In today’s business landscape, the conversation about AI is ubiquitous. The core of implementing AI lies in the trust that banks deliver to their customers, ensuring that they have confidence in entrusting their valuable assets to financial institutions.
The initiative of Double Core Banking or Horizontal Core Banking Scale Project by KBank and its subsidiary KBTG goes beyond just expanding technical capabilities. It reaffirms and strengthens the trust to better accommodate rapid growth, provide swift and reliable services, and instill confidence in customers.
Blognone provides an insight into the behind-the-scenes of KBank’s Double Core Banking project under the name Core Banking Horizontal Scale Project. It delves into why KBank needed to enhance its core banking systems with two cores and showcases how KBTG handled this massive project, including risk management and resilience to achieve success without downtime.
What is Double Core Banking?
Double Core Banking elevates the capabilities of the Core Banking System to support a larger volume of activities, transactions, and user accounts within the banking system as a whole. This approach, known as Horizontal Scale, distributes tasks across multiple cores within the same plane, moving away from relying solely on a centralized structure, in contrast to Vertical Scale, which focuses on upgrading resources like CPU.
Expanding the core system to accommodate the growth of digital transactions not only meets user expectations for speed and accessibility but also helps mitigate risks by distributing workload across multiple subsystems, reducing the impact of single points of failure. Moreover, it minimizes downtime, a key factor in maintaining customer satisfaction and service continuity in financial services.
This structural adjustment also fosters confidence in an era where AI technology plays a crucial role, as the rapid increase in data and transactions necessitates an efficient and flexible backend system for both speed and accuracy. Moreover, laying a foundation for easily scalable systems opens up opportunities for financial institutions to develop new innovative services and better compete in the rapidly evolving technology landscape.
The more users there are, the greater the need for trust
Voranuch Dejakaisaya, the Executive Chairman of KBTG, highlights how digital technology has escalated transactions through online channels rapidly. For KBank, this is evident through the K PLUS app, with over 23 million users and a 5.4-fold increase in transactions since 2019, totaling 11.6 billion transactions.
In addition, the latest MAKE by KBank app boasts 2.95 million users and has created over 8.7 million Cloud Pockets. Behind this success, the core banking system had to work tirelessly and be ready to continually expand to meet the growing demand and integrate AI further into the business in the future.
Prior to Double Core Banking: The Evolution of KBTG
KBTG was founded in 2016, and since then, it has undergone significant transformations, keeping pace with the changing global landscape. In the KBTG 1.0 era from 2016 to 2018, the focus was on establishing a stable foundation for the bank, from improving deposit and credit systems to enhancing the K PLUS application in preparation for the future.
Subsequently, KBTG transitioned into the KBTG 2.0 era from 2019 to 2023, emphasizing adaptation to global changes, restructuring architecture and infrastructure, expanding business to regional levels (such as China and Vietnam), and undertaking M.A.D. Transformation. During this period, KBTG reduced total working hours by over 60,000 man-hours, accelerated work by 2.25 times, achieved a 198% ROI, and ensured over 90% of the team enjoyed work satisfaction.
Looking ahead to 2024, the KBTG 3.0 era underscores the Human-First x AI-First Transformation, emphasizing the integration of AI technology with a human-centric approach. Double Core Banking is a response to the growth in financial transactions and changing consumer demands in an era where AI is increasingly integrated into various business aspects.
Jaruun Kiatipas, the Vice Chairman of KBTG, likens the implementation of Double Core Banking to performing heart surgery, as it involves not just inserting a new core but also connecting it seamlessly with the existing network of over 183 systems without affecting customers.
Key Milestones of the Project: Supporting the Growth of the Bank
One of the largest IT projects of KBTG, the addition of Core Banking, required an investment exceeding 4.5 billion baht to enable the primary banking system to accommodate up to 50% more transactions by 2031.
A Crucial IT Project for KBTG
Napawn Patipansan, the Managing Director of KBTG, highlights the challenges of managing the Double Core Banking project, emphasizing the importance of making the new core banking system online without downtime.
This project demanded multi-departmental collaboration, including business units, IT, Infrastructure, and external partners, underscoring the critical need for teamwork in planning changes, conducting rehearsals, and testing together incessantly.
“The essence of overseeing a project of this scale lies in anticipating potential challenges,” adds Kawkanit Pinnindaja, focusing on the Incident & Problem Management aspect. By transitioning from incidents to systematic problem management, the project reduces the risk of issues during system expansions and prioritizes proactive problem-solving to swiftly address disruptions, minimize downtime, and mitigate overall system impact.
In terms of Change Management, which involves overseeing organizational changes, a Project Plan and Freeze Schedule are set to ensure clear communication and coordination with stakeholders regarding freeze periods to avoid conflicts during system changes. The Freeze schedule is continuously fine-tuned each month until the project completion.
Additionally, ITSM Tool Modification is employed to notify and address Change Requests in the system during the Freeze period promptly, allowing the Change team to contact the requestors immediately to reschedule or mitigate any potential issues.
These processes aim to tackle worst-case scenarios (Prepare for the Worst) and aim for optimal results (Work for the Best), emphasizing systemic problem management and disciplined change management to reduce the risk of downtime and maintain service continuity.
Managing Projects with the 3Cs Strategy
Phuvadol Songwasultorn, the Assistant Managing Director – Project Management at KBTG, shares the experience of managing a large-scale project with over 1,000 team members that spanned more than 22 months, employing the 3Cs strategy: Communication, Collaboration, and Commitment. The project achieved success without any system downtime or customer-reported incidents at the end of the journey.
“In terms of Communication,” Phuvadol details how the project required coordinating over 1,000 individuals, holding over 2,000 online and offline meetings and integrating interfaces from 183 applications. This was all accomplished seamlessly with a shared vision and clear communication to ensure a smooth and successful collaboration.
In Collaboration, the project expanded its scope to involve more than 50 departments internally and externally within the organization, relying on seamless communication to facilitate collaborative work and deliver tangible outcomes.
Furthermore, a key aspect of this project was fostering Commitment, ensuring a collective dedication to address over 1,000 weaknesses within the system promptly, consuming over 10,000 man-nights, and spending over 10 months on system testing with over 30,000 test cases to enhance system reliability.
The Heart of the Matter: Confidence Amplified
Ruangroj Poonpol, the Group Chairman of KBTG, concludes by emphasizing that when it comes to AI, trust is paramount. Many tasks are delegated to machines rather than humans, necessitating confidence in the reliability of the systems used.
Moreover, as banks delve deeper into AI, the need for amplified trust grows two-fold, as it is crucial to prioritize customer care and align with the direction of KBTG 3.0 — developing AI under the Human-First x AI-First approach. The Double Core Banking project further enables KBank to accommodate increased transactions efficiently and with enhanced system stability and trustworthiness.
TLDR: The implementation of Double Core Banking by KBank and KBTG goes beyond technical expansion to reinforce customer trust, support digital growth, and integrate AI seamlessly for a more efficient and reliable banking experience. Collaboration, communication, and commitment were key pillars in successfully managing this large-scale project.
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