Core Banking: Navigating Foreign Waters from Home
At KBTG, Core Banking is a pillar of our operations, they are part of every financial movement that happens in our business. KBank and KBTG’s regional expansion strategy is challenging for us, especially the core banking implementation, but there is no question on the ability of our team. They managed to put in place the first overseas Disaster Recovery (DR) system completely remotely, and launched KBank’s first branch in Vietnam without a hiccup, all through a global pandemic.
What is Core Banking?
If we were to draw a flow chart of any transaction journey, Core Banking would be one of the first stops, with an array of equipment and programs to support its functions. KBTG has well established this ecosystem in Thailand, with two fully functioning Data Centers (DC) running simultaneously along with an experienced team to deliver and monitor its operations. Vietnam is the first country where KBTG is bringing over a full Core Banking infrastructure to support KBank operations.
The First Regional Setup
Our plans for Vietnam were initially approved toward the end of 2020 in September and the team leaped into action right away. Requirements from in-house development to outsourcing particular functions to save time were gathered. The budgeting was approved swiftly in October and the solution exploration started immediately. Our official license arrived in January 2021 and the team pushed to launch KBank’s first branch in Vietnam in the same year.
Being paperless was one of the main approaches in building this project, from invoices to approval, having digital documents increased convenience and reduced working time. Applications were gradually deployed and operational in September 2021, DR testing started in October and by November, the first KBank branch was launched. But the effort did not stop there, the team jumped into bringing over services such as digital lending (KBank Loan) and internet banking (KBank Connect) focusing on corporate and SMEs, and digital retail in the form of K PLUS Vietnam. From the establishment of Core Banking, other digital channels were able to follow.
On Site Tasks, but Remote
In practical use, Core Banking is not able to function on its own but requires a whole environment of applications that are connected to one another. Therefore, transporting it to another location brings over a whole ecosystem. For example, functions such as reporting local regulations, in-house payment hubs, interface with local switching to enable transactions did not only require adjusting existing systems but creating new applications altogether. Existing legacy applications such as SWIFT alliances were set up to allow international transactions. Vietnam is special from other countries in that it has a full contact center, which KBank agents promptly support our customers in variety channels such as phone, mail, and chat.
A unique pivot of this project is that the DC is located in Bangkok, while the DR is hosted in Ho Chi Minh. We sourced and bid vendors to house our DR data center, opting for a co-location option to house everything on premise. The normal lead time for delivery is 30–45 days, but during the peak of COVID-19, it became six months. The standard process for this would be a full on-site inspection, but everything had to be transformed in a remote way. Luckily our cooperative vendor was great at looking for work-around solutions and was able to deliver go-live on the expected day.
Navigating Foreign Waters from Home
From the very first step, we found ourselves in a foreign environment even though Vietnam is a close neighbor. KBTG aimed for the highest standard by complying to regulations from both the Bank of Thailand (BOT) and State Bank of Vietnam (SBV), this meant all our actions and documentation had to be approved from both sides.
Language was definitely a challenge, especially in setting up such a technical and important part such as the DR. Meetings were hugely extended, sometimes requiring help from a translator. Anyone the field would know, we deal with quite a few technical words, some of which get lost in translation and others require a complete explanation on the side. In addition, we received many documents or manuals all in Vietnamese, adding the step of translation into the already packed workflow and lead time.
Immediate Shut Down
On a particularly important business simulation day, the team in Thailand and Vietnam were testing out processes in preparation for branch opening day. This was at the height of COVID-19 restrictions, so when one COVID case was discovered in the Ho Chi Minh office building, it was immediately evacuated, every person in the building had to leave. Despite this major disruption the team was still able to move the simulation online and complete the process as planned through remote VPN. This is just one example of the many strange situations we found ourselves in. Dealing with constant lockdowns and restrictions, it was important to keep everyone up to date and involved.
First Day Jitters
On branch opening day, there was excitement and nervousness, but in a good way. It was so important to leave a good impression on our first customers. A war room was set up where the Core Banking unit gathered, a detailed checklist and action list was distributed to every team. We had some pilot accounts opened to serve the first partner customers and internal staff, it was a long journey but we were very ready.
The worst nightmare would be facing malware on the first day of operations and we made sure that would not happen. All hardware was checked and rechecked while keeping everyone in loop.
Truly Teamwork
The team agreed that one of the most essential factors in this success was cross team communication. Constant communications across teams and made sure that everyone was seeing the same picture to avoid problems toward the end.
When asked to express the project in three words, this is what the Core Banking team says:
“Yes we can”
All obstacles were tackled and delivered the project successfully
“One team proven”
Anything can happen but we can also do anything
“Enable, partnership, trust”
Cooperative effort and patience are what got us through
Thanks to the Team
We want to recognize that this is an amazing feat, thanks to every team and all their members for putting in so much effort and passion into this project for a successful delivery. From the Core Banking team, KBTG, KBank, vendors, outsources who accommodated our needs and understood our experience in a new environment. It could not have been done without you! Although this is far from over, we’re looking forward to the next adventure already. The Core Banking team has already started work in a new country, let’s see where that will be!
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