AmBank (M) Berhad and Perkeso (Social Security Organisation) were honoured with Red Hat APAC Innovation Awards 2020 for Malaysia at the Red Hat Forum Asia Pacific 2020 for their exceptional and innovative use of Red Hat solutions.
AmBank won the Cloud-Native Development category for its adoption of DevOps and agility in its development. The bank created an end-to-end application to digitally onboard local small and medium enterprises to maintain its competitive edge in the saturated digital banking space.
Using Red Hat OpenShift, the bank built a continuous integration and continuous delivery (CI/CD) pipeline for its applications. Since the new app automates some compliance processes such as credit, risk and company checks, it reduces the complexity of the onboarding process, minimises the number of visits to physical branches and helps prevent churn of SME customers.
According to Datuk Iswaraan Suppiah, Group COO, AmBank Group, prior to engaging with Red Hat, the bank was pretty much vendor dependent. They eventually decided it was time to build and develop their own applications as vendors were often not providing them with what they really needed. Red Hat was able to train their team to innovate new applications, especially in the bank’s offering to SMEs.
With around 1.1 million users of their internet banking platform, the bank has experienced significant growth from only 200 users just a few years ago. AmBank’s mobile app has over 700,000 users, which is why the bank has adopted a mobile-first strategy and plans to grow and transform AmBank in this area in the future.
In using open source, Datuk Iswaraan explained that this allowed them to tap into the various experienced skilled resources in the industry in Malaysia. Compared to vendor-focused developers, it was easier to get developers to work on open source, even if they were fresh graduates from universities as most of them are familiar with the technology.
As with any financial sector, there are always concerns about compliance. However, Datuk Iswaraan pointed out that regulators who were initially concerned about having banks use the cloud are now open to cloud technology as a lot of work has already gone in to convince them. Which is why he believes that banks will look at new solutions that are “cloudable” and will work more on a hybrid approach in the future.
Meanwhile, Perkeso won the Digital Transformation category for modernising its legacy remuneration systems, which consists of modules that are hard-wired with codes and integrated with isolated web services and batch processing scripts. Perkeso deployed Red Hat Enterprise Linux to run its servers and developed new applications that are modular and integrated with Red Hat Fuse. It also built business processes and workflows with Red Hat Process Automation Manager and deployed them on Red Hat JBoss Enterprise Application Platform and Red Hat JBoss Web Server.
By doing so, Perkeso reduced operational cost, extended the availability of its services and ensured that its services reached more stakeholders (i.e., employers and employees registered with Perkeso). About 400,000 employers can now perform transactions such as contribution submissions and payments via Perkeso’s new digital channels instead of having to visit a physical branch.
Edmund Cheong, Chief Strategy Officer, Perkeso highlighted the struggles the company had to go through prior to their transformation journey. Their vendor-source legacy infrastructure could not keep up with the demands of modern services. Not only were the legacy systems unable to support the developments, but Perkeso also had challenges finding the right skill set to manage them.
As companies were modernising to automation, they had to switch back to paper-based solutions to get work done. And it was not an easy thing to do, judging by the amount of data and accounts Perkeso manages in the country.
“We lost the competitive edge we had simply because we were too dependent on our legacy systems. The changes were too difficult due to the limitations faced. As our business evolved, our systems could not. We need to reengineer the business process”, said Edmund.
Open source helped solved the problem for them in transforming and modernising their applications. While Perkeso still has some challenges, they have already achieved about 50 to 60 digital services being offered and plan to increase this. This includes the ability to provide social security in real-time to those that really it, based on the information available to them.
Eric Quah, Red Hat Country Manager in Malaysia added that the success of both these companies only shows how the market demands in cloud strategy continue to increase. Open source is instrumental for the cloud and is used by the most successful organisations with 83% of IT leaders agreeing that it will allow them to take advantage of the cloud’s architectures.
While the COVID-19 pandemic may have had some impact in business in the country, Malaysia’s IT spending is still forecasted to reach US$ 11 billion by year-end with cloud services continuing to grow and over half of Malaysia’s GDP to be digitised by 2022.
For the Red Hat Innovation Awards, the Cloud-Native Development category showcases agile methodologies and organisations that have most successfully illustrated superior overall performance in creating, maintaining and deploying successful business applications. The Digital Transformation category recognises organisations that have successfully addressed IT challenges and delivered business value to effectively compete as a digital enterprise.