OCBC Bank bets on open source, AI to stay ahead of the game

Image courtesy of Markus Spiske on Unsplash

Individuals and businesses are now highly reliant on mobile banking apps to send and receive money, pay bills, and conduct various transactions. Consequently, banks must ensure that their apps are not only secure and easy to use, but can offer other practical functions as well.

To attain these goals, organisations such as OCBC Bank have turned to open source, which has allowed them the agility and scalability that they require, noted Dedy Lim, Head, Technology Architecture (Singapore), OCBC Bank.

“As part of our transformation and modernisation of applications towards our new digital core, we are adopting open source. This is part of our engineering capability, as well as our resilience strategy against dependency on proprietary technology. This will also expedite our innovation, as well as power our data-driven solution,” said Lim, during the Red Hat APAC Innovation Awards 2022 event, where OCBC Bank won the award for digital transformation.

Keeping up with customer demand

The digital transformation within the banking industry has no doubt powered the boom of e-commerce, and the success of remote and hybrid work. During the COVID-19 lockdowns, for instance, banking apps and digital wallets kept the world running, as people could not go out of their homes.

Within the next three years, the ASEAN market is expected to more than double its current e-commerce transactions, a phenomenon that financial institutions ought to be prepared for, remarked Albert Chai, General Manager, Rest of Southeast Asia, Red Hat.

“How do businesses and organisations cope with these accelerating changes in behaviour, which now take weeks and days to shape? Obviously, they need to think about how to respond to market changes a lot faster, particularly when introducing new features,” he said.

To keep up with market demand, OCBC Bank is modernising its IT infrastructure on two fronts:

  • The first one is via its core channels, such as internet banking, mobile banking, and contact centre apps.
  • The second one is centred on its Enterprise Data Science Platform (EDSP), which will help scale up its AI deployment.

At present, the bank is adopting a combination of different environments.

“We are adopting the hybrid cloud model so that we don’t have any dependency with any particular provider. The important thing for us is our ability to do auto scaling to support platform needs, and we need to continue to strengthen our enterprise data science platform. We are scaling up our AI deployment by leveraging the OpenShift technology. Likewise, with the open standard and the connectivity with other APIs, these make our application a lot more intelligent,” OCBC Bank’s Dedy Lim said.

As OCBC Bank aims to migrate its core apps and services to the cloud, Lim shared their strategy for the ongoing move:

“What we do is that we start small. We start with the customer-facing application, the digital channels like our internet or mobile, as well as our contact centre applications. Then we go in further into the core banking functions, like payment, loan modernisation, and loan applications. It’s really a long journey, and we’re still in the midst of that.”

For its EDSP, OCBC Bank is leveraging Red Hat’s OpenShift platform. OpenShift’s open standard and API support for third-party integration made it possible for the EDSP to streamline OCBC Bank’s internal data science processes, and enabled the development of more intelligent business apps.

The EDSP is helping OCBC Bank to drive growth in the areas of credit analytics, customer chatbot optimisation, and anti-money laundering.

To support such digitisation efforts, Chai has observed that companies are increasingly thinking of doing more with less. “This is where we’ve seen the power of automation, in terms of automating your product and services rollout, in terms of getting more bang for the buck when you move to cloud-native platforms and cognitive services,” he said.

The executive also pointed out that it used to take considerable cost to roll out new products in a traditional monolith environment. Now, however, there has been a shift towards microservices where one can innovate at the edge, which is faster and more cost-effective. “Companies are obviously re-engineering their processes, whether in developing, running, and supporting applications, so basically the whole notion of DevSecOps,” Chai noted.

Partnering for the future

Despite the recent innovations in banking, the fact remains that it is one of the most tightly regulated industries, which therefore presents long-standing challenges to enterprises wanting to move their legacy applications to the cloud, for example.

However, regulatory bodies are warming up to the benefits of cloud, particularly with what has transpired over the last three years during the pandemic.

“Due to this high expectation of citizens on how they want to be engaged, wherein instead of going to a branch to do a transaction, they just want to do everything online, I think the public sector has also upgraded the appetite for innovation,” Red Hat’s Albert Chai said.

Therefore, more and more organisations from heavily regulated industries are adopting open-source platforms like OpenShift, said Guna Chellappan, General Manager, Singapore, Red Hat.

“Because it’s a regulated industry, they need to have controls, governance, and security in place, so they are looking at a hybrid cloud platform that cuts across an on-premises technology and a pure public cloud. We tend to see a lot more adoption coming from regulated or large enterprises that are required to have the processes in place, or the platforms in place,” Chellappan shared.

Looking ahead, OCBC Bank is planning to launch its new anti-money laundering application, which uses AI running on OpenShift.

“Innovation is really centred at our customer and employee experience, and we are leveraging our digital capability, as well as those emerging technologies, like web3. We are on our next journey of AI deployment to further enhance our customer experience, as well as improve our business processes,” OCBC Bank’s Dedy Lim said.