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

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, 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.

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.”