KB Kookmin Bank is one of South Korea’s largest and best-known financial institutions. In recent years, Korean banks have faced increasing competition from new digital-first banks, fintech, and the tech sector moving into finance. A key selling point for these new challengers is a better digital experience. As a customer-centric bank, Kookmin wanted to maintain its leadership position by providing the best possible digital experience to customers.
Big data has increasingly enabled banks to offer better, more customized products and services. But to create new, personalized services, the bank needs access to customer data, including data held by other institutions. KB Kookmin Bank partnered with VMware Tanzu Labs to redesign the customer experience in the app, making it easier for customers to give the bank information needed to create new digital products and services.
A tech leader in banking
KB Kookmin Bank is part of the KB Financial Group, made up of over a dozen wholly owned businesses, ranging from banking to data systems to life insurance. KB Kookmin prides itself on being a customer-centric financial institution and a technology leader in a crowded market serving tech-savvy customers with high expectations.
At the same time, the Korean government has introduced a new data-sharing program, aimed at enabling financial providers to offer more customized solutions for customers. MyData is an initiative of the Korean Financial Services Commission. It’s a standardized application programming interface (API), which allows different applications from different financial organizations to interact, while also protecting personal data.
“With APIs, banks can offer a more comprehensive user experience for all their customers. They can also create more innovative solutions for customers to make banking easier and less of a chore,” says Ju-Ah Wi, Senior Manager, KB Kookmin Bank.
KB Kookmin makes data sharing easy for customers
MyData allows accredited financial services providers to access personal data from about 800 financial institutions across Korea’s financial sector. With that data, banks can better tailor their products to customers’ needs, and offer better transparency to customers. In theory, banks can now offer customers access to a more complete picture of their financial status from their favorite banking app even if the customer has accounts with other banks.
KB Kookmin wanted to be a market leader in using MyData to introduce a variety of solutions for customers. Without it, the bank would not only have very limited insights into customers’ finances but also risked losing ground to competitors.
So far, customers have been opting in; even before the new service was launched, an estimated 1.8 million KB Kookmin Bank customers consented to KB Kookmin Bank accessing their data. But KB wanted to make the consent process as easy as possible for its customers to further personalize banking and improve services.
“MyData is the backbone of many new banking services. Without access to the data, we won’t be able to create many of the exciting new innovations we have planned over the coming years. So, it’s crucial that we comply with the privacy protection requirements from the regulatory bodies, while making it as easy as possible for customers to give their consent,” says Ki Ho Byeon, Senior Managing Director of the MyData Department at KB Kookmin Bank.
Initially, an external vendor was hired to take on the whole project. But this decision was quickly reversed after the process proved to be more complex than expected. The bank’s in-house IT team was tasked with the project and recognized they would benefit from finding a partner to help them deliver this new software.
VMware Tanzu Labs as a trusted and results-oriented partner
To support its IT team of four, KB Kookmin Bank enlisted the help of VMware Tanzu Labs to design and build new innovative digital services leveraging MyData. Four Tanzu Labs specialists were paired with KB Kookmin Bank product managers, designers, and product software engineers. Working collaboratively, they were able to rapidly develop valuable software, iterating on a weekly basis using practices from agile development, lean product management, and user-centered design methodologies.
In tandem with impressive back-end developments, the Tanzu Labs team reinforced KB Kookmin Bank's internal software development competencies and promoted modern software practices by hosting 12 internal lunch and learn sessions called MyData Disrupt. The Tanzu Labs practitioners worked alongside the bank’s IT team while building the new software, which also helped hone their software development skills.
To optimize productivity, software quality and performance, the team applied the VMware Tanzu Labs approach which includes pair programming, test-driven development, and domain-driven design practices. The team conducted user research, produced prototypes, and tested different user interfaces to optimize the user experience.
Developing software with help from VMware Tanzu Labs was enormously helpful. The process was smooth, and we were able to come up with a solution that met our needs in a short time frame. We are very happy with our improved product too.”Hyunkyung Lee, Assistant Manager, KB Kookmin Bank
As a result of this partnership with Tanzu Labs, KB Kookmin Bank improved the user experience of the MyData app, which saw consent process time decrease by 18 percent, thereby significantly speeding up a very complicated and strictly regulated process. KB Kookmin Bank distinguished itself from its competitors by offering the first MyData consent form that pre-populates existing data.
With the process becoming more efficient, the bank can now minimize the drop-off rates from customers who exited the consent process before completion. And with better access to data, the bank is positioned to maintain its leadership position by providing an improved digital experience to customers. Furthermore, through the training and sessions, KB Kookmin Bank adopted a strong developer culture that helped move its MyData services to the next level.
“With access to customer data, we will be better able to customize our solutions and please our customers. In the foreseeable future, our goal is to transform beyond a traditional financial institution and become a platform company that provides an integrated financial service,” says Ki Ho.
Instilling agile culture through collaboration with VMware Tanzu Labs
Throughout the 10-week collaboration, Tanzu Labs was not only a consultant but also a partner to KB Kookmin Bank on its journey to re-write a strategic app and adopt cloud native architecture. KB Kookmin Bank believes that it is now equipped with the skills and software development culture needed to provide more customer-centric digital services.
"I was very excited to contribute to the KB Kookmin Bank digital transformation. KB and Tanzu Labs experts achieved a successful outcome together by not only driving the MyData product vision but by enabling the KB product team to put agile and app modernization practices to use in their day-to-day," says Terry Oh, Senior Product Manager, VMware Tanzu Labs.
KB Kookmin Bank expects to continue its collaboration with VMware. In the immediate future, the bank’s goal is to transform beyond a traditional financial institution to become a digital-first bank. Given that MyData services are likely to expand to various industries and fields, the bank aspires to expand its range of digital services in the e-commerce, automotive and healthcare space, leveraging VMware Tanzu Application Service as its cloud native application platform of choice.