving people digital channels, this is what Itau believes should continue evolving,” commented Napoli.

“Itau understands that it is a technology company, and without technology we will not be able to evolve and offer the products that the market requires of us,” he stated, adding: “Since we have a lot of competition with the FinTechs, the bank understands that digital transformation is crucial to keeping up.”

Data centre capacity

In 2014, the bank built two large-scale data centres. However, its storage devices were unable to cope with the requirements of continuous service expansion in recent years.

IT teams demanded stable and reliable running of service systems, but the existing storage architecture was becoming outdated, with expired warranties on the live network and a high component fault rate further complicating things.

Itau carried out proof-of-concept tests for alternative products, finding that Huawei’s solution gave stable storage performance, with its RAID-TP technology tolerating concurrent failures of three disks without interrupting services for instance.

Overcoming storage bottlenecks was one of the key imperatives for the bank, as system efficiency suffered from performance allocation that did not match the service system, and the SAS production system restricted the core service system for personal cards.

Before Huawei, Itau Bank’s data centres used 154 sets of network storage devices, occupying a lot of cabinet space in the three data centres, but providing only 36.9 petabytes of available capacity. The extremely high power consumption of the devices and cooling systems also increased the total cost of ownership.

Huawei’s OceanStor all-flash arrays reduced power consumption for devices and cooling systems each by 45 per cent and maintenance cost by 65 per cent.

All-flash storage technology

Itau Bank’s IT director Augusto Stracieri explained that his team has always tried to be forward-thinking in terms of innovation. In this case, it was mid-2017 when they started looking into all-flash technology, but it took time to prepare for such an upgrade.

“Last year our studies began to point out that all-flash technology was ripe enough for a smooth evolution, we began to the see that, from the compression, data reduction, resilience and quality of these solutions, we can make a balance between performance, cost and efficiency.”

Stracieri continued: “Huawei demonstrated a high level of probation, technical competence and effort to get the equipment installed and operating – even with this COVID-19 pandemic.”

The Dorado solution was delivered in March, ahead of schedule, and crucially before the pandemic really took hold in Brazil.

“It is behaving better than expected in relation to data reduction rate and performance,” he added. “We are still beginning migrations, but here we can already realise excellent performance, and that all attests that investment in Huawei's Dorado V6 was very assertive.”

For more information about Huawei’s intelligent finance solutions, please visit here.

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