Bank of Communications Builds a Lakehouse DaaS Platform for High-Quality DevelopmentApr 06, 2023
Founded in 1908, Bank of Communications (BoCom) is one of the oldest banks in China and one of the only banks in modern China to have the authority to issue banknotes. It reopened after a reorganization on April 1, 1987, and, with its head office in Shanghai, it is the first nationwide state-owned joint-stock commercial bank in China. The bank was listed on the Hong Kong Stock Exchange in June 2005 and on the Shanghai Stock Exchange in May 2007.
Its services include commercial banking, financial leasing, fund management, asset management, trust, insurance, offshore securities, debt-for-equity swaps, offshore financial services, and etc.
In 2021, BoCom was honored "Top 500 Global Companies" for the thirteenth consecutive years and was ranked No. 137 in terms of revenue by FORTUNE. It was ranked No. 10 among the global top 1,000 banks in terms of Tier-1 Capital rated by The Banker, jumped 1 place than last year.
On August 25, 2022, the 2022 Financial Technology Innovation Awards by The Asian Banker, an international prestigious financial journal, were unveiled at the China Future Finance Summit. The lakehouse data as a service (DaaS) platform developed by Bank of Communications (BoCom) using Huawei Cloud Stack's intelligent data lake solution, FusionInsight, was awarded the Best Big Data Application. The story behind this award is about BoCom's vision and foresight to spearhead data governance, which reshapes their core competitiveness, revitalizes marketing, risk control, management, and other legacy applications, and dramatically improve efficiency in this new era of the finance sector.
"Banking Everywhere, Never at a Bank" — This prediction of the future of banking was first proposed in Bank 4.0, and is becoming a reality at lightning speed. To keep up with the dizzying pace of change, Bank of Communications (BoCom), a pioneering bank, has started their digital transformation journey. Over the past few years, BoCom has seen their business grow fast, their services grow more diverse, and their service processes more intelligent. However, the rapid growth and better intelligence have come with an unprecedented amount of data and introduced more complicated ways to make use of that data. To maximize the value of their data and accelerate high-quality development, BoCom has invested heavily in innovation. They have established a cloud foundation, integrated data resources, and spearheaded data governance.
Seizing Key Opportunities for Digital Transformation to Forge Ahead
BoCom set a mid- and long-term strategic goal of becoming a first-class international bank with remarkable advantages. In line with this goal, they have intensified efforts to enhance financial inclusiveness, expand trade finance, revolutionize technology, explore more comprehensive wealth management approaches, and adhere to green development. They are constantly undergoing digital transformation for high-quality development.
Data is at the heart of digital transformation and is also crucial to the development of BoCom. With financial services growing at lightning speed, financial institutions are having to process a much greater volume of data with more types and from more sources than ever before. In the past, the data was distributed in data warehouses or data lakes, which led to repeated data storage and challenged data management and analytics. BoCom started to seek ways to integrate data warehouses and data lakes, so they could work together for the same purpose and help establish a data platform allowing for unified management and access of metadata and data. After a year and a half of hard work, they established a lakehouse DaaS platform, which was a crucial step in their digital transformation journey.
Establishing the Lakehouse DaaS Platform
BoCom established the lakehouse DaaS platform with two goals. The first goal was to improve data quality and timeliness, expand the data scope, and extend data services while driving business growth. The second goal was to promote efficient decision-making, precision marketing, and full risk prevention and control while easing the burden of junior-level employees.
To achieve these two goals, BoCom took concrete steps:
- They used Huawei Cloud Stack FusionInsight MRS to deploy a cloud-native data lake. Its real-time and batch data access enables unstructured data to be connected to the data lake. It has become a unified data foundation to aggregate data across our entire group. Using the real-time data lake of FusionInsight MRS, they have developed new technological advances such as real-time collection and computing and integrated batch and stream processing to collect, calculate, analyze, and use data in real time. A wide range of real-time and quasi-real-time business scenarios have been covered.
- They also leveraged Huawei Cloud Stack's distributed data warehouse product, GaussDB(DWS), to deploy a high-performance cloud data warehouse on the data lake, create a data model for streamlining and analyzing data, and provide unified views for operations management and risk control using a label library. This way, a unified DaaS platform was established. It uses microservices to provide data APIs and analytical tools like searching, rule, and AI engines, so service personnel are able to analyze data themselves. The platform provided the data APIs as unified API services, enabling actions such as querying customer labels and checking for risks, for downstream users. Plus, they have set up unified data standards and management regulations for the entire data governance and management process.
- BoCom standardized data security and lifecycle management and established an integrated R&D management and control platform. This enables data development, testing, and maintenance on a single, unified platform.
After establishing a robust lakehouse DaaS platform, BoCom continued to dive into cloud to seek stronger support for our business.
Reimagining Business for Real Benefits
The lakehouse DaaS platform has reimagined BoCom's business in many ways:
- Efficient decision-making: Statistics on the overall business performance, inter-industry comparisons, real-time positions, and real-time changes are at the fingertips of executives to help them make the right decisions.
- Precision marketing: Customer profiling and real-time labeling make it easier to reach their ideal customers.
- Comprehensive risk control: A risk monitoring list can be generated using a rule-based computing engine, controlling all risks throughout the pre-loan, in-loan, and post-loan processes.
- Intelligent operations: Employee labeling and task profiling enable automated task assignment.
With these improvements, BoCom has made some big leaps forward:
- Marketing: The customer conversion rate has been increased by 164%, and can be increased by 5- to 10-fold when sub-second data access is available.
- Risk control: Fraudulent behavior can be identified in real time, which reduces the number of incidents by 52%.
- Operations: Banking data can be searched and analyzed in real time to drive informed decision making.
The DaaS platform benefits three roles in BoCom:
- Executives: The DaaS platform aggregates all of the data from across the entire work chain of the bank and provides a virtual command and control center for executives to keep abreast of business performance and changes to any metrics they wish to track. It provides meaningful insights for executives to make informed decisions.
- Marketing personnel: BoCom used the DaaS platform to deploy a marketing strategy management center, which has dramatically improved marketing efficiency. With this center, marketing personnel at all levels of the organization, from the headquarters to the branch offices, can configure their own marketing strategies. Then, the center will automatically select target customers and engagement channels and push promotions out to the customers.
- Account managers: BoCom used the DaaS platform to redesign the workbench of account managers, which has helped them work more efficiently and create more value. The new workbench, running on PCs or mobile terminals, has account managers' working processes built in. It also integrates many intelligent assistance tools such as a net revenue estimation tool and a notification tool that reports changes to large-amount deposits.
The next-level customer experience, innovative business models, supercharged efficiency, and more intelligent way to utilize data are all real benefits Huawei Cloud Stack has delivered to us.
BoCom has worked with Huawei to transform its use of big data platform. The bank has cut latency for a huge amount of data and provided powerful data services for marketing, risk control, supervision, and operations. They have also centralized monitoring, enabled process-based management, and visualized data assets for data governance. BoCom is committed to maximizing data value and becoming a fully digital bank.
Infusing cloud tech into banking operations helps commercial banks accelerate digital transformation and maximize market value. BoCom has dived into cloud to infuse more digital advances like AI and IoT into traditional processes; to digitize business flows, maximize data value, and transform decision-making from an experience-based way to a digital and intelligent way; and to streamline our organizations, processes, and mechanisms. Diving into cloud has a significant meaning to BoCom. It not just upgrades our tech and transforms our business value. What's more important is that it reshapes the data mindset and improves application capabilities of all personnel of the bank, which will help them maintain momentum for digital transformation.