PegaWorld 2025: Revolutionizing Banking with AI: MUFG Bank, Ltd.’s Digital Transformation

PegaWorld 2025: Revolutionizing Banking with AI – MUFG Bank Ltd.ʼs Digital Transformation

So shall we start my presentation? Thank you for joining us today. I'm FMP Rempei Iwata from the MFG Bank in Tokyo, Japan. Right. And today I will be presenting the our digital transformation, as well as the use of the artificial intelligence in our operation, where I introduced the our effort in this transformation with Pega.

The. I hope you find this presentation useful for you guys. Now The. Firstly, let me introduce the mfg in the United States. MFG is so many people are not familiar with the mfg. So I introduce our organization MFG is the largest the biggest financial group in Japan. We have the banking entity and trust bank, the securities and credit card company and the consumer finance.

Right. So maybe you. To to to easily remember the our bank name. So actually the mfg name of MFG stands for the Mitsubishi. Actually our original origin of our bank, one of our origin was the Bank of Mitsubishi. So maybe everybody knows Mitsubishi right. So it's quite easy to remember the our company name.

We also have the global network across the Asia, North America, Europe and other regions as well as Japan. We internationally offer the financial services for our clients quite a wide range of financial services we offer. The group has a total of 140,000 employees all over the world, and with the 30,000 working in Japan, here is our organization chart that I belong to, the Digital Strategy division that I'm head of the Digital Strategy Division.

I report to the Chief Digital Transformation Officer that our role is to drive the company wide digital transformation initiatives across the six business units and corporate center divisions. The. So let's show let me show that today's agenda. The first hour. The business environment around us. The next, I will share the significant change after shifting to the digital.

The following that I will present the three use cases and the case study of Pega and the four consumer for corporate client and for the global operations. The first business environment around us, the new Life cycle post Covid 19, have shifted and accelerated the interaction between the customer and the bank from the face to face to digital.

Additionally, the technology advancement has led to the widespread use of the digital device like a smartphone. Currently, the GenAI laboratory is preparing the change of the customer Service from the face to face with paper form to digital channels. Bring us to the chance, bring us the chance to make the end to end digitalization in not only the customer channel, but also in the back office.

Right? Let me show you the some impact of the shifting to the digital channel in account. Opening the. We develop the account opening app for consumers. Just five years ago, after the account opening app, 80% of the new accounts are now opened in this app. The. As a result, over the counter tasks dropped by 50% in the four years the app the you know the customer had to visit the our branch during the business hour Our just to open the bank account.

But now they can, they can complete the account opening anytime, anywhere through this app. It greatly enhances the our client convenience. So here is our banking mobile app. The function is totally similar to the other peers. The this app customer can do the various transactions, such as binding the mutual fund, as well as checking the balance and fund transfer.

Now the number of the user has increased roughly two times in five years, reaching the 10 million users today. So next I talk about the use case with Pega. The this use case is for the consumer finance, right. Us. This photo shows a bank branch just about ten years ago. The. You can see the various application forms were available close to the.

Counter at the rack, and the customer had to fill out the forms and mail them to our operating operation center. So this old fashioned customer channels was still alive just ten years ago. Right. So as a result, the operation in the back office had to be done using the paper, right? Additionally, due to the manual screening process, manual screening process for the consumer finance, it takes time to process it.

And customers had to wait for a long time to get some approval to get the money for of the consumer finance to solve these challenges, that we release the app like that right hand side. The it allows consumer digitally to apply for the loan and to complete the transaction. The behind the customer facing app.

We implemented the Pega Lead solution for backups operation. The. I will talk about the detail next. But here is a the workflow to deal with the consumer finance in our back office. The top section shows the previous paper based workflow, while the bottom section shows the workflow. After implementing the Pega the with Pega we can now manage the entire workflow from the receiving the information from our client to the approval contract and.

Execution digitally. Moreover, we have automated the screening process with artificial intelligence with machine learning model. The initial review is fully automated and the secondary review also automated in the identity verification and requiring the external data for the individual screening. The other result we have, we've been able to automate the majority of the 300,000 forms applications are here.

The next example the case study is for the corporate client Island. I talk about the the balance certificate for auditors, maybe. Are you familiar with the balance certificate for the auditors? That this certificate is issued by the bank to verify the accuracy of the balance of the asset and liability which held by the companies and organizations, that we have some challenges for operation of the certificate.

The first challenge is that. Auditors, the auditing firm Send sent us the paper request by the postal mail. Right. Just three years, four years ago. Right. The second the multiple organization multiple department corresponding to the bank account type. Like savings account and derivative account and trade finance account.

Something like that involves the issuing the certificate. Right? That is totally make the made the workflow so complicated. Right. The third the you know as you know it's quite easy. Imagine the request of the from the auditors every year spiked in after the end of the fiscal year. Right. And moreover, the paper based operation forced employees to to be present physically in our office to handle the this task.

The by implementing the Pega for this operation that we have achieved a significant efficiency improvement and uh, I will detail on the next page. But here is our concept. The concept is totally same as the consumer finance. But we haven't we haven't only digitized the customer facing part, like receiving the request and submitting the certificate to the auditor and our client, but also the we made the end to end digitalization.

And if efficiency improvement, including the back office. Right. The first we built the balance gateway that is the digital platform newly established by the four major accounting firm, the auditing firm in Japan, to digitally receive the request and digitally send the certificate to the firms. The no envelope right now.

The next, by implementing the Pega, we digitally centralize the operating flow workflow across multiple departments. Finally, we leverage the Pega RPA to automate the simple tasks within the workflow. Here is a detail of our workflow in the workflow. Right right hand. Left hand side. A stack of documents and papers were circulated across multiple departments.

Entire our bank. Right? We couldn't track the current status until all tasks were completed. Right. In the 2D workflow. Right hand side. The current workflow. The Pega technology made the workflow much simpler, as you see no circulation of papers, and it allows us to monitor the current status in real time.

As a result, we have automated the 80% of the 40,000 tasks requests a year, but we also reduce that duration, uh, duration of the issuing the certificate to the client and to the farm from the ten business days to three business days. We could improve our service level for the client. And also, as I mentioned, since the previous workflow totally was based on the paper, right?

So employee had to be physically present in our office. Now tasks can be done remotely. So we could enhance our resilience of this operation allowing working environment of the post Covid 19. The improvement in this workflow has significantly enhanced the enhanced both efficiency and flexibility. The next case study with Pega about the global operation.

I will talk about the cross-border workflow management at our bank. We offshore that. We offshore the operation like trade finance and deposit and foreign remittance that receive uh add the branch outside Japan to the operation center in India. However, the communication way with email and excel file has led to in efficiency and challenges in status management.

The starting with operation in Asia Pacific, we have optimized the operational workflow across the multiple department by Pega that we named the system Grow Global Operation Workflow. Right now, the roughly the 500 users use the Pega annually. We handle around the one 50,000 transaction and achieve to the improvement 50% of processing time.

We plan to expand the implementation of Pega to the Americas and EMEA to aim their further cost savings. So this slide details about the system architecture of grow the. By developing various application on top of the Pega Platform, we are building the cross-border workflows. Here is a sample screenshot of grow that this screen shows the workflow management for the international.

The foreign remittance that receive at the Hong Kong branch. Our operation center in India. The carry out the foreign remittance processing. At the same time, the Hong Kong branch people also can monitor the result and the status of the operation. By using the glow that we can efficiently manage the cross border processes.

The. Lastly that we have decided, we've decided to transition to the Pega Cloud in Japan, Asia and Oceania to accelerate our innovation. This transition will reduce the our maintenance burdens, the quickly integrate to the latest technology to increase our competitive advantage and lower the operation costs.

Today, I share the our digital transformation journey with Pega. The MFG keeps challenging in the era of the transformation and improve our service for our clients. That concludes my presentation. Thank you. Okay. Well, thank you very much. I think that was a great presentation. Um, my question is, on the account opening, you said about 50% of customers now open the account online.

I'm just curious, uh, is there a reason why the number has not gone up? Or does it have to do with customer friction in terms of how friendly it is for them to open the account? Or this has to do with, um, different countries not having the right, uh, customer data to be able to validate and approve online account opening.

Thank you. Okay. Are you asking me how to verify the customer online? The mobile app. Right. Yeah. Right, right, right. Uh, the Japanese government issues some kind of the ID, uh, which have the chips, so we can read these chips by using the iPhone and Android phone so we can retrieve this information from these chips.

Right. So we verify the Other verify the customer's face and the face in chip. So we verify the ID by using by using the our government ID chips. Right. So this is a very exciting journey that you've just articulated here. How are you able to get the Pega Platform initially approved by your control functions, meaning security and architecture and risk and so forth?

Because that's that's a big leap, right? And you needed to demonstrate that the data was secure or that the connections were secure. Thank you. Okay. The your question is about how to get the approval of the Pega Platform in our institute, right? So currently, our Platform, uh, is on premise. So the actually the seven years, ten years ago when we, uh, deployed, deployed the Pega Platform we also discuss with the cyber security department people so deeply discuss about that.

However, that, you know, the we decided to implement this in our data center. So there is so much how to say issued about that. However, you know, recently we decided to move to the Pega Cloud in the next year. Right. So you know, the by using a crowd, we have to move our information in the into the to the Pega Cloud.

Right. So we deeply discuss with the security people and the compliance people to bring the information. Weather information go to the outside, Japan or not, something like that. We discussed deeply discussed about that. And and then as a result, uh, we, uh, completely, uh, confirm that the the Cloud is Pega Cloud is so secure.

Right. That is the some kind of the story, uh, introducing the Pega Cloud. Yeah. That's it. Thanks for that. Uh, just curious, do you have a future vision for generative AI and AI agents, especially with what Pega announced today as well? Okay, I see the good question. Right. Right now we don't use AI in this workflow.

The Other Other Alan says the. We in the in the other use case that we started to use GenAI to create the some presentation for the big client and to answer to how to say do our bankers when do when our bankers are retrieved our internal procedure, the GenAI response, the answer the about the question about the our internal procedure.

The other Aaron said in the keynote the when we introduced the GenAI in the workflow, especially in the back office. Yeah, we we try to remove the uncertainty of the some kind of judgment of the GenAI LLM. Right. So we have to how to say we first how to say remove and mitigate the such a risk of the use of the GenAI in this field.

Right? I think so after, uh, the technology get much more mature, we will start to use JNI in the back office field. Right? Maybe the Blueprint and the new Pega technology, uh, will, uh, introduce such a new technology, which, uh, reduces the our concern. Right. Thank you. Okay. Thank you.