Amazon Web Services Inc. said Union Bank of the Philippines will migrate its IT infrastructure from on-premises to the world’s leading cloud by 2022.
The migration is intended to accelerate the bank’s digital transformation, improve customers’ digital banking experiences and strengthen financial inclusion in the Philippines by bringing financial services to remote parts of the country.
UnionBank will also realize a cloud-only IT transformation strategy, becoming the first major bank in the Philippines to be fully hosted in the cloud.
Today, 70 percent of the Philippines’ 110 million citizens live without access to financial services, according to the Milkin Institute. Using AWS’s proven infrastructure and capabilities, including containers, compute, storage and databases, UnionBank is creating new digital banking experiences—accessible from mobile phones—that will scale to provide millions of Filipinos with access to financial services, including bank transfers and money withdrawals, even in very remote areas.
UnionBank’s digital metrics gained significant traction this year, with strong first-quarter results compared to the same period last year. Close to 60,000 new digital bank accounts were opened every month, an increase of 4.37 times from the same quarter last year. Digital transactions increased by 380 percent from the same quarter last year.
UnionBank uses Amazon API Gateway and Amazon Elastic Container Service to build new mobile banking products with microservices that support any application architecture, regardless of scale, load or complexity.
The bank integrated electronic “Know Your Customer” (eKYC) capabilities into its mobile app, allowing customers to submit documents digitally to open a bank account instead of via post or by visiting a physical branch. Customers can also use the app to transfer money to other banks and deposit checks simply by taking a photo of the check.
When the migration is complete, UnionBank will run almost 400 mission-critical applications on AWS, including Finacle Core Banking and SAP HANA Enterprise Cloud, to further modernize its IT infrastructure, drive operational efficiencies and innovate new services.
By scaling its SAP workloads on demand using AWS, UnionBank expects to reduce infrastructure maintenance and operation costs by $1 million over the next five years. UnionBank is also migrating over 900 virtual machines to VMware Cloud on AWS. As a result, it expects to generate savings of over 30 percent over five years and create a return on investment in less than 18 months.
In addition, the bank expects to benefit from increased staff productivity, reduced unplanned downtime, and increased business agility through faster deployment of new, externally-facing applications.
To accelerate its digital transformation by building cloud fluency across the organization, UnionBank is investing in a cloud training program for staff. The bank is providing training courses designed by AWS Training and Certification to more than 500 employees, including both in-depth technical training for information technology staff and cloud fundamentals training for business stakeholders.
The program is also designed to foster a culture of learning to help UnionBank realize its cloud-only IT strategy faster guided by robust IT risk management, data protection, data governance and cybersecurity frameworks.
“UnionBank is using AWS to bring banking to the millions of people in the Philippines who need access to financial services to help uplift their lives,” said Dennis Omila, executive vice president and chief information and operations officer at UnionBank.
“The breadth and depth of the world’s leading cloud provider enables us to more quickly launch new financial services, including a mobile bank on wheels to scale financial inclusion in remote areas and help Filipinos everywhere to bank digitally. Now, more consumers, farmers, fishers, and local businesses will have access to the tools to help better manage cash flow, making it easier to send and receive payments,” he said.
“Banks across Southeast Asia are adopting cloud to exceed their customers’ expectations, pursue new opportunities opened by evolving regulations, and address challenges presented by the ongoing pandemic. These firms ultimately recognize cloud as a business and technology enabler,” said Conor McNamara, managing director at AWS ASEAN.
“By moving its infrastructure to AWS, UnionBank gains access to an unmatched portfolio of cloud services to deliver new financial solutions and experiences and solve meaningful customer problems quickly and at scale while reducing operational costs. We’re excited to work with UnionBank to create an end-to-end digital banking experience in the cloud that will help support access to more financial services in the Philippines and enable fundamental banking services from anywhere,” said McNamara.