Banking modernization starts with application modernization, and Huawei Cloud has the solutions to deliver seamless migrations for the financial industry
As banks undergo digital transformations and reshape their services to meet consumer demands, there are many hurdles to overcome – not least dealing with outdated applications.
Therefore, Application modernization is essential for enterprise transformation and is being widely adopted.
According to IDC, 55% of applications will use cloud services to expand functionality or replace inefficient code by 2024. Forrester Research says two-thirds (67%) of enterprises believe modernizing traditional applications is a top priority.
Application modernization solves the problems of reconstruction and migration from traditional applications to new applications and integration between old and new applications.
J.P. Morgan is one financial giant modernizing its applications and already seeing positive results – delivering product features 20% faster, leveraging Software-as-a-Service, and retiring legacy applications.
There are four main factors driving application modernization for financial firms:
- Agile Innovation – Advanced modern technology is more productive, while out-of-the-box tools and AI-driven data also drive innovation
- Ultimate Experience – Delivering a personalized, omnichannel, interactive experience supported by digitalization
- Cost Advantage – Closed, centralized architecture came at a high premium, and obsolete architecture and application technology debt led to high maintenance costs
- Security Compliance – Outdated technologies are unable to cope with new attacks and threats, and some older applications are not patched
According to Gartner, modernization includes multiple methods: redesign, reconstruction, rewrite, cloud platformisation, repackaging and hosting, and replacement.
Cloud-native technology systems help modernize financial applications by embracing DevOps, microservices, containers, and the cloud. These allow accelerated rollouts, improved architecture reliability, efficiency and automation, and dynamic and flexible scaling.
The facts back up the theory. According to various research (from IDC, Nucleus Research, and ZDNet), businesses achieve infrastructure cost savings of 31%, 43% fewer security incidents, and a 40% improvement in customer satisfaction through application modernization.
How to manage a successful cloud migration
Of course, there are challenges for any financial organization looking to move to the cloud. Understanding and assessing cloud migration risks and how infrastructure, databases, middleware, and all the components supporting applications support cloudification is essential. Then, the technology gap exists between the native cloud stack and the traditional development architecture.
Huawei can help by offering application cloud migration planning, cloud service support, and a mature 6R methodology (Retire, Retain, Rehost, Replatform, Rearchitect, Repurchase) that delivers an orderly migration on Huawei Cloud.
Huawei Cloud has key technologies to accelerate the modernization of core financial applications:
- Assembled delivery efficiently supports financial service development and significantly improves efficiency.
- Digital R&D: End-to-end software development production line, ensuring agile, stable, and high-quality applications
- Cloud-native architecture: Microservices with a cell-based deployment model ensures the high availability of services.
- Secure and Trustworthy: Provides end-to-end and full-lifecycle protection for financial applications.
- Resilience: Enterprise-level multi-cloud provides high availability, ensuring zero interruption of core financial applications.
Siam Commercial Bank (SCB) utilized Huawei Cloud’s technology and expertise to deliver a digital loan rollout that developed 45,000 users in just three months. The second largest bank in Thailand is also a pioneer of digital banking in the country, serving 13 million customers. SCB’s digital vision hit new heights in 2021 when it established the fintech SCBX to build a digital banking platform and ecosystem for ASEAN.
SCB wanted to quickly digitalize its loan service to cover more SMEs and individuals. With more services going digital, the group also needed effective management of non-performing loans to keep risks at bay.
Huawei Cloud completed the service rollout within seven months, meeting financial compliance requirements and reducing business loan approval times from months to minutes.
