The Business of Money in the New ICT Ecosystem

2016/04/19 • Feature, Finance, New ICT • Views: 450

Spending money has never been easier. We can now make purchase decisions from home, pay for ice cream with a Quick Response (QR) code on a smartphone while taking a walk, and even send “paperless” money gifts to newly married friends.

A new, ICT-enabled financial ecosystem is now a part of daily life. Banks are no longer the center of the financial world — they are just nodes in a much larger ecosystem. Innovative ICT has changed consumer behavior as well. Consumer spending online has skyrocketed, and managing personal wealth via the Internet is commonplace.

Financial institutions are at the forefront of a transformation toward customized banking services for large, diverse global financial markets. Banks are now turning to modern ICT to better handle rapid market changes and shifting customer needs.

Modern ICT

Thankfully, the days of paper transactions, supervisor approvals, and long customer queues are over. ICT now connects bank branches via networks to accelerate data transmission and transactions. Automated Teller Machines (ATMs) help clients deposit and withdraw money 24 hours a day without assistance.

By the year 2020, smart devices will generate approximately 50 billion connections across the globe. Financial transactions over computers, mobile phones, and networks will make up a large part of that business. To stay competitive, banks must make financial services accessible to clients at any time, in any location, and on any device.

The Big Picture

Banks have accumulated more client data than emerging Internet financial institutions, which means banks can extract greater value from their data for customer products and services.

Since 2014, China Merchants Bank (CMB) has been pioneering diverse financial services using Big Data analytics. CMB’s branch in Shenzhen deployed a Big Data application platform from Huawei, with these results:

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1. Reduced SMS broadcasts by 82 percent while reaching 95 percent of the target audience.

2. Implemented real-time transaction queries as far back as 5 years ago rather than 12 months.

3. Shortened the time for credit reporting from 15 days to 10 minutes.

4. Improved the success rate of micro-loans for small businesses by a factor of 40.

5. Reduced losses from financial asset risks by 50 percent.

The Big Data platform works with CMB’s production system to reinvent financial services, converges structured and unstructured data for Big Data analytics, and helps CMB build a well-trained Big Data support team.

When Visa and MasterCard stopped payment services in Russia in March 2014, President Putin responded by signing a law establishing the National System of Payment Cards (NSPC), which is fully owned by the Bank of Russia, the central bank in the country. The Bank of Russia would operate the NSPC independently of the Visa and MasterCard systems to guarantee financial service security and reliability.

Huawei installed clusters with more than 100 x86 servers and 2.8 PB of storage space to handle an average daily volume of about 10 million NSPC transactions. To ensure financial data availability and payment service continuity, the active-active data center solution introduces Transparent Interconnection of Lots of Links (TRILL) and Ethernet Virtual Network (EVN) technologies to limit a remote replication response to 10 ms at 3,000 input/output operations per second. The elastic network architecture accommodates business growth for the next five to ten years, simplifying data center upgrades and capacity expansion.

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Modern ICT like Huawei’s FusionInsight Big Data platform for the NSPC makes it possible for banks to achieve business success, stay competitive, and protect their customer base. As ICT shifts from a support function to a business driver, innovator, and transformer, new ICT will emerge to inspire service innovations that make the business of money simpler and smarter.