Microsoft Japan and FIXER are Disrupting Old Banking System in Japan with the Cloud

Jun 18, 2018

Cloud Transformation is allowing previously struggling Regional banks in Japan to catch up

As technology evolves and advances at an exponential rate, companies need to constantly reinvent themselves in order to keep up in today's fast-paced society. Digital transformation has now become a hot topic in the enterprise world and synonym of a rapidly evolving digital era, which is underpinned by the proliferation of cloud-based technologies. Cloud computing is without any doubt, one of the key players in any digital transformation journey. In fact, we are in a transitional phase where cloud technology is growing exponentially and spending on traditional IT is declining. Regardless of the company size or industry focus, technical strength is necessary, and the wave of Cloud computing has become inevitable. As we analyzed in previous articles about the Global and European Cloud Market trends (you can take a look here and here), the cloud revolution is continuing to accelerate everywhere while traditional IT being more and more marginalized, and a minority share of the IT market.

The banking industry has especially changed radically, and digital transformation is now a strategic imperative for financial institutions. Formerly resistant, we have observed the trend of financial institutions growing more interested in cloud adoption. FIXER was established in 2009 and from there, we have been growing quickly and have been acknowledged as the Microsoft Partner of the Year -- by Microsoft Japan in 2013 and 2014, and by Microsoft US in 2017 -- for our strong operational expertise of the cloud platform Microsoft Azure. We are engaged by a handful of clients in different industries but after realizing the high demand for cloud in the financial industry, we are now focusing on providing local banks with cloud infrastructure, as well as managing the system and application design, construction, maintenance and operation.

Taking advantage of our expertise and proven track of record in cloud-based transformation, we plan to increase the cloud adoption in the banking section through introducing our cloud.config solution to 10 banks across Japan by 2020.

Revitalizing the Business of Hokkoku Bank

Hokkoku Bank is a local bank in Ishikawa prefecture, which was suffering from an old business system that was holding back their growth. To revitalize their business, we renovated and reconstructed their on-premise internet banking system on Azure, leading the service & system design, development, and operation.

This new solution is called "Cloud Banking" and is the first Microsoft Azure-based internet cloud banking service in Japan. The new system will allow Hokkoku bank to engage their customers more easily and efficiently and in the local financial market, will be an indispensable service strategy for securing competitive advantage. This new cloud-based internet banking will result in dramatic reductions in infrastructure costs and address the security concerns that are the most pressing issue when selecting infrastructure. It will also aid the bank in their efforts to reform their system UI and UX and allow for implementation of a strategic marketing based on big data, providing increased efficiency and expanded customer services.

This is the first time in Japan in which Microsoft Azure will be used to implement the migration of a regional bank's Internet banking service to the cloud. In order to overcome the bank's skepticism towards the security of the public cloud we demonstrated the power of Microsoft Azure and how this cloud service is indispensable for the further development of Hokkoku Bank. In this way, this new service marks the bank's first step towards its goal of continuously generating new value for their customers and becoming number one in the region.

The Lift & Shift Project with Kiyo Bank

Kiyo Bank is the main bank serving corporations in Wakayama prefecture, with a market share of over 60%. If you read our previous article on the Global Cloud Top Trends, we have already discussed that the cloud transformation journey is advancing at a rapid pace globally. Following this trend, the number of Japanese corporations who use cloud computing for their core systems and various services is also increasing.

From the perspective of future strategic expansion and security enhancements, Kiyo Bank was facing a high demand for fast and secure transition to cloud environments. This was the catalyst to form the partnership between Kiyo Bank and FIXER for a cloud transformation project called "Lift & Shift", in collaboration with Microsoft Japan. The project aims to improve the efficiency of the bank's business by reducing IT costs, enhancing the level of security and allowing them to focus only on expanding new software functionality to meet customers' demand. FIXER will use our expertise to oversee all system design, construction, maintenance, and operation tasks associated with this project.

The Lift & Shift Project is expected to be completed in 2019, with the dual goals of migrating (Lift) Kiyo Bank's existing on-premises assets to the cloud platform Microsoft Azure and enabling the progression (Shift) to next-generation FinTech services. We will also continue to provide maintenance and operations services post -migration through our flagship solution cloud.config, a 24/7 full managed service of Microsoft Azure.

The Path to Digital Transformation

Once we realize that a surprisingly amount of the financial systems in today's world are primarily built on technology from the 20th-century, it becomes clear that these financial organizations' need for a radical change is necessary -- if not mandatory. The cloud allows banks to make intuitive use of a combination of software products necessary for their banking operations.

FIXER is an expert in the cloud that can open the door for cutting-edge technology and allow companies to make use of new FinTech services. FIXER's projects will allow local banks in Japan to accumulate knowledge related to cloud development and operations and continue their transformation to a state of cloud-readiness. Our goal is to lead the digital transformation for our customers, empowering them to embrace innovation and improve how they provide financial services to their customers.

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