“We have a view or a mission to be Africa’s most valued digital platform for financial services which then means we are seeking to move to not just identify ourselves as a bank but actually identify ourselves as a marketplace upon which financial services are offered, upon which customers can then find innovations that impact positively their daily life. So that also was a primary motivation for the investment we made with HUAWEI (e.Huawei.com) and the continued collaboration with them.” – Eric Muriuki Njagi, Group Director for Digital Business, NCBA.

Mobile technology has stood out as a key driver with over 1.1 billion out of the 1.7 billion persons without access to a bank account owning a mobile phone.

Access to financial services is an integral part of the global drive towards an inclusive financial system that empowers all. Global statistics report that over 1.7 billion adults worldwide still don’t have access to traditional modes of banking or a bank account. With technology becoming an integral part of day to day life, more organizations are looking to it to bridge the financial services gap. Mobile technology has stood out as a key driver with over 1.1 billion out of the 1.7 billion persons without access to a bank account owning a mobile phone.

Nairobi, the capital of Kenya, has stood out as a hub for innovation and strategic use of mobile technology. People from all walks of life can access traditional banking services such as savings and credit using their mobile phones on the M-Shwari platform. Established eight years ago by NCBA Bank and Safaricom, M-Shwari has empowered millions of customers across Kenya by enabling real-time access to financial services for its over 35 million users. The service builds on mobile penetration to enhance access to financial services across the country.

With the tremendous growth observed and increased customer needs, M-Shwari needed to further enhance its capabilities as well as position itself for growth.

Digital Transformation Is a Key Enabler

Digital transformation has increasingly became a key enabler. However, there were still a few challenges that needed to be addressed:

Live network performance was increasingly unable to support the bank’s rapid business development or cope with high traffic stemming from customers’ mobile financial interactions, due to the fast growth of mobile savings and loan services.

There was increased need for fast technical support for new services and features.

User experience was greatly impacted due to slow response from the system.

The challenge to design and build a next generation core banking system was given to Huawei and its partner MuRong Technology.

A Next Generation Core Banking System

NCBA Bank took on an ambitious project with Huawei through its partner, MuRong Technology, which would see it build a next generation core banking system designed to suit its unique business needs.

Huawei has served more than 2000 financial customers in over 60 countries and regions, including 47 of the world’s top 100 banks. It strategically cooperates with 20 large banks, insurers, and securities companies around the world, and has grown into a trusted strategic partner for financial institutions in digital transformation. Huawei has adopted an open collaboration approach in the finance field, developing more than 1200 solution partners, 4200 service partners, and more than 20,000 sales partners worldwide.

MuRong Technology, one of Huawei’s solution partners, is a leading provider of new digital core banking systems and Information Technology (IT) solutions for scenario-specific finance. MuRong can offer professional business experience, advanced technical advantages, and excellent cross-border service delivery capabilities.

Amid the pandemic, Huawei and MuRong Technology focused on NCBA Bank’s needs by conducting a comprehensive analysis of the bank’s services and designing a rigorous digitalization solution.

After extensive testing over a year, MuRong delivered a next generation digital core banking system in November 2020. The solution included migrating the services of 80 million small deposit and loan accounts as well as consumer loan accounts, which allowed the new system to provide better services with increased capabilities and performance. This is Kenya’s first core banking system that uses distributed architecture, which is slated to support the bank’s business development over the next decade.  Built on a distributed Development and Operations (DevOps) framework, the next generation digital core banking system provides agile and robust technical support for NCBA Bank’s digital financial services. On the first day of operations, the system migrated data from 60 million accounts all at once, reaching 420 Transactions Per Second (TPS) at the peak of system performance.

Ensuring stable systems running is the underlying private cloud platform and distributed financial service system. Huawei’s private cloud platform facilitates centralized resource management and flexible provisioning; while Gauss Database (GaussDB) supports night reports and complex queries, cutting the expenditure of traditional databases. High-reliability and high-performance OceanStor Dorado all-flash storage helps customers quickly roll out services. At the same time, the distributed financial services system can scale horizontally, process highly concurrent requests, and eliminate any Single Point Of Failure (SPOF). Ultimately, this makes the system less complex, reduces the cost of middleware overheads, while also supporting future e-banking system migration and rapid financial service innovation.

The New Core System

Higher transaction capability: System performance increases from 60 TPS to 420 TPS, supporting the bank’s rapid business growth.

Lower Total Cost of Ownership (TCO): There are fewer costly databases and Enterprise Service Bus (ESB) requirements. The number of databases has dropped from 108 to 56 by introducing new architectures and technologies. More flexible Application Programming Interface (API) gateways are used to replace ESBs, improving system flexibility and slashing the five-year system TCO by more than 50 per cent.

Enhanced system flexibility and reliability: A multi-cluster design increases system reliability to 99.99 per cent. The new architecture at the software layer enables horizontal system expansion and can support fast service rollout in the future.

Digital Transformation, Reshaping the Future of NCBA Bank

The new M-Shwari core banking system opens up a world of possibilities for NCBA, enabling the bank to deliver its promise to customers. At the heart of NCBA Bank is a drive to empower customers with the right financial solutions to enable them to achieve more.

The cooperation between NCBA Bank and Huawei has laid a foundation for the bank’s long-term sustainable development. Indeed, NCBA Bank has reshaped its position as an innovator in the financial services sector by building a next generation digital core banking system.

In the coming years, Financial Technology (FinTech) will continue to grow, Bank 4.0 will become a reality, and new banking services will emerge. NCBA Bank is addressing current bottlenecks while accelerating digital transformation to become a leader in African financial services and embrace Bank 4.0.