MUFG Union Bank is on track to move to a cloud core banking infrastructure system within two years, an initiative that will let the bank build and release new products more quickly, the company told Bank Innovation this week.
“It’s all about cloud, native cloud and the ability to move data quickly, safely, securely in a real time, in a fashion that helps drive that buying experience,” said Chris Higgins, chief information and operations officer at MUFG Union Bank. “The level of automation from an end–to–end perspective, from idea generation to working proof of concept to full blown implementation on a minimal viable product basis, is much faster.”
Union Bank is co-creating the core platform, its “Modern Banking Platform,” with banking technology provider FIS. MUFG Union Bank is the first global financial institution to use the platform. According to FIS, the cloud-based core infrastructure will allow banks to bring products to market faster, with personalization and regulatory compliance capabilities.
Higgins said the cloud transition will allow the bank to develop new products and bring them to market within three to six months, marking a significant improvement over the legacy infrastructure currently in place, in which it takes 18 to 24 months to build and release a product.
The transition to the cloud also allows the bank to recruit top talent, including senior engineers. Union Bank will be hiring 100 people in the Phoenix area to support this project, Higgins said.
The “secret sauce” of the new platform is its ability to be configured easily according to client needs.
“The new modern architecture allows us to highly configure versus code differentiation into our environment,” Higgins said, adding that the cloud platform allows the bank to seamlessly tend to customer needs, both online and offline.
Eric Byunn, partner and co-founder of growth equity firm Centana Growth Partners, recently told Bank Innovation that banks are only beginning to shift to cloud infrastructure.
“The vast majority of banks are not using the cloud for critical loads and are just now really thinking about making some of those transitions, he said. “In financial services, it is still a new and exciting trend, and sometimes in the technology community, we forget that the cloud hasn’t had much penetration yet.”
Andrew Beatty, senior vice president of next generation banking at FIS, said the core platform is API-enabled “by design,” which allows for digital onboarding, efficient customer service delivery and upgraded payments solutions. It will also generate cost efficiencies, he added.
The end result of the deployment, noted Higgins, is the ability to deliver on the client experience.
“It’s a more efficient platform,” he said. “It’s safe, it’s secure and we will be able to really focus on meeting and exceeding our clients’ needs and expectations.”
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