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KOHO Uses AWS to Bring Canadians Lower Personal Finance Costs and Access to Same-Day Pay

2022

Toronto-based fintech company KOHO Financial (KOHO) is democratizing access to personal finance solutions by offering Canadians accessible and affordable spending and savings products. KOHO’s core business applications were born on Amazon Web Services (AWS), but the company historically ran its data warehouse and machine learning applications on a third-party cloud. This created operational complexities for KOHO’s engineers and business users, often delaying teams by 1–24 hours. To keep innovating on behalf of its customers, KOHO needed a more efficient and cost-effective data warehouse solution—one that could provide a secure, efficient, and scalable foundation for its future customer offerings.

The company saw the benefits of migrating its data warehouse to AWS to achieve near-real-time data analytics, simplify data management processes, reduce costs, and gain access to AWS services that it could not use with its former data warehousing solution. KOHO also wanted to build a solution that would offer its customers the option of same-day pay, reducing their reliance on costly alternatives such as payday loans and credit card debt. The company realized this goal by using AWS services to develop Instant Pay, a free payroll benefit that gives working Canadians on-demand access to their earnings ahead of their paychecks.

Coworking team
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Using AWS, we can spend the vast majority of our time helping our users and advancing the business instead of on scaling the infrastructure.”

Jonathan Klein
Chief Technology Officer, KOHO

Using Amazon Aurora to Achieve Instant Pay

Founded in 2014, Toronto-based KOHO offers a variety of financial services designed to make personal finance easier for Canadians. As of 2022, more than 500,000 customers have signed up for KOHO’s free Visa debit card, high interest spending and savings accounts, and credit-building products. “Ultimately, part of what we’re trying to do is to give customers better products with lower fees that let them keep more of their money,” says Jonathan Klein, chief technology officer of KOHO. “When two-thirds of Canadians live paycheck to paycheck, there’s no reason why people should have to wait 2 weeks to get paid for work they did today. Using AWS, we are able to offer same-day pay for free.” 

To establish a secure, scalable, and efficient foundation for its data architecture, KOHO decided to migrate from its legacy data warehousing solution to Amazon Redshift, a service that provides fast, easy, and secure cloud data warehousing at scale. By using Amazon Redshift, KOHO unlocked benefits such as faster data analytics, improved security, and lower costs. “Migrating to AWS has definitely reduced complexity and improved security because we’re no longer moving customer data over the wire to another cloud provider,” says Klein. “The data starts on AWS, gets transformed on AWS, and stays on AWS.” KOHO also decided to build Instant Pay using AWS services—in particular, Amazon Aurora, a MySQL- and PostgreSQL-compatible relational database built for the cloud. “Aurora is our data store of choice for our dedicated Instant Pay database,” says Klein. “It is a fantastic piece of technology for performance and maintainability.”

Preventing Fraud Using Amazon Fraud Detector

KOHO began building Instant Pay first, kicking off development in April 2021 and finishing in just 3 months. In addition to Aurora, the solution uses Amazon Elastic Container Service (Amazon ECS), a fully managed container orchestration service that makes it simple to deploy, manage, and scale containerized applications. Using AWS, KOHO can offer a pricing model that lets its customers receive same-day access to their earned pay for free through their employers. By the end of 2021, as many as 1,100 users had signed up for Instant Pay, surpassing expectations. Users average six advances per month. The service is now available to over 70,000 users from KOHO’s partner corporations.

In early December 2021, KOHO started the process of migrating its data warehouse. The process began with a discovery phase that involved mapping KOHO’s existing data architecture and creating a plan for its new architecture on AWS. An important goal was to build a simpler, more flexible, future-proofed data architecture so that KOHO could comply with the strict regulatory compliance environment in which Canadian financial institutions operate. Using services such as AWS Lake Formation, a service that makes it simple to set up a secure data lake in days, KOHO has been able to implement more precise governance and access control than it could previously, improving security for its customers. The company also anticipates significant cost savings once the data migration is complete. “Having all the AWS tools at our disposal as well as the support we received from AWS made this migration an obvious choice for us,” says Klein.

KOHO has always maintained robust solutions to combat potential fraud, but it opted to enhance its fraud prevention capabilities using Amazon Fraud Detector, a fully managed service that customers can use to identify potentially fraudulent activities and catch online fraud faster. Using Amazon Fraud Detector alongside near-real-time data analytics on AWS, KOHO avoids data delays, so potential fraudsters no longer have a window of time in which to act.

KOHO also uses other AWS services, including Amazon Elastic Kubernetes Service (Amazon EKS), a managed container service that can be used to run and scale Kubernetes applications in the cloud or on premises. “Kubernetes is often used in the industry for container management, and we like the flexibility of having managed Kubernetes on AWS,” says Klein. And to empower its customers to search their KOHO card transactions, KOHO uses Amazon OpenSearch Service (successor to Amazon Elasticsearch Service), which makes it simple to perform interactive log analytics, real-time application monitoring, website searches, and more. Though KOHO has a small technology team, using managed services on AWS saves time and labor so that the team has more time to innovate.

Planning to Grow and Scale Using AWS

KOHO is well on its way to successfully completing its data warehouse migration and realizing the benefits of reduced costs and complexity. Next up, KOHO plans to overhaul how transactions on its application are stored and surfaced to the user. To achieve this, the company is planning to use Amazon DynamoDB, a fully managed, serverless, key-value NoSQL database designed to run high-performance applications at virtually any scale. “Using AWS, we can spend the vast majority of our time helping our users and advancing the business instead of on scaling the infrastructure,” says Klein. “We have a tremendous amount of extra time to focus on what’s coming next.”


About Koho Financial

KOHO is a fintech company founded in 2014. Based in Toronto, KOHO offers a variety of consumer financial services designed to help make life easier for Canadians.

Benefits of AWS

  • Simplified data warehouse management
  • Reduced data delays of 1–24 hours to achieve near-real-time data analytics
  • Reduces costs
  • Improves security and reduces fraud
  • Built Instant Pay in 3 months
  • Delivered Instant Pay to 1,100 users

AWS Services Used

Amazon Redshift

Amazon Redshift uses SQL to analyze structured and semi-structured data across data warehouses, operational databases, and data lakes, using AWS-designed hardware and machine learning to deliver the best price performance at any scale.

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Amazon Aurora

Amazon Aurora is a MySQL and PostgreSQL-compatible relational database built for the cloud that combines the performance and availability of traditional enterprise databases with the simplicity and cost-effectiveness of open source databases.

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Amazon Fraud Detector

Amazon Fraud Detector is a fully managed service enabling customers to identify potentially fraudulent activities and catch more online fraud faster.

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Amazon Elastic Kubernetes Service (Amazon EKS)

Amazon Elastic Kubernetes Service (Amazon EKS) is a managed container service to run and scale Kubernetes applications in the cloud or on-premises.Deploy applications with Amazon EKS in the cloud Deploy applications with Amazon EKS Anywhere Deploy applications with your own tools.

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