Absa Bank Kenya Partners with Huawei to Build a New Digital Foundation for Branch Networks
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Absa Bank Kenya is listed on the Nairobi Securities Exchange and is one of Kenya's leading financial institutions. Established in 1916, the bank has been a major player in Kenya's financial landscape. During its climb to the top, it has engaged in personal and corporate banking, enterprise, credit cards and bancassurance along the way, and now holds a strong position in the space.
Absa Bank Kenya is part of Absa Group, one of the largest financial service institutions on the continent with a presence in 12 African markets and offices in London and New York. Domestically, the bank is present in 38 counties, with 83 branches, 212 ATMs and a robust Internet and mobile banking platform.
The bank offers end-to-end financial solutions to retail, enterprise and corporate customers. With its sights set high, it has made connections across the globe, which has given it the scope to provide cutting-edge financial solutions to its clients. It has also been associated with a number of market firsts, such as the launch of the first ATM, Sharia-compliant banking and unsecured lending.
Facing ever-changing customer needs, Absa Bank regards "digital enablement" as one of the company's key strategies. It provides convenient and high-quality services for employees and customers, and further enables the creation of a digital Africa.
The recent pandemic has reshaped the landscape for traditional commercial banks. The physical isolation brought by COVID-19 was a huge force steering the direction of technology, and new, diversified requirements from bank users pushed the sector into rapid digital transformation. As a result, "mobile first" has dominated as a concept. As consumers embrace mobile banking, digital channels are absorbing many traditional banking transactions, and "mobile money" has become king. As a result, customer footfall at bank outlets has seen a sharp decline, leading to many closures. However, bank outlets remain an important channel for serving customers. According to a McKinsey study from June 2020, "The focus of branch offices will evolve to help customers with their complex needs." In another Deloitte study on the outlook for banking and capital markets during 2021, "nearly half of bank correspondents said their institutions are considering real-time interactions with bank staff through intelligent ATMs..."
There is no doubt that bank outlets are still indispensable when it comes to institutional digital transformation. However, banks must re-examine the position of offline outlets. In the future, branch offices will act as face-to-face channels and customer experience centers where customers handle complex transactions, solve problems and receive financial advice. Smart bank branch networks are going to be the key for banks to support their digital strategies.
The problem is, traditional bank branch network architectures can no longer keep up with the needs of digital branches, and even hinder their development.
The cost of traditional WAN networking solutions for branch connection is too high. Most banks traditionally rely on Multi-Protocol Label Switching (MPLS) to implement network connections between headquarters and branch sites. Digitalization has meant that demand for the real-time data transmission of financial transactions, services, and files has exploded, not to mention the demand for digital office and high-quality video/voice. However, the cost of constructing further MPLS links is exorbitant. Most banks hesitate in the face of such extravagant costs. This has become an obstacle to the establishment of smart bank branches.
Traditional solutions also fall short of meeting the requirements for banking agility and flexibility. The construction, configuration, and launch of a network at a new bank branch could take weeks or even months using old methods. In certain areas, a lack of stable networks and on-site professionals stunted the delivery of services that should have otherwise been available.
Low network O&M efficiency is also a pain point. For so many banks, the network structure is complex and invisible, branch locations are far dispersed, and network diagnosis cannot be performed remotely. As a result, when network problems arise, IT technicians must make their way to various sites to handle them. It could take from hours to days, a disaster for operations and an issue that causes banks to periodically hemorrhage money.
Since the traditional branch connection solution has been rendered obsolete, what is the best solution for digital branch construction? Software-defined wide area network (SD-WAN) technology is the answer. SD-WAN, a next-generation technology and service, can help banks roll out smart branches by constructing a powerful network based on agility, flexibility, scalability, security, and compliance.
As business expands, the bank hunted for the best network infrastructure out there. "We strive to offer our customers a seamless digital experience. We want to enable them to bank at their own convenience, whenever, wherever," said Moses Okundi, CIO of Absa Bank Kenya. To make this possible, the bank needed to build a new infrastructure. It needed next-gen technology to improve banking services, reduce O&M costs, and enhance user experience.
It was at that pivotal point that Huawei and Absa Bank Kenya's technical team met and discussed the bank's needs at length. Based on their actual requirements and digital strategy, as well as Huawei's strong technical reserves and experience in enterprise networks and financial digital transformation, Huawei provided Absa Bank Kenya with a customized NCE-Campus-based SD-WAN solution. In addition to common SD-WAN capabilities, this solution comes with some other unique advantages including:
• High-performance and congestion-free forwarding: 3 times better than the highest performance in the industry, able to meet SD-WAN development requirements for the next five years.
• Intelligent application routing ensures user experience for key applications: Application-level intelligent traffic steering + 5G plus fiber on-demand scheduling + A-FEC together enable 20% video packet loss without frame freezing or artifacts.
• Full-process automation:
- The solution supports multiple ZTP modes including emails, USB flash drive, etc. Network deployment at branches can be performed within minutes.
- Branch, device, application and link statuses are all visualized.
- It is capable of centralized management and simplified O&M.
Absa Bank Kenya also selected Huawei as its digital transformation partner to build a cloud-based network between its headquarters and branches. The bank holds Huawei's SD-WAN solution in high esteem, as it meets its service expansion and digital innovation requirements.
What does an SD-WAN-based branch cloud network bring to Absa Kenya?
"We have finally gotten to a point where we can manage and distribute traffic evenly across tech from all kinds of connection providers. The value of this is that it gives us resilience in managing overall connectivity," states Okundi. The branch network of Absa Bank Kenya has indeed set a new stage for intelligent traffic steering. It means the network can dynamically select MPLS or internet links based on application and MPLS link quality to ensure that key services are properly catered for. On top of this, based on Huawei's exclusive algorithm support, even if the quality of the internet link is not so good, communication quality can still be ensured, which means that MPLS finally has a cost-effective alternative.
Huawei also provides the iMaster NCE-Campus O&M platform for Absa Kenya, which can display the O&M quality of devices, applications, and traffic. This platform visualizes the application traffic of all branches, allowing the IT team to monitor dynamic data and adjust the bandwidth of each branch swiftly. This brings efficient and intelligent operations, as Okundi explains; "My tech team now has a very good level of visibility regarding the usage of our connectivity partners. We are able to see where the usage is and how the traffic is distributed. If worst comes to worst and manual intervention is required, our team can pinpoint where things went wrong, which makes their intervention much more efficient."
This is just the tip of the iceberg when it comes to the benefits provided by SD-WAN. Absa Bank Kenya's intelligent cloud-based branch network will serve as the foundation for the financial giant's digital transformation. As Okundi extrapolates, "It's like a statue made of Lego. Our strong foundation of technology is like the lowest layers of building blocks that hold up the rest of the structure. It gives us a platform to really offer cutting-edge digital solutions to our customers. Right at the very bottom is a strong connectivity foundation."
As time goes on, this powerful branch network will further promote the intelligent upgrade of Absa Bank and eventually help bank outlets evolve into intelligent customer experience centers. This digital foundation will continue to support the bank's business expansion and innovation so that it can provide Kenya with the most advanced financial services possible.