Tuesday, 31 January 2023

Mox Bank improves core banking through modern technology stack and API-first solution engine

5 min read

By Jeff Villapando

The bank partnered with Thought Machine’s Vault to launch a greenfield, cloud-native digital bank offering multiple retail products, leveraging a microservices-based architecture hosted on the cloud.

  • Mox Bank’s partnership with Thought Machine leveraged a microservices-based architecture hosted on Amazon Web Services (AWS). 
  • Its new customer base grew by 50% after four months of implementation
  • Thought Machine’s Vault functions as a universal product engine capable of powering a greenfield bank 

Mox Bank’s partnership with Thought Machine was recognised as the Best Core Banking Implementation for Small Bank at The Asian Banker Technology and Innovation Awards Programme 2022 based on its strong impact on customer growth and improvement of core banking technology.

Mox Bank’s partnership with Thought Machine leveraged a microservices-based architecture hosted on the cloud 

The bank’s goal was to build a secure and flexible platform made up of best-of-breed solutions that could be deployed in real time. Mox Bank relied on in-house, event-driven microservices to integrate with Vault, software as a service (SaaS), and AWS-hosted services and channels. Its AWS Virtual Private Cloud (VPC) hosts in-house cloud native services packaged as containers. 

The bank partnered with Thought Machine’s Vault to take a greenfield, cloud-native digital bank live, with multiple retail products such as current and savings account (CASA), credit card, and loans. It leveraged a microservices-based architecture, hosted on the cloud (AWS). The project kicked-off in 2018, with the CASA launch on September 2020, and credit card and loan-on-card launch in 2021.

Mox Bank’s strategy is to use, whenever possible, managed services from the cloud vendor such as  Amazon Elastic Kubernetes Service, Amazon Managed Streaming for Apache Kafka (EKS, MSK) to fully digitise and orchestrate bank services through Vault application programming interface (APIs). This reduced costs and operational footprint. Meanwhile, knowledge on credit scoring, anti-money laundering (AML) and fraud is sourced from Standard Chartered, its parent bank. Non-differentiating, but key services for running the bank are operated under the SaaS model to reduce complexity and cost. These include payments, cards, identification and verification (ID&V) and helpdesk. 

Meanwhile, CIMB Bank Philippines (CIMB PH) and OneConnect’s Gamma Core banking solution are full IT solution for digital banking. It includes cloud infrastructure, a full set of digital banking applications, as well as all the needed IT operation service. The solution is cloud-based, straight-through processing, and flexible to integrate with external partners. It enables businesses to offer a full-digital customer experience at lower operational cost. Individual customers can either apply loans via mobile application, or from external partners’ channels. 

MOX Bank’s new customer base grew by 50% after four months of implementation

Thought Machine's Vault supported growth in the bank’s customer base by 50% in four months since implementation. The number of customers has since grown to 300,000 in April 2022 and to 350,000 by end of May, boosted by applications for Mox Credit. Deposits also grew steadily, reaching $700 million (HKD 5.5 billion) as of end May 2022. Growth in loans business also doubled since the end of 2021.  

The Vault solution addressed key functionalities such as configurable smart contracts, product agnosticism, cloud native system, microservice-based architecture, and engineering-led product design which enabled Mox to design the optimal architecture for the bank of tomorrow. 

CIMB PH’s loan disbursements grew to $44.9 million (PHP 2.5 billion) and loan application turn-around-time was reduced by 70% in 2021. OneConnect also helped CIMB PH build a standardised IT operation framework, enabling the bank to better integrate with partners. All services and data from CIMB’s legacy systems were migrated to OneConnect platform.

Thought Machine’s Vault functions as a universal product engine capable of powering a  greenfield bank 

Thought Machine’s advanced core banking engine functions as a universal product capable of powering a greenfield bank, surpassing all incumbents in terms of functionality, customer experience and usability. The modern technology stack and API-first solution integrating debit and credit services, enabled Mox Bank to offer innovative products that could be launched within eight months.

A real time, API and microservices-first architecture enabled the efficient creation of new bank services, and the ability to quickly change the technology set-up as project needs evolved. A long-standing partnership between Mox Bank and Thought Machine was key to the success of the project, with both sides providing subject matter expertise. The project also extensively used ‘battle-tested’ open source and cloud native technologies to ease deployment and efficiently use resources. Mox Bank continues to leverage Thought Machine’s Product Library to deliver new products in a fraction of the time of previous launches.

Meanwhile, risks during project implementation were properly managed through OneConnect's delivery framework coupled with deep understanding of the banking business. Risks emanated mainly from the complexity of solution delivery, and integration with more than 20 external partners of CIMB. To mitigate risk during solution delivery, both parties formed a project steering committee (PSC) to monitor overall progress, and resolve conflicts that may impact timeline or quality of delivery. The project management team reports weekly to the PSC on the status and risks identified, and follow through with PSC’s decision to ensure delivery. To mitigate risks from external partners, a dedicated project manager with a work stream supported every partner during implementation. Through the work stream, progress on system integration and commercial tasks with partners is monitored and reported to the project director and the PSC. 

About The Asian Banker

The Asian Banker is the region’s most authoritative provider of strategic business intelligence to the financial services community. The global research company has offices in Singapore, Malaysia, Manila, Hong Kong, Beijing, and Dubai, as well as representatives in London, New York, and San Francisco. Its business revolves around three core business lines: publications, research services and forums.

www.theasianbanker.com



Keywords: Cloud, Greenfield, Digital Bank, API, Core Banking Technology
Institution: Mox Bank, Thought Machine, AWS
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