UnionBank Eliminates Tape Storage, Saves 35% with AWS
The Philippines is a rising star in Asia, with an economy growing 6 percent each year. Yet, in a country with 105 million people, some 77 percent of the population do not have a bank account. Union Bank of the Philippines (UnionBank) aims to improve what it calls “prosperity inclusion,” by attracting a total of 50 million customers by the year 2020. Key to this objective is its digital transformation.
“We are digitizing for a purpose,” says Dennis Omila, CIO at UnionBank. “We believe technology is what drives costs down for opening an account and allows us to reach the untapped 77 percent of the market.” UnionBank recently embarked on a digital transformation journey to disrupt its own operations, launching its own technology company, UBX, and changing the way it interacts with customers.
“AWS takes the time to really listen to where we want to be and understands how they can help us get there.”
Dennis Omila, CIO, Union Bank of the Philippines
About Union Bank of the Philippines
AWS Services Used
About Union Bank of the Philippines
Union Bank of the Philippines is a digitally progressive bank with a goal to have 50 million new customers by 2020. It owns a technology company called UBX and aims to add value and improve the customer experience by digitizing interactions.
- Reduces backup time from 8 to 2 hours
- Saves 75% of data retrieval time
- Offers annual cost savings of $380,500 for storage
- Facilitates new, more strategic work roles for IT team
- Ensures security of customer banking data
AWS Services Used
Pioneering Cloud Storage
Omila is a cloud computing evangelist, having seen the cost reductions and possible productivity gains in a previous company. He identified the elimination of tape storage as UnionBank’s first step in cloud migration. Tape is costly to purchase and maintain, and it is less reliable than cloud storage due to potential corruption from mold or outdated equipment. His infrastructure team referred to Gartner’s Magic Quadrant when selecting Amazon Web Services (AWS) as its cloud provider. The bank conducted a TCO assessment comparing annual data storage costs among the top public clouds, and Amazon Simple Storage Service (Amazon S3) proved the best value. Estimates for migrating 15 terabytes (TB) of data were 2.6 million pesos (US$49,500) with the cloud versus 7.5 million pesos (US$142,700) using tape on premises.
The team also identified storage as a strategic starting point in gaining approval from the Bangko Sentral ng Pilipinas (BSP), the governing body that must approve all digital initiatives in banking. Tape is the default backup method in the country, and UnionBank would be the first to convert to cloud storage. If they could prove banking data was secure in the cloud, Omila reasoned, “it would break the doors wide open for the rest of our cloud initiatives.”
Data Privacy as Priority
UnionBank began having regular meetings with BSP regulators, sharing its vision for digitization projects and how these would benefit the economy. Approvals for each project varies depending on the complexity, but Omila believes regulators are much more progressive now in their acceptance of new technologies such as blockchain and robotic process automation (RPA). They are also more likely to approve projects when they understand the macro-economic implications.
Data privacy is the top criterion for BSP approval. UnionBank encrypts data in transit and at rest and controls the encryption keys in-house. It also provided documentation about how data is stored in Amazon S3 using the advanced encryption standard AES-256. “AWS helped us with documentation to ensure we got BSP approval and gave us a dedicated architect to help us understand security in the cloud,” says Omila.
20 Million Pesos and Counting
To date, UnionBank had migrated 50 TB of Tier 2 data from tape to Amazon S3 buckets, and it plans to start migrating another 50 TB of Tier 1 workloads in 2019. The team estimates the bank is saving 20 million pesos (US$380,500) annually, a figure that would double when it completely migrates its Tier 1 workloads. This excludes the savings in electricity cooling the backup tape or the reduction in staff hours required to monitor, change, and store the tapes.
Before, backing up and archiving data consumed eight hours with tape; now it takes just two. By using Amazon S3 Glacier for archiving, UnionBank estimates that data retrieval is similarly simplified, with an estimated 75 percent time savings in the cloud. Using tape, the retrieval of long-term data (i.e., more than five years old) was extremely complex. Omila recalls one instance where they had to commission and pay an outside party to manage the process, which took a full day. “With Amazon S3 and Amazon S3 Glacier, it’s just a simple click, download, and retrieve,” he notes.
More Strategic Roles
One of the greatest benefits of cloud migration is the transformation of job roles for the operations team. These workers now play a more strategic role in the business, using time previously spent monitoring tape backups to plan future projects.
“The goal is to reallocate these team members to more key roles,” Omila says. “We’re giving them opportunities to expand their careers and retool their skills sets instead of doing the same routine work. For example, several of our operators are now transitioning to become Level 2 support technicians instead of Level 1.” The team is excited about the potential for new projects and thankful they can focus on more important work, he adds. They have also been able to accommodate more projects than before.
Storage That Scales
Another benefit of cloud migration is the scalability offered for future growth. Omila was certain the bank would have struggled to hit the 50-million-customer mark using tape storage, owing to the huge influx of data expected. “We no longer need to order and wait for resources, and storage is always available to us,” he says. “No more buying in bulk and worrying about inventory costs or unutilized resources. We do everything on a pay-per-use basis.”
Tape migration has opened up more cloud initiatives at the bank, such as a data lake with AI capabilities, pending approval from BSP. “We can now say we’ve proved the security of data in the AWS Cloud, which lends itself to a lot of possibilities,” says Omila. “We can go into AWS Marketplace and get any platform as a service now that our data is already in Amazon S3.”
Omila and his team appreciate the efforts of their AWS account team to enable the bank’s digital transformation, including recommendations on further cost savings. “AWS takes the time to really listen to where we want to be and understands how they can help us get there,” he says. “Our experience has shown that AWS is on a different level, and we actually use them as a benchmark for other vendors. We always say, ‘If AWS can do it, why can’t you?’”