Embracing Digital Transformation: BDO Unibank's Journey to Banking Excellence

Paul Siy

CTO and Head of Infrastructure Operations at BDO Unibank, Philippines

BDO Unibank, the largest bank in the Philippines, embarked on a remarkable digital transformation journey four years ago. Recognizing the rising tide of digital banking in the country, BDO took on the challenge to lead the forefront of banking in the Philippines. Together, I’ll walk you through some of our experiences, accomplishments, and partnerships that have shaped BDO’s digital transformation story.

Adapting to the New Normal

We are, by a large scale, the number one bank in the Philippines, with more than 5,000 ATMs nationwide and a current market capitalization of around US$12.7 billion. Last year, we reached more than US$1 billion in revenue.

Our digital transformation journey began during the pandemic, a time when the need for digital services became more prominent than ever before. We were beginning to see the digital transformation of the banking industry as a whole, particularly in the Philippines, so we decided that in order for us to really participate and be at the forefront of banking, digital transformation was something that we had to prioritize.

Initially, we faced numerous challenges, including the lack of tools and infrastructure for remote work and digital banking services. However, we swiftly addressed these hurdles, deploying remote access tools for our workforce and enhancing our digital banking capabilities. These efforts allowed us to seamlessly serve our clients through both digital and physical channels, enabling uninterrupted transactions during trying times.

To enhance connectivity and flexibility, we partnered with Huawei to deploy an enterprise Wi-Fi network across multiple BDO locations. This replaced the traditional wired connections, providing our users with greater mobility and convenience. The Huawei enterprise Wi-Fi solution significantly improved collaboration within our organization, facilitating video conferencing and enabling teams to work efficiently regardless of their physical location. In terms of the data center scenario, we can now also replicate databases from one data center to another without any lag. Huawei's contribution has been invaluable in supporting our digital transformation initiatives.

Addressing the internal challenges of digital transformation has not always been easy, but there have been some external challenges that we have had to face as well.

Addressing Financial Inclusion and Market Challenges

The Philippines, like many developing countries, has had to confront difficulties in financial inclusion. Approximately 60% of the population lacks access to financial services, hindering economic growth and prosperity. This also means that a vast proportion of financial transactions in the country are still cash-based. We are moving towards a digital transaction-based economy, but there is still a long way to go. I foresee it taking several years before we get there.

In the meantime, there are numerous non-financial institutions, including insurance and investment companies, who are thriving. One of the country’s main sources of foreign capital comes from our overseas Filipino workers, who send a lot of money back through remittance. Therefore, keeping foreign exchange in place really is key. The government is continuing to implement expansion of financial services so that we can work to help people who are unbanked or underbanked.

BDO's Strategy and Infrastructure Transformation

So, what is BDO’s strategy? BDO's digital transformation strategy centers around software-as-a-service (SaaS) adoption, followed by cloud migration and on-premise solutions. We prioritize application and infrastructure transformations in collaboration with our partners. Currently, approximately 40% of our workloads are on the cloud, encompassing both private and public cloud environments. However, on-premise systems continue to play a vital role, particularly in our core banking operations, where cloud compatibility remains a challenge. With the assistance of Huawei, we have established real-time replication between our two data centers, ensuring operational resilience and business continuity.

Ensuring data integrity and efficient backup processes were key considerations for BDO. To address these concerns, we implemented data center replication, enabling seamless database synchronization between our two data centers without any latency issues. Additionally, we initiated a project to migrate our backups from traditional tape storage to modern storage media, leveraging Huawei's OceanStor Protect and partnering with Commvault, a backup software provider. This transformation has enhanced data management, minimized risks, and significantly improved backup and restoration processes.

Embracing Environmental Sustainability

BDO Unibank is committed to environmental sustainability and actively contributes to reducing its carbon footprint. Through our digital transformation efforts, we have modernized our infrastructure and adopted energy-efficient technologies, significantly reducing power consumption. Upgrading aging equipment and embracing newer technologies aligns with our goals of environmental sustainability and governance. We strive to fulfill our promises to the community and actively participate in creating a greener future.

The Future of Storage and AI

As the landscape of technology continues to evolve, the integration of artificial intelligence (AI) with storage presents exciting possibilities. AI-powered applications, such as large language models, demand advanced storage solutions to meet their requirements. It is crucial for organizations like BDO to anticipate these developments and leverage storage technologies that can support the evolving AI landscape.

BDO Unibank's digital transformation journey has been a testament to our commitment to excellence and innovation. With a focus on providing exceptional customer experience and addressing the challenges of financial inclusion, BDO continues to evolve and embrace emerging technologies. As we navigate the future, BDO Unibank remains dedicated to shaping the landscape of digital banking in the Philippines, empowering individuals and contributing to the nation's progress.

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