Ping An Bank ensures business growth through digital transformation and AI integration

Ping An Bank has shown strong online operational capabilities and high customer satisfaction amid a complex and volatile market environment impacted by the COVID-19 pandemic. The bank’s performance in the first half of 2020 benefitted from the mobile banking and fintech enhancements introduced in the past few years.

Zhang Bin, chief information officer at Ping An Bank traced the bank’s digital transformation journey from building basic capabilities, modernising its IT infrastructure, to implementing an agile technology architecture that leverages artificial intelligence (AI) capabilities.

The bank’s digital capabilities ensure stable banking operations during COVID-19 pandemic

The digital upgrades that the bank has made mitigate the adverse effects of the COVID-19 pandemic. Zhang cited Ping An Bank’s achievements in online operations during the health crisis. For example, the “Ping An Salary” platform was added to the Ping An Digital Pocket APP (previously Pocket Finance APP) to provide various financial and employee management services to small and medium-sized enterprises. The bank made the Ping An Pocket Bank APP’s “Doing at Home” and “Seeing the World” portals accessible to retail customers to purchase financial products on their smart phones. Customer relationship managers are able to function and operate in real-time through the Pocket Banker app. Clients were able to open corporate accounts via online banking.

Ping An Bank started its digital transformation in 2017 by moving its businesses online, and embraced mobile banking and artificial intelligence (AI). It laid a solid foundation for the bank to respond to the adverse impacts of COVID-19. At the start of the outbreak, the technology team executed immediate contingency plans, which include prompt deployment of remote desktops and virtual private network (VPN) to support the large-scale migration of business to operate online.

The bank said more than 30,000 employees worked remotely during COVID-19 through the use of tools such as cloud desktops and its mobile office app (Happy Ping An APP). The IT department released a total 424 online applications to support remote transaction and work from home arrangements. The bank has also strengthened security tools and internal audits to ensure secure and stable business operations.

The bank applies artificial intelligence in product and service innovations

Ping An Bank has always put “Being Technology-driven” at the top of its strategy. “Technology should be the foundation of the bank’s transformation and development,” Xie Yonglin, chairman of Ping An Bank said at its interim performance briefing in September. Ping An Group’s core technologies and resources in areas such as AI, biometrics, blockchain, and big data, enable the bank’s digital and intelligent product development, service innovation and effective operational management.

Ping An Bank started the transformation of its retail business through technology in 2016. Today, it continues its digitalisation journey with the use of AI in various areas such as customer service, marketing, and risk management, and has also strengthened its data and AI middle office capabilities.

It serves and manages customer relationship through AI outbound calls and online tools. AI customer service registered a year on year increase of 88.5% in June. The average number of clients served by AI-enabled relationship managers per month has increased by 365.1% year-on year.

The AI assistants are used to improve the business capabilities of offline customer managers. AI robots have fully empowered credit card issuance, “Xinyidai” (new generation) account, and automobile loan placement. Nearly 90% of credit cards issued in the first half of the year were automatically approved and issued by AI.

The retail unified Safe intelligent anti-fraud system has prevented fraud attacks totalling RMB371 million ($56.35 million), an increase of 9.8% year-on-year. Big data and AI have been utilised in various business lines of Ping An Bank.

For this achievement, Ping An Bank also won the Best Cyber Security Implementation Award in the International Excellence in Retail Financial Services programme, presented by Asian Banker early this year.

Quoting author of Bank 4.0, Brett King, Zhang said, “The future of banking is digital to be able to provide tailored-fit service based on customer portrait and behavioural predictions. The products are essential, but customer experience is more important”. He asserted that the future of banks lies in being “ubiquitous”, and banking services have to be made available and accessible “on demand”.

Zhang, who is also an engineer, is very optimistic about the prospects of AI. He believes that the future of banks goes hand in hand with AI. It explores the relationship between customer behaviour and preferences, based on neutral networks and deep learning. It can make recommendations based on customer relations graphs. It analyses the relationship between customers and enterprises, carry out risk pricing and risk control. AI makes the operation and management of banks more efficient, and it can change traditional structure of organisations.

“We must also see that the AI technology is still in its early stages and there’s a potential and space for further implementation. The future has come,” Zhang said.

Ping An Bank will continue to expand its footprint in the AI field and will embrace the next tipping point of artificial intelligence.

The bank’s digital development brings business expansion and cost savings

The year 2020 is the first year of Ping An Bank’s new three-year strategic planning. The bank has set the development goal of comprehensive digital transformation.

Zhang pointed out that the success of digital transformation lies in the construction of strong basic capabilities, including the modernisation of IT infrastructure, the agility of technology architecture systems, improvement of data governance and AI middle desk capabilities. Zhang vividly compared the way of digitisation to water conservancy projects. He said the infrastructure is fully open, cloud-enabled and containerised through the use of microservices and application programme interfaces (APIs).

The Ping An applications on the cloud exceeded 40%, as of the end of June. The technical architecture will be fully migrated to the distributed microservice architecture. The distributed financial platform as a service (PaaS) architecture has applied a microservice development framework in more than 200 projects, according to its first half report.

Zhang said with the launch of the new core credit card system based on the distributed architecture, the future transaction system will have higher scalability, flexibility, security and stability. It will save the bank around RMB 1.5 billion ($226.95 million) in five years.

The Ping An Bank’s technology team is responsible for data governance and AI middle office capacity development. It started the data governance in 2018, from then on, it improved its data lifecycle governance capabilities through measures such as building a data asset management platform and unifying data indicator standards.

The bank completed the formulation of more than 600 basic data and nearly 500 indicator standards, in the first half of 2020. Zhang emphasised that the comprehensive utilisation and mining of data that meet stringent security and compliance requirements is the driving force for creating business value.

Ping An Bank has built a data asset management platform, supported by model management tools, and empowered business analysts and engineers, to conduct efficient data process and analysis. By integrating business intelligence and AI capabilities, Ping An Bank has evolved from the traditional model of batching reports based on historical data, to real-time analysis, decision-making and recommendation of customer behaviour, to drive business development.

In the past three years, Ping An Bank has undoubtedly been successful in digital transformation and intelligent development. With the maturity and implementation of 5G, blockchain, and the Internet of Things (IoT), and e-commerce, internet usage has been rising in various industrial verticals, especially with the progress in the development of smart governments and cities.

The role that banks should play in the new digital-enabled era is on top of the minds of Zhang and his whole IT team. Ping An Bank’s new three-year technology development blueprint is about to start, and it will be instructive for the industry to keep track of what it does and how it will perform in what it described as the second stage of the digital economy