4 Zeros Resilience Underpins the Path to AI Banking

Jason Cao

CEO of Global Digital Finance, Huawei

Brett King

International Bestselling Author, Speaker, Founder - Moven, Radio & Media Personality

Best Selling Author of Bank 4.0 and Augmented, Host of The Futurists Podcast, Brett King, and Head of Digital Finance for Huawei, Jason Cao, sit down for a chat and a cup of tea in Shanghai to discuss fintech and the direction of mobile banking.

Brett King: Welcome to this special edition of the Futurists and the Breaking Banks podcast. We have a very special interview for you with the CEO Head of Digital Finance for Huawei in China, Jason Cao.

As we do every time we meet, Jason and I like to compare notes. Now, the biggest news in fintech outside China this year has to be the incredible growth of Nubank in Latin America, where they passed 100 million customers. This is the largest bank now outside of Asia, which is amazing. Just 5 or 10 years ago, people would never have believed that this was possible. They have more customers than JPMorganChase now. We also know Revolut this year became profitable. They're now bigger than HSBC in terms of their retail customer base.

Jason, what have you seen over the last 12 months that interested or surprised you?

Jason Cao: I agree with you on Nubank, it’s amazing what they’ve achieved. This last year, digital banks have thrived and mobile payments have really taken off worldwide. This has taken banking to new heights. The key behind this shift is customer experience; I think fintech and digital banks are just responding to their ever-evolving needs and expectations. Part of this response has been an increase in the use of GenAI and other new technologies to uplift the industry. Incumbent banks are really having to think about how to move faster.

Another very big topic is regarding resilience and legacy infrastructure. Five years ago, when speaking to banking giants, they would talk to me about how certain technologies were going out of date. Legacy architecture was taking huge investment to run, with agility and innovation stunted as newer technology became necessary to move forward. Not to mention, there was a distinct lack of talent. Everyone wanted to shift to a new platform. But it’s a tough job that requires care and deliberation, with no quick fix. This put many banks off. However, in the last 12 months, there has been a renewed sense of urgency. Everyone is taking the leap. They have to do it, they have to move on.

Brett King: It's interesting you see that posture, as you're working with some of the largest banks worldwide. But there are still a number of banks who've decided it's too hard. Would you say that, at a boardroom level, there is an acceptance that technology is the foundation of banking from this point forward?

Jason Cao: I do believe so. Some may not be at this stage quite yet because the legacy issue is just too big a fish to fry, but I think a lot of visionary bankers have recognized the importance of change. A famous banker put it down to customer experience, and the way to cater to that is through technology. Fintechs have already lifted expectations surrounding mobile services — if you are an incumbent bank and you cannot reach the same level, you will definitely be left behind.

Brett King: So, what you're saying is, we need to be looking at fintechs as having set a new benchmark. And that's the difficulty, because they have brand new technology stacks with all of the latest gizmos. For them, integrating things like artificial intelligence is much easier.

Let’s talk about resilience. What does that mean with regards to where the infrastructure of financial services is going? What do we need to do to make it resilient?

Jason Cao: To tackle new and existing threats, whether it be fraud or cyberattacks, we must rethink how to manage resilience. You cannot just look at the system; we must also consider the customer journey. This means looking at the payment start and access points, the channels undertaken, and the core banking system. Our answer is the 4 Zeros.

Brett King: So, what are the four zeros?

Jason Cao: This is a fundamental part of our methodology and is the starting point to our solutions.

The first of the four is Zero Trust. To go back to the example of access, we need to ensure end to end data security. Anti-ransomware is a huge consideration for banks right now.

The second is Zero Wait. We need to make transactions as swift as possible. Every second makes a huge difference, and we shouldn’t underestimate that.

Next is Zero Downtime. This is really critical, as it refers to zero disruptions to service. Particularly during transaction peaks like seasonal sales, where volumes can inflate by tens, even hundreds of times, keeping services running has been an enormous growing pain for mobile banking.

The last is Zero Touch. This is about making operations autonomous and smart. When we move from legacy to hybrid cloud architectures, this means one machine becomes thousands. This brings enormous complexities for maintenance. Zero touch means everything is self-maintaining.

Brett King: Now, if we look at Huawei Cloud in terms of the development of this, you've gone towards more of an edge computing architecture. What comes next?

Jason Cao: Embracing cloud is necessary, but that doesn’t mean we all need to go for the same model. Every country and every bank has its own gene, its own regulations. We think a hybrid cloud approach is the right choice, and can be tinkered with to fit each individual organization.

Brett King: Let’s talk about infrastructure in China generally for a moment. We’ve seen incredible advances in new energy and digital infrastructure here, and China is taking this very seriously, isn’t it?

Jason Cao: Certainly. Let me illustrate how China has become a very digital-driven economy through a figure from McDonald's. They revealed that in China, their digital orders accounted for 90% of all orders received. Over their top 6 markets outside China, it only accounted for 40%. That’s less than half. This is indicative of not just a shift in customer habits but a wider shift to digital systems throughout the chain, from supply to retail.

Brett King: Excellent. That’s it for part one of our interview. We’ll be right back with part two: How GenAI Sparks Growth and Innovation in Leading Banks.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy, position, products, and technologies of Huawei Technologies Co., Ltd. If you need to learn more about the products and technologies of Huawei Technologies Co., Ltd., please visit our website at e.huawei.com or contact us.