Ping An’s cloud-native technology accelerates digital transformation and Smart Bank implementation
By Hugh Zeng
By the end of 2021, 28% of Ping An Bank’s applications, some 1,700, had been built based on a new cloud- native platform
Ping An Bank (PAB) is one of the earliest domestic commercial banks to embark on a digital transformation. In 2016, PAB complied with the development trend of digital technology and put forward the strategic vision of building “China’s most outstanding and world-leading smart retail bank”, embracing technology-driven breakthroughs in retail banking and enhancing corporate banking strategies.
Early this year, both the Fintech Development Plan (2022-2025) issued by the People’s Bank of China (PBo C) and the Guiding Opinions On The Digital Transformation Of The Banking And Insurance Industry issued by the China Banking and Insurance Regulatory Commission (CBIRC) stated that the banking industry should comprehensively strengthen the construction of technological and data capabilities. And that it must deepen financial supply-side reforms and promote high-quality financial development. This sets the direction and puts forward the requirements for digital transformation of commercial banks in the next phase.
A report submitted to the 20th National Congress of the Communist Party of China proposed to speed up the construction of a digital China, adhere to the innovation-driven development strategy, and insist on self-reliance and self-improvement in science and technology.
To adapt to the new requirements of digital transformation, PAB sets the goal of building a digital bank, an ecosystem, and a platform, to better support the rapid business iteration, low-cost trial-and-error innovation and customer-centric relationship management. PAB uses the all-round cloud-native as the core for agile innovation, resilient operation, efficient reuse and professional market-leading as a breakthrough roadmap to promote its digital transformation into a new era.
PAB aims for quality improvement, cost reduction and efficiency enhancement. As a result, PAB focuses on business data-driven operations, online services, process automation, intelligent decision-making and integration of the front, middle, and back offices. The bank comprehensively deepens the application of financial technology and promotes digital transformation.
PAB’s cloud-native strategy highlights its problem-solving ideas
The digital transformation of commercial banks has deepened. The business side puts forward the requirements of rapid iteration, low-cost trial and error, and customer-centric comprehensive operation and development that requires greater investment in scientific and technological resources and more efficient and agile technological support.
Meanwhile, the technology side faces problems such as limited resources and personnel, occasional production failures, and many redundant constructions. It is difficult for the two parties to adapt and provide a holistic approach.
PAB reengineered the technical and infrastructure system based on the cloud-native technology stack. It comprehensively upgraded its technological, data and risk prevention capabilities. It systematically resolved the main contradictions that hindered the development of banking technology, which unleashed their technological productivity.
With the in-depth implementation of the national fintech development strategy, all-round migration to the cloud has gradually become the consensus choice of commercial banks in China. Cloud-native is a methodology that includes design, development, deployment, and operation that can maximise the advantages of cloud computing infrastructure. The typical technologies involve containers, micro-services, service grids, service line-ups, DevOps, chaos engineering, and unitisation.
By splitting the micro-services of the application, more sufficient decoupling and independent changes can be realised and the delivery efficiency can be greatly improved. The extraction and down-streaming of shared technical and business components lead to reusability, which improves manual work efficiency and supports better business innovation.
Through the containerised deployment of applications, the underlying immutable infrastructure can be utilised more flexibly to fully maximise computing resources and reduce technology costs.
The risk of system changes can be reduced through DevOps technology, grayscale release, automated maintenance technology, and the use of disaster recovery technologies such as full-link stress testing, chaos engineering, and unitisation. This improves the stability and safety of production operations.
With the support of cloud-native technical and engineering systems, PAB can avoid major failures and security incidents and make frequent and predictable major changes. It helps PAB to carry out frequent and rapid business innovation while maintaining steady operations.
Building a cloud-native technology base through Cloud-native 1.0
From 2019 to 2021, PAB carried out the construction of cloud-native 1.0. In 2019, PAB launched the research and development (R&D) of a financial-level distributed system development and the operation suite with a processing capacity of 100 million instructions per second (MIPS) It includes more than 10 technical components such as micro-service development framework. It has unified service registration and configuration centres, distributed transaction and cache components, message queues, a job scheduling platform and data access agent, leveraging the prototype of cloud-native technology base.
Since then, PAB’s new system development and lag system reconstruction have been developed based on this new technology suite. By the end of 2021, about 1,700 applications across the bank had been built based on this development and operation suite. The redundant construction of the system has been significantly reduced. The efficiency of system delivery has improved, and the effect of cloud-native practice has initially appeared.
The systems built by PAB based on this development and operation suite include the unified payment, cloud acquiring, and the new core credit card systems, that were implemented on 1 January.
PAB is one of the earliest banks to realise the distributed transformation of the core business system that was previously based on an IBM mainframe that controlled it independently. The new core system of PAB’s credit card supports two billion transaction accounts and one billion daily transactions by volume. The project won first prize in the 2020 Financial Technology Development Award held by PBOC.
In 2019, PAB simultaneously completed the construction of the Starlink platform for the integration of efficiency tools. The platform introduces DevOps practice, from the perspective of delivering user value, combined with lean and agile thinking. From a comprehensive and systematic perspective, it provides a complete set of code hosting, knowledge management, project collaboration, and source code for PAB’s R&D in information technology.
A full set of performance tools cover the entire R&D lifecycle from static analysis to automated testing, creation and release. In 2020, Starlink passed the first batch of assessments of the DevOps Capability Maturity system and tools of the Academy of Information and Communications Technology, which demonstrates PAB at the forefront of the industry in the field of cloud-native DevOps.
Cloud-native 2.0 accelerates the implementation of Smart Bank 3.0
At present, PAB is comprehensively promoting the efficient implementation of the ‘five-in-one’ model and creating a brand-new Smart Bank 3.0 model. The Smart Bank 3.0 model is a customer-centric, data-driven, intelligent management system driven by the headquarters’ artificial intelligence (AI) brain, a decision-making engine based on the establishment of a scientific customer group segmentation mechanism.
Smart Bank aims to achieve business model innovation guided by their Three Firsts: foreknowledge, foresight and first move. It seeks to achieve three goals: improving profitability, increasing efficiency, and production capacity. It implements three reductions, namely costs, risks, and manpower.
The Smart Bank 3.0 model enables PAB to accelerate its digital transformation, which also puts forward higher requirements for technical systems and engineering capabilities.
In line with the implementation of the Smart Bank 3.0 strategy, PAB’s technology line has upgraded its technical base, business support, and technological governance capabilities. The bank proposed a comprehensive cloud-native construction that covers five enhancement aspects. These are design, R&D, running, operation and maintenance, and disaster recovery.
In the design aspect, PAB built a new architecture governance specification that accumulates architecture assets. It creates application and service design specifications and distributes data model design specifications. The bank uses a domain-driven design to extract public business components and builds a unified business centre platform.
In R&D, the bank improved the performance tool platform to realise the connection of functions and data. PAB has further improved the container service platform to achieve mixed deployment and management of underlying heterogeneous physical resources. It realises the white screen management of the entire runtime, and the service-oriented and on-demand supply of message middleware and databases. It likewise enhanced the governance of microservices.
PAB is building a new generation of financial-level cloud-native operation and maintenance systems to achieve business continuity and comprehensively improve the overall observability. It strengthens end-to-end link tracking, emergency plans and response capabilities. PAB tests capabilities such as link stress testing and chaos engineering.
PAB continuously promotes the construction of disaster recovery systems such as global unitisation that remains multi-active in different places and strengthens simulation drills. On the premise of ensuring stable production, it helps the rapid implementation of new business strategies.
As Ma Mingzhe, chairman of Ping An Group said, digital transformation is a systematic project to improve productivity. As the transformation goes deeper, PAB will adhere to the cultural values that focus on being customer-centric, and the abelief that professionalism creates value. The bank accelerates the implementation of an all-round cloud native strategy, comprehensively changing thoughts, organisations, models, and capabilities. It also promotes the digital transformation of the entire bank from quantitative change to qualitative change, from partial to full coverage of the value chain. It improves the bank’s core competitiveness, contributes more, and delivers a better PAB experience for the robust digital development of the banking industry.
Keywords: Cloud, Cloud-native Technology, Digitalisation, API, Digital Platforms, Data, Retail Banking, Technology, Smart Bank
Institution: Ping An Bank
Region: South East Asia