How digital transformation in banking empowered a community in Mexico

Due to the pandemic, Caja Morelia Valladolid bank was in need of help. By investing in infrastructure, they secured their future and empowered the community.

by Vianessa Castaños, contributor, and Sara Alvarez Kleinsmith, thought leadership, Dell Technologies

Caja Morelia Valladolid is a power player among Mexico’s financial institutions and ranks as the second-largest membership Savings and Credit Cooperative in the country. But not even an established bank could withstand the impacts of the pandemic. 2020 left communities reeling and local business owners in desperate need of emergency credit in order to stay afloat, and there was no time to waste.

Due to the pandemic’s challenges and uncertainties, like branch closings and employees needing to work from home, Caja Morelia’s leadership was all the more hesitant to invest in their data center infrastructure. But they quickly realized that by investing in infrastructure, they were securing their future as more customers embraced digital banking.

“This kind of overhaul has never happened before. The collaboration between the customer, Dell Technologies, our management and our engineers from JAR was unique because we all had to work closely to define the specific modernization goals and completely realign the infrastructure,” states Victor Huerta Sorroza, senior inside sales manager at JAR Electrónica Aplicada.

The Breakthrough study by Dell Technologies highlights the need for digital transformation and the barriers to getting there. In the study, 53% of respondents polled worry their business will be shutout of the evolving digital world due to a lack of people with the right authority and vision. Recognizing that the crisis was negatively impacting both their customers and their sales, Caja Morelia decided that the time had come to adopt a new technology that would make their credit approval process more efficient.

Modernization is all about the timing

In order for the bank’s data centers to modernize to suit its clients’ needs, a new blueprint for technology was needed. Expansion into the world of multi-cloud technology promised a more efficient digital banking experience, but this was not without barriers. Because the bank had to continue to function as a 24/7 operation, any potential disruption to their services could result in massive losses. This meant that the bank could not close its doors during operating hours to facilitate the transition to the new infrastructure.

In fact, they could only limit access to the facilities to two hours each weekend, during which the call center modernization changes could be implemented. For perspective, when this type of infrastructure is typically put in place, it requires a full six-to-eight-hour day of labor. The added stress of the pandemic further limited access to the facility to just two weekends, which greatly impacted the installation. In order to meet the deadline, it was determined that the equipment had to be prepared at the headquarters and later shipped to the installation site.

The challenges of going digital

Getting the timing right wasn’t the only logistical challenge engineers faced, they also had to overcome distance. The JAR headquarters are in Monterrey, in the northern part of Mexico, a full 830 kilometers from Morelia in the center of the country. Standard installation and deployment typically involve putting the unit directly on a rack, then connecting and configuring it. But in this case, they needed to work back to front: units had to be connected and configured prior to making the move to their new home, which made this installation process different from what they’ve done for other customers. Fortunately, the team was able to create the first configurations in the Monterrey headquarters. And because they could only work in short increments on the weekends, the engineers from would move only select units at a time, which allowed them to continue configuring them as needed.

With new infrastructure comes renewed confidence 

Photo by on Unsplash

Caja Morelia Valladolid now has a modernized data center that features hyperconverged infrastructure. Running on data protection storage and backup in a hybrid cloud environment, customers and bank employees experience greater efficiency, security and speed. This has allowed for quicker deployment of community-oriented programs that foster financial health and freedom, including mobile banking, stronger fraud protection and easier onboarding to digital credit service. To date, 75,000 of their members have taken full advantage of these programs, representing more than 10% of total membership.

Success can also be measured in employee success. With Dell’s advisement and JAR implementation, the bank was able to encourage team members to modernize their way of doing business to better serve the community. According to The Breakthrough study, 44% of employees want their leaders to empower them to choose their preferred working pattern and provide the necessary tools and infrastructure to succeed. With the increased network availability, Caja Morelia employees find that they are now able to work from home without having to worry about connectivity issues.

This allows them to attend to more customers and execute more operations independently of engineers in different time zones, reducing support tickets from the help desk. That last detail is key: due to the city of Morelia being located in the central part of the state, in the past it would require engineers nearly three hours to travel there in order to resolve any major issues. But now with automation and online access, issues can be fixed in a fraction of the time. This makes Caja Morelia the only company in the region able to offer 24-hour turnaround times on credit approvals.

“When [Caja Morelia] would give out credit to small business, medium segment, they needed to first recap all financial information, and this caused many delays to the approval process. Since the modernization, they’re able to give credit to customers in 24 hours. In past years, they needed one-week probation for resolution of the credit,” adds Victor.

Impressively, per year sales have increased 25%, which was no small feat in the downturn of a pandemic. The transition to new infrastructure has made it easier for Caja Morelia to extend credit to its customers, proving that digital modernization is not only good for business but is vital to restoring the confidence of a community.