Accelerating digitalization

  • Ben Yang And Chen Kunte , Vice President – Financial Services Business Unit, Enterprise Group at Huawei And Chief Digital Transformation Officer – Financial Services Business at Huawei Enterprise BG

  • 09.06.2021 10:54 am

Huawei’s I5 Framework Transforms Customers’ Digital Journey

Interview with Ben Yang, Vice President – Financial Services Business Unit, Enterprise Group at Huawei and Chen Kunte, Chief Digital Transformation Officer – Financial Services Business at Huawei Enterprise BG

Themed “Accelerate Financial Digitalization New Value Together”, this year’s annual Huawei Intelligent Finance Summit in Shanghai on June 3–4 was again packed with insightful information, case studies and discussions of trends. A highlight of the summit was Huawei's introduction of its Iframework and elaboration on how it will work with its partners and customers to build an innovative financial ecosystem through five upgrades. Huawei executives Ben Yang and Chen Kun Te discuss with Financial IT how banks and financial companies can benefit from the five upgrades using the I5 framework.

Financial IT: What are the main challenges financial services face post-pandemic? How should financial services respond to these challenges? 

Ben Yang: In the post-pandemic period, there are five major challenges faced by financial services – digitization, agility, risk control, cybersecurity and the lack of customized solutions.

Digitization: The customer’s journey needs to be digitized even more with new experiences, scenarios, and business models. Branch services are required to be digitized to reduce time-consuming staff interactions and offer customized products. There is a need to get payment systems digitized to accommodate broader use of digital payments. Banks must accelerate digital transformation to speed up the trend towards cashless transactions.

Agility: The pandemic has been a real test for companies and banks. Banks are needed to build agile capabilities to serve customers and maintain their operations while protecting employees. All operations and departments, including IT infrastructure, software development, product services and business lines, have to be agile. Without question, the organization and culture must be agile to support the business.

Risk control: During the pandemic, lockdown and company shutdowns have inevitably led to a decline in asset quality. After a lag time, there will be an increase in the rate of non-performing loans. The financial industry needs more efficient risk management to meet this challenge, including credit risk and business continuity risk. It also requires better use of big data and AI technology.

Cybersecurity: Online transactions and interactions have increased significantly with the wider use of mobile applications since the pandemic. With the growing threats to cybersecurity, implementing fraud detection and scam prevention programs is vital.

Lack of customized solutions: Big tech firms around the world are still trying to adapt their extensive capabilities and resources to accelerate entry into the payment field and other areas of finance. With highly customized needs, the financial industry will need to find its own way to navigate through such challenges.

Financial IT: What exactly is Huawei’s I5 framework, and how has it evolved from your previous offering? And how is Huawei’s I5 framework positioned to progress with customers’ current and future needs?

Ben Yang: Huawei I5 is a reference framework for accelerating the financial service industry’s digitalization, especially for banks. It includes Robotic Infrastructure, Agile Innovation, Data Intelligence, Financial Inclusion and Industrial Finance. It provides a completed solution for our customers to meet their needs in every stage of their transformation journey.

For customers that focus on improving their operational efficiency, the Robotic Infrastructure will play a significant role. For customers migrating their workload to the cloud, our Agile Innovation and Data Intelligence are the right choices. Our Financial Inclusion solution is a good fit for those looking at expanding their business to drive financial inclusion. Some customers may also deploy all five I’s in their transformation. This doesn’t have to be in sequence, so we call it a reference framework.

We are currently working with a lot of partners in each of the I’s to tailor our solutions according to their needs.

Financial IT: Explain each of your five upgrades and their benefits.

Ben Yang: Under Huawei’s Ireference framework, the five upgrades include:

  • Robotic Infrastructure – a green, secure, simple, and agile infrastructure that consists of data storage, networking, computing, and power system for Huawei’s customers in financial services,
  • Agile Innovation – a cloud-native 2.0 stack that is “application-centric,” including Operator Service Center (OSC), Application Service Metric (ASM), Multi-Cloud Platform (MCP) and Cloud Container Engine (CCE) turbo. This enables banks and financial institutions to upgrade their services to deal with multiple scenarios, full-process security and trustworthiness, application modernization, and full-stack data intelligence.
  • Data intelligence – a system that ensures all stacks are being intelligent and secured with high performance, low latency and a high usable ratio in the lifecycle of data, unleashing financial institutions’ potential to use data.
  • Financial Inclusion – a solution that includes digital payment, wallet, and microfinance that helps banks to reach more “unbanked” people and businesses, especially SMEs.
  • Industrial Finance – a mechanism that leverages IoT, 5G, blockchain and other innovative technologies to allow banks to have “always-on” and secured data management ability to access the full process of their financial activities across multiple locations and thousands of terminals or devices.

Financial IT: How is the I5 framework different? Have you got examples of I5 working in practice? How are clients benefiting compared with previous systems?

Chen Kunte: The I5 framework empowers our customers in several new ways.

For instance, our Financial Inclusion offering features a touchless and contactless payment feature that enabled KBZ Bank in Myanmar to grow its mobile user base from almost zero to more than six million within 18 months. This ecosystem also features the participation of more than 200,000 retailers, making a huge difference, from user experience, to business competitiveness for various parties during this pandemic.

The largest bank in Latin America, Itaú Unibanco, has been working with Huawei to upgrade its infrastructure using an all-flash storage and networking system for better operational efficiency and improved reliability. This upgrade enabled the bank to lower operation costs with enhanced service quality in the long run.

Other examples include the creation of systems to capture business opportunities and discover risks by mining and analyzing massive data sets. Huawei has supported ICBC Argentina, one of the largest banking flagships of ICBC outside China, to deploy a faster and more stable wireless network. The aim is to improve processing efficiency, implement real-time handling of diverse business demands, and minimize system operating costs. Now, the bank's new wireless network has laid a solid foundation for the fast provisioning of ever-more innovative banking services as well as the rapid implementation of more extensive digital transformation needs.

The I5 framework is highly customizable, and can be configured into various applications to address the needs of banks and financial institutions.

Financial IT: How will Huawei work with partners with I5? How do you foresee them interacting to provide more versatility to your framework?

Chen Kunte: As noted earlier, we work with partners across the globe in each of the I’s. At Huawei, our focus is on the platform, particularly the infrastructure layer, cloud platform and the application enablement platform. We have three types of partners in our ecosystem:

  • Technical partners who work with our infrastructure platform with a focus on areas such as performance optimization;
  • Partners who leverage the platform that we build for banks to provide financial services applications to our customers; and
  • Industry partners who have deep know-how and have close working relationships with Huawei, who can help to add more financial services support for customers
  • Overall, we want to build a truly open and win-win ecosystem with our partners, providing a platform for each partner to showcase their strengths and capabilities.

Financial IT: Describe how you perceive your financial ecosystem evolving? What timeframe do you see this evolution taking place? How is Huawei positioned to meet these developments?

Ben Yang: In the digital world, connecting people to people, people to companies, and companies to companies is critical. The internet giants have already devised scenarios for a seamless flow of people with the requisite logistics and capital for extending the scope of business, anticipating an ever-expanding ecosystem.

With the development of 5G and the advancement of technology, more scenarios will be connected to the digital world in the future. Financial services will be further digitized and become part of all aspects of digital economic activities.

Financial institutions need to find a path according to their own capabilities and needs. They should consider whether to join existing platforms or develop their ecosystem. The “platform” I mentioned refers to an organization that provides eCommerce connections at a wide scale for relevant parties in an ecosystem: from individuals to merchants, subscribers to publishers, service users to service providers; fund platforms connecting wealth management businesses to fund providers connecting with fund demanders, etc. These are all ecosystems in the digital economy.

The key to a successful business model is achieving a large and profitable scale. The profit comes from either the platform itself or the value created by the customer traffic and data that the platform attracts. It needs to introduce high-frequency services to acquire customers, such as digital payments, and low-frequency services like investments, mutual funds, and wealth management to cash out.

The development of 5G will create new standards, open more doors, offer wider connections to the digital world, and expand the market. To capitalize on such evolution, banks need to actively explore and embrace the changes.

Expert help is at hand. Banks and financial companies can easily plug into Huawei’s extensive infrastructure and access our network of connections, covering 5G, cloud, ecosystem, partners and supply chain. Huawei, with all-rounded service offerings and expertise, is well-positioned to assist in the length and breadth of digitized financial communications.

About Ben Yang

Ben Yang, Vice President – Financial Services Business Unit, Enterprise Group at Huawei

Ben has 10 years+ experience in ICT industries with proven leadership and sales track record in the United States, China, Middle East and Africa. Ben oversees the Financial Services Business Unit’s sales, branding, partner ecosystem and global service.

About Chen Kunte

Chen Kunte, Chief Digital Transformation Officer – Financial Services Business at Huawei Enterprise BG

Chen is ex-CIO of the China Merchant Bank and ex-President of the Ping An Bank. Chen has more than 35 years’ experience in finance and technology.

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