You’re ready for transformation, but your network may not be. In today’s ever-evolving digital landscape, banks need a holistic approach to network transformation that opens avenues for growth, innovation, and improved customer experiences. Itaú Unibanco, the largest banking institution in Brazil, in discussion with Nokia, shares how they enhance convenience, security, and overall satisfaction for their valued customers. Listen as our experts share insight into how enterprises should think about network transformation to drive improved application performance, economics and security.
You’re ready for transformation, but your network may not be. In today’s ever-evolving digital landscape, banks need a holistic approach to network transformation that opens avenues for growth, innovation, and improved customer experiences. Itaú Unibanco, the largest banking institution in Brazil, in discussion with Nokia, shares how they enhance convenience, security, and overall satisfaction for their valued customers.
Listen as our experts share insight into how enterprises should think about network transformation to drive improved application performance, economics and security.
Featured Experts
Augusto Nellessen, Partner and IT Superintendent, Itaú
Marcelo Entreconti, LATAM Head of Enterprise, Nokia
Sarah B. Nelson 00:03
Welcome to The Progress Report. I'm your host Sarah B. Nelson, Chief Design Officer for Kyndryl Vital. Our conversation today is going to be all about navigating next gen networks in the world of banking. We have experts from Brazil's Itaú, Unibanco, and Nokia to share some insights that will help you think about network transformation to drive improved application performance, customer experience, economics and security. So Augusto Nellessen is the Partner and IT Superintendent at Itaú. He's responsible for the centralized operations telecom data center and batch processing teams, serving the retail wholesale and international units of the bank. And Marcelo Entreconti is the LATAM, Head of Enterprise for Nokia. He helps large enterprise companies in industries like energy mining, transportation, ports, manufacturing, and logistics through their digital transformation journey.
Sarah B. Nelson 01:04
Welcome Augusto and Marcelo!
Marcelo Entreconti 01:06
Thank you.
Augusto Nellessen 01:07
It's a pleasure to be here. Thanks for having me here.
Sarah B. Nelson 01:11
So let's get started. The digital world is dynamic, as we know, it's constantly evolving. And our question today is how can businesses grow, innovate and deliver excellent customer and employee experiences in this environment? Today, we're going to talk about how a holistic approach to network transformation can open up new avenues to deliver value, Augusto, what's driving the next wave of digital transformation in Brazil?
Augusto Nellessen 01:38
You know, digital transformation is not just about technology. And for us, there is no turning back. It's no longer a choice, but a mindset. And we need to be customer-focused all the time. And the entire organization should be committed to this transformation. And we really believe that the bank has a very important social role in Brazil, connecting the people, our customers with the products and the experience that they want, in this sense, having an accessible bank that can improve their lives, it's what we really believe that is most important.
Sarah B. Nelson 02:27
You mentioned that the bank has cultural importance in Brazil. Can you talk a little bit more about that?
Augusto Nellessen 02:34
Yeah, actually, the right term is social importance. You know, we really have a social hold in Brazil, because we represent 40% of all financial markets in Brazil. When we have some difficult problems, or even when we have innovation in Brazil, we change all scenario.
Sarah B. Nelson 03:00
So I'm curious, then how are Itaú and Nokia collaborating on the digital transformation?
Marcelo Entreconti 03:08
Digital Transformation is all about efficiency, resiliency and risk management. The 5G private networks, they enable the digital transformation. The private network provides the path to build the future of work, bringing in augmented reality, virtual reality, robotics and ultra fast response. We are also building new business models to address the Brazilian B2B marketing in synergy, of course, best to both companies. We create, develop, validate and expand the opportunities with our partners.
Augusto Nellessen 03:46
I think they can add some points here. We at Itaú firmly believe in mobile networks. We started this transformation this journey, I think, almost 60 years ago. And we strongly believe that organized frameworks like 3GPP, it's the future of the way that our customers can access more security products and even our employees can have some usability facilities in this network. One more thing that we believe that we can interconnect even more point of sales using these mobile networks. We also believe that in additional to traditional offerings of bank, because we are trying to be more than usual bank, we can offer in the future, something like 5G as a service. In this specific case, Nokia and Kyndryl are together with Itaú and we are prototyping these together as partners.
Sarah B. Nelson 04:57
So because Itaú is so intertwined into the social fabric, there's a lots of opportunities for kind of deepening that connection. And one of those is through 5G, bringing that as a as an offering of the bank. Is that correct?
Augusto Nellessen 05:14
That is correct, but it's not just about 5G, it's more about the mobile networks, the private networks itself, because some of the case that we are looking at, we will start with 4G, but we also have some studies concerning 5G, but you are right, we are working for adding a product like 5G as a service that could be delivered for the banking customer, the B2B customers.
Sarah B. Nelson 05:48
So what would that look like? How would a customer interact with that?
Augusto Nellessen 05:53
So we are looking at something like a portal that the customers can order for antenna and you'll have 5G network on your company or in your industry. This is what will look like the first version of the product. And when we evolve the solution, the product itself, we are looking for having some APIs - specific APIs - open APIs to do specific jobs.
Sarah B. Nelson 06:24
It's an interesting picture. So it's really empowering, that access to these next gen networks. I'm curious Marcelo, about the difference between public and private networks and how that works in these applications you're discussing?
Marcelo Entreconti 06:41
There is some confusion in the market regarding the difference between a private and a public network and between a private and a public service. Many customers ask to us I need a private network. So, our next question is, 'why do you need a private network?' 'Now, because I have a critical operation in a in a remote place and the coverage there is very poor and my my employees, they can't communicate well between each other and I need a private network.' This is not a private usage a private service, because this is an extension of a public service with a very good coverage with a very good service. A private network or a private service is a service where the data remains inside the location that the connectivity is provided. There is a lot of reasons to do that, because the customer may like to keep the control of of the of their own data to not expose to the cloud or to third party the critical communication between the devices or the critical process. Complementing what Augusto said, the 5G provides connectivity, a private network provides connectivity and the connectivity is the first step to deploy the use cases. What the industry is looking for are the implementation of use cases. What is a use case? A use case is to have two devices interconnected between each other interchanging data and making some action this interconnection should be 100% reliable, and at the same time should be ultra fast, because otherwise, the control of the system will not work. This is why a private network will be needed.
Augusto Nellessen 08:55
I think what is important to emphasize is that in at least in our point of view - in the bank's point of view - one will not replace the order both networks are complimentary, of course. So, we understand that the private network makes more sense even the level of security or even control however, we have to emphasize as well, that we are trying to have some of the facilities, some of the benefits of private network on the open network using new features of 5G, like open gateway itself, because we are trying to move some benefits from the closed networks the private networks to the open world because when we are mentioned you know the open 5G networks, we are looking for 77 million of customers not just the operational gains that we can have from inside of the bank.
Sarah B. Nelson 09:58
What are some of the gains that you have seen for your employees in terms of enhanced productivity and efficiency for those employees in the branches?
Augusto Nellessen 10:06
Last year, we were the first bank in Brazil to run branch over 5G. And we are using 5G as the principal way of connecting these brains to the office, to the data center, or to the cloud itself. We have a full understanding of the benefits of running mobile networks. Because in Brazil, the telecommunication scenario, we have almost 90% of our network running over cables on the air. So when we have raining, wind, some weather problems, we have a lot of outages in Brazil. One hundred percent of our buildings, we are running just with Wi Fi, we have no cables in Itaú anymore. Actually, we have a strategy that we call cut off the cables, because we strongly believe that users should be mobile and free. Today, we have 100% of our employees using notebooks. And what we hear we have these because what comes from this is that today, we don't have a physical position on the office. And in the past that is something that we never could imagine this benefits from the mobility scenario. So today, we have even savings concerning real estate, because you can run with less than we have employees, because part of our employees are at home. And when we see when we notice that we really benefit our employees, we think 'why couldn't we do the same for our customers?' And we are transporting this the same facility that we have in our buildings to the airports, shopping centers, and things like that.
Sarah B. Nelson 12:09
It's got me thinking, I was in a Estonia, maybe - gosh -I'm gonna say two decades ago. No, it can't be that long, I don't know. But Skype was the dominant organization there. And one of the things they had extended to the airport, they had to help build the airport. And then they were also partly working with the country - they didn't have even the cables - to my understanding they had no network coverage. And so they had leapfrogged into this trying to make the country be all wireless. It just, it has put me in the mind of that just kind of blows my mind at the idea of the infrastructure and of the country and the impact you can have by introducing these new ways of thinking about and implementing next gen stuff. It's exciting, I think. Do people come into branches to do banking still, or what does it look like for customers?
Augusto Nellessen 13:00
Yes, for us, as we have a strategy that we call "phy-igital," because it's a mix from the physical and the digital, because we strongly believe that we have to keep some of our physical offering, like a branch like a small point of sales, because some parts of our customers love it. A lot of customers that just want to interact using our mobile app. So we have to consider both ways. But concerned about the physical strategy, we don't have 100% of people that have in a banking account, so we still have some challenges to face. And having a physical branch is something that definitely helps people help people to have an access to a bank account, a credit card, a loan, and all products that we are trying to offer to helping people to reach their dreams. Because in the end of the day, people have dream dream to have their own home, our own car, new phone, and this case the bank can help people.
Sarah B. Nelson 14:11
Do you see a correlation between the people who are unbanked and accessibility to mobile networks as well? Is there a crossover there?
Augusto Nellessen 14:23
For sure. But you know, in Brazil, we have almost 30 million more SIM cards than we have population, because everybody in Brazil has a mobile phone, but they have a problem concerning how should they pay to have bandwidth to have the packets - the data packets - because it's a lot, it's expensive. So in our banks, we have a guest Wi Fi to give access to people to download app, log into the app, and making all process available to join the bank.
Marcelo Entreconti 15:05
Actually Augusto, what you mentioned is not only in Brazil it is a world-wide trend. And this is probably why I mentioned at the beginning the difference between a private network or private service and the public one, because this is a public need the consumer has.
Sarah B. Nelson 15:25
In terms of progress, do you see other potentials for the short and medium term for next gen networks? It might be in the field of banking, but it could also be in other fields.
Marcelo Entreconti 15:36
What we see in the future is, a future where everything and everyone is connected. For that, you need to use powerful networks with low latency at the speed of light - secure and reliable. It is essential - when you try to connect not only people but things - it is essential to have a high-performance industrial edge cloud, and flexible data centers, technologies that can support the advanced industry for load zero applications. We are trying to address the challenges and the opportunities of the of the digital transformation by using our cloud networks and our methods to enable fast service innovation.
Sarah B. Nelson 15:54
Augusto, what are you seeing?
Augusto Nellessen 16:29
Specifically about the future, we really believe that projects like this are what we call Autobahn type projects, you know, Autobahn, it's a highway in Germany. And when the Autobahn was made in the 30s, when the Germans decide to build his autobahn, it's not just to drink beer faster from Berlin to Munich. But they did not really fully consider the impact that the Autobahn would have on the economy or even on the ecosystem. And nowadays they have an industry - a strong industry - of autos like Mercedes, Porche, and Volkswagen and others. And we understand that the mobile network project like this one that we are facing together, can have the same impact like autobahns did. So we really consider this project are very important project. And we know that we will face something new, since we finish and since we deliver this project to our employees, and even to our customers. We are very excited because we have at this moment 64 of our workloads already running on cloud. And we are leaving what we have the benefits of open APIs and the componentization of the the infrastructure itself. So like the new networks have this kind of benefits. Having this autobahn, we are 100% sure that we will face something that we can cannot imagine.
Sarah B. Nelson 18:22
I love that metaphor; it's really evocative of the opening of potential that we can't even see just yet. It was lovely to talk with both of you. Thank you so much for joining us.
Marcelo Entreconti 18:35
Thank you.
Augusto Nellessen 18:35
Thank you, Sarah. Thank you, Marcelo. Thank you for having me.
Sarah B. Nelson 18:40
Thank you. That's the end of the episode today. We'll be back in two weeks for another episode, so come join us. Make sure to subscribe