Shizuoka Financial Group’s digital strategy and Snowflake use cases

The Snowflake World Tour made a stop in Tokyo during September, and approximately 5,000 participants filled the halls of the ANA InterContinental in Akasaka. Some sessions were fully booked, and the line for entry extended through the basement. Kudos to the organizers for managing such a large crowd.

The following is our second event report from the two financial services-focused presentations. It details Shizuoka Financial Group’s digital transformation journey, focusing on their data analytics and utilization platform built around Snowflake’s cloud data platform. We delve into the challenges they faced, the solutions implemented, and the resulting benefits achieved across multiple business areas.

Background: A History of Transformation

Shizuoka Financial Group, a regional financial powerhouse headquartered in Japan, has a long history of adapting to change. After shifting to a holding company structure in October 2022, they embraced the motto “Expanding dreams and prosperity together with our region.” This commitment to their community and customers has been the driving force behind their nine successive medium-term management plans, each aiming to leverage technology for improved service and operational efficiency.

Navigating the Digital Age: Challenges and Opportunities

The rise of the digital age brought both challenges and opportunities for Shizuoka Financial Group. They identified key areas for improvement, including:

• Outdated Information Systems: Legacy systems, some over 40 years old, hampered agility and added significant maintenance costs.
• Data Silos: Information resided in disparate systems across the organization, making data-driven decision making difficult.
• Limited Analytical Capabilities: Existing infrastructure lacked the power and flexibility required for advanced analytics and real-time insights.
• Shifting Customer Expectations: Customers increasingly demanded seamless digital experiences and personalized services.

To address these challenges and capitalize on the potential of digital transformation, Shizuoka Financial Group embarked on a comprehensive digital strategy.

The Transformation: A Three-Pronged Approach

The strategy revolved around three key pillars.

1. Touchpoint Transformation

• Seamless Customer Journeys: Transitioning from siloed systems to integrated digital channels, offering customers a unified experience across touchpoints like ATMs, online banking, and mobile apps.
• Personalized Interactions: Leveraging data to understand individual customer needs and preferences, enabling tailored financial advice and product recommendations.

2. Advanced Marketing Capabilities

• Data-Driven Insights: Building a centralized data platform to capture and analyze customer behavior, market trends, and non-financial data for informed decision making.
• Targeted Campaigns: Developing personalized marketing campaigns based on real-time insights, improving efficiency and maximizing return on investment.

3. Agile and Efficient Operations

• Process Automation: Automating manual processes across various departments like HR and accounting, freeing up employees for higher-value tasks.
• Improved Data Governance: Implementing robust data governance policies to ensure data quality, security, and compliance with regulatory requirements.

Choosing the Right Foundation: Why Snowflake?

After careful consideration, Shizuoka Financial Group chose Snowflake as the core of their data analytics and utilization platform. Key factors driving this decision include:

• Performance and Scalability: Snowflake’s unique architecture, separating storage from compute, allows for independent scaling and consistently high performance even with massive data volumes.
• Rapid Innovation and Investment: Snowflake’s continuous investment in new features and capabilities, particularly in areas like AI and machine learning, ensured access to the latest technologies.
• Cost-Effectiveness: Snowflake’s consumption-based pricing model aligns costs with actual usage, leading to significant cost savings compared to traditional on-premises solutions.
• Security and Compliance: Snowflake’s robust security features, including data encryption, access control, and compliance certifications, meet the stringent requirements of the financial industry.

Building the Foundation: S-hare, the Data Platform

Leveraging Snowflake’s capabilities, Shizuoka Financial Group built “S-hare”, a centralized data platform designed for:

• Data Integration: Seamlessly connecting data from various sources, including core banking systems, CRM applications, and external datasets.
• Data Storage and Management: Storing structured, semi-structured, and unstructured data in a unified repository, providing a single source of truth for analytics.
• Data Transformation and Analysis: Preparing and transforming data for analysis, leveraging Snowflake’s built-in capabilities for data cleansing, aggregation, and enrichment.
• Data Visualization and Reporting: Creating interactive dashboards and reports for data exploration and sharing insights across the organization.

Realizing the Vision: Use Cases Across the Group

Snowflake’s implementation has led to tangible benefits across various business areas within Shizuoka Financial Group.

1. Sales Force Automation (SFA) Integration

• Challenge: Disparate legacy CRM systems hindered information sharing and collaboration among sales teams.
• Solution: Integrated the new S-CRM (Scrum) system with Snowflake via APIs, centralizing customer information and sales activities.

Benefits:

• Enabled real-time access to customer data for personalized interactions.
• Improved collaboration and knowledge sharing among sales teams.
• Reduced data redundancy and improved data quality.

2. Enhancing Customer Transaction History Search System

• Challenge: The existing transaction history system, operating on a separate platform, struggled to handle increasing query volumes and data growth.
• Solution: Migrated the system to Snowflake, leveraging micro-partitioning for improved performance and scalability.

Benefits:

• Reduced query response times from minutes to seconds.
• Eliminated the need for dedicated infrastructure and reduced operational costs.
• Improved customer service by providing faster access to transaction history.

3. Leveraging HR and Payroll Data

• Challenge: Extracting valuable insights from HR and payroll data for workforce planning and talent management was complex and time-consuming.
• Solution: Created a centralized repository for HR and payroll data in Snowflake, implementing role-based access control (RBAC) for secure data access.

Benefits:

• Enabled data-driven insights into workforce trends, employee performance, and compensation analysis.
• Improved data security and compliance with privacy regulations.
• Streamlined HR processes and reporting.

Future Outlook: Expanding the Horizon of Data-Driven Innovation

Shizuoka Financial Group’s journey with Snowflake is far from over. They plan to further leverage the platform’s capabilities by:

• Expanding Data Sharing: Securely sharing data with business partners and customers through Snowflake’s data sharing capabilities, fostering collaboration and innovation.
• Exploring AI and ML: Leveraging Snowflake’s native AI/ML capabilities to develop predictive models for risk assessment, fraud detection, and personalized recommendations.
• Embracing Data Clean Rooms: Collaborating with other financial institutions and businesses within a secure and privacy-compliant environment to extract insights from combined datasets.

Conclusion: A Data-Driven Future

By embracing a cloud-first strategy and choosing Snowflake as their data foundation, Shizuoka Financial Group has laid the groundwork for a future powered by data. They are well-positioned to:

• Enhance Customer Experiences: Deliver personalized and proactive financial services based on real-time insights.
• Drive Business Growth: Identify new market opportunities and optimize business operations for increased efficiency and profitability.
• Empower Employees: Provide employees with the tools and data they need to make informed decisions and drive innovation.

As they continue their digital transformation journey, Shizuoka Financial Group stands as a testament to how traditional businesses can leverage the power of data and cloud technology to thrive in the digital age.

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