Itaú Unibanco Accelerates Pix Instant Payment System Development Using AWS

Itaú Unibanco needed to meet Central Bank of Brazil (BCB) implementation deadlines to offer instant payment services, called Pix, to customers. Pix—created by BCB and authorized in more than 700 institutions—gives customers the ability to instantly transfer money and pay for goods and services. The bank looked to Amazon Web Services (AWS) to achieve the speed and scalability it needed to successfully launch its instant payment service, and today it has the largest Pix implementation in the country, processing up to 20.9 million transactions daily, the bank’s Pix service was developed entirely on AWS.

Announced in mid-2019 by the BCB, Pix regulation required financial institutions in Brazil to have the instant payment service operational in just 10 months. In addition to this deadline, BCB stipulated a series of requirements financial providers had to meet, including minimum service availability and security standards.

In addition to that deadline, Bacen established a series of requirements to begin operating the service, such as a guarantee that the execution time of each transaction would be extremely low, that the application would be available > 99.7% all days of the week, 24h a day, and a guarantee that it was fraud proof. “We talked about sending an instant payment in 1.5 seconds in 99% of cases,” remembers Rodrigo Dantas, Itaú Unibanco director, emphasizing the doubts surrounding the project and proposed deadlines.

At the time, Itaú Unibanco’s core banking infrastructure was based on a mainframe platform. “We considered developing the solution on our existing infrastructure,”says Rodrigo Dantas, Itaú Unibanco director, “but we knew scalability and cost would be significant challenges.”

The bank had already begun a digital transformation process, modernizing its platform and experimenting with new models. While the introduction of Pix was required by regulation, Itaú Unibanco also saw it as an opportunity to develop an architecture with increased resilience and security, higher performance, and low latency.

“We wanted to move to the cloud to take advantage of its elasticity and ease of use,” says Ricardo Machado, Itaú Unibanco’s systems superintendent. “This would help with launching Pix, but also give us a more agile infrastructure for the future.”

Rodrigo reinforces the decision, recalling that project maintenance in the bank’s environment would require scaling by peak processing. The bank also calculated that the investment required for the Pix project on existing infrastructure would be the same as 5 years of running on the cloud. IT engineering specialist Alexandre Cadima says, “We saw that the cloud would support our growth without the massive investment in equipment that we’d need to continue with our on-premises infrastructure.”

That was the foundation for the decision to develop the first Itaú critical mission solution project in cloud. “We decided to use the cloud as a facilitator to understand the deadlines proposed by Bacen. Dantas adds, “Once we decided that the cloud was the only way to go—giving us the speed, scale, cost-efficiency, and simplified management we required for both launching Pix and future growth—we started looking for a cloud provider.” Now we needed to define the provider..

After evaluating a number of cloud services, Itaú Unibanco chose AWS.. The AWS package was the best fit for our requirements,” says Dantas. “Specifically, we were looking for support to help the team—most of whom didn’t have experience using cloud technology—get up to speed with AWS.”

“The partnership with AWS was fundamental,” adds Machado. “The team learned quickly thanks to training and support from the AWS architects, using AWS is also a good way to attract new talent who want to work with the latest technologies.” The learning curve was accelerated and the partnership with AWS was fundamental. We placed people from the squad in training and had support from the AWS architects to answer our questions,” emphasizes Ricardo, recalling that working with AWS cloud was also a lure that attracted professionals.

"The AWS architects expertise helped Itaú Unibanco deliver on the changing requirements of the Pix project, including new BCB regulations. “We worked together as a team, coming up with solutions and testing ideas,” says Cadima. “And because the services were available on demand, we didn’t have to go through the long cycle of acquiring infrastructure and then only getting to testing further down the line. In a few clicks, our hypotheses were ready to work on.”

The version of architecture used arose from this process, with the main services that would support everything to be implemented. Cadima continues, “It’s significant to note that we fit the technology to the challenge—not the other way around. It was a fantastic experience, there were no limitations to the solutions.”

Itaú Unibanco built its architecture combining services such as AWS Fargate serverless compute for containers, AWS Lambda, which lets users run code without thinking about servers or clusters, In addition, it used Amazon Simple Notification Service (Amazon SNS)—a fully managed Pub/Sub service for A2A and A2P messaging—and Amazon Kinesis, which makes it easy to collect, process, and analyze real-time streaming data. This event-based architecture is now responsible for 20% of the financial volume transferred using Pix:  

Today, Itaú Unibanco’s architecture is responsible for 20 percent of total Pix volume in Brazil, as well as being the most popular payment method for the bank’s customers.With a daily average of 15 million transactions, it represents 97 percent of transactions carried out and more than 70 percent of transferred amounts. In addition, Pix transactions performed by third parties—including iti card, Magalu, and iFood—also run through the bank’s systems.

"We’re the only traditional bank in our market with a 100 percent cloud solution", says Dantas. All of the other banks have pieces that connect with mainframe or that are completely mainframe,” he emphasizes, remembering that new digital banks operate on the cloud, but do not have the same set of variations as the Itaú Pix. “Using AWS, we sped up our Pix service and that of third -parties, simultaneously implementing it across all channels.”

Using AWS, Itaú Unibanco easily achieved the 99.97 percent availability rate stipulated by the BCB, giving its Pix service the top “A” rating. With these percentages, the Itaú Pix has received a maximum rating, - A score - by the Central Bank since its launch.

The bank has also reduced costs by 75 percent using AWS CloudHSM to more effectively manage its hardware security modules, and benefited from on-demand instances and the elasticity of AWS.“ “We reached an 80 percent cost reduction in Pix payment transaction processing compared to other forms of payment,” says Dantas. And with Amazon DynamoDB, latency is less than 6 milliseconds.

Using AWS, Itaú Unibanco is confident that it will not only be able to respond quickly to any new BCB regulations, but it will also constantly improve its service and deliver new experiences to customers. “When we look at the applicability of Pix, we have a QR code creation process for payments,” reveals Rodrigo. The process foresees that, instead of swiping a card, the user can make a payment with Pix using a QR code that is generated.

“There’s great potential for Pix,” says Dantas. “We can see so many other applications for it—the sky’s the limit.”