Sonae FS: Revolutionizing the financial sector through a cloud-native approach

“Sonae FS was born in the cloud, and still to this day we don’t have a single piece of software or wire onsite.”

Paulo Lima, Head of IT at Sonae FS, is talking about his company’s cloud-native approach to technology and how its helping revolutionize data management across the entire Sonae Group.

“Everything we do is in the cloud,” he says. “For us, technology has always been a key part of our culture and not just concentrated within our IT team. From day one we wanted to do things differently.”

With no existing cloud infrastructure within the Sonae Group, Sonae FS built their cloud-based systems with support from multiple business partners. That was until the company launched their Real-Time Approach project in 2018 – a digital transformation that would allow Sonae FS to develop its own solutions, take full control over its cloud systems, and better understand how customer data is managed.

Embracing technology from the start

Sonae is a multinational business group based in Portugal that brings together a diverse range of industries including retail, shopping centers, telecommunications and technology companies. The latest business unit to be added to the group in 2014 was Sonae Financial Services – an independent branch of Sonae setup to coordinate the financial, in-store credit and insurance services of the group’s customers.

“Our idea from the beginning was to create everything in the cloud, starting by building our first data warehouse in Azure,” explains Lima. “We needed to prove a cloud infrastructure would work before investing too heavily into it. This meant outsourcing most of our initial IT structure to business partners and running everything in a batch processing approach – making it hard to respond to data in real time.

“In a sense they were in control of our customer services,” he adds. “We wanted to take more control of these systems and build a better relationship with our customers through their data. If anything goes wrong with a transaction, we need to immediately spot the issue and communicate with the customer straight away – and that required us to develop our own systems in Azure.”

Finding a digital experience partner

With knowledge of Azure’s capabilities, Sonae FS needed to find a specialized partner with experience using Azure as a Platform-as-a-Service. After meeting with a number of Microsoft partners across Portugal, Sonae FS selected Xpand IT – an application modernization partner who offered their own unique methodology, Digital-Experience-as-a-Service (DXaaS), which perfectly matched Sonae FS’s own agile way of working.

“DXaaS is similar to a cloud consumption model in the sense that it allows clients like Sonae FS to use our multidisciplinary and multi-technology teams in an efficient and productive way,” says Sérgio Viana, Partner and Digital Xperience Lead at Xpand IT.

“On an Azure project like this, often the majority of our people work on real-time initiatives, with smaller groups working on complimentary projects such as mobile UX and bot interfaces. Today that might require a team of two people, tomorrow it might be ten. But with DXaaS, we can plan ahead and always have the flexibility to adjust our capacity at short notice – ensuring the full team is working hard without any downtime or unnecessary costs for Sonae FS.”

Xpand IT was able to demonstrate the value of their DXaaS methodology early on in their partnership with Sonae FS by collaborating on the Real-Time Approach project – a plan to better integrate transactional data and see everything a customer does in a real time.

“Our previous system was not able to receive live data from Mastercard Payment Transaction Services (MPTS), which meant any transactions made on a Friday would only appears on the customer’s account the following Monday,” says Lima.

“We needed a faster way to receive this data. So working with Xpand IT, we set up a platform on Azure to monitor and consolidate all MPTS information in real time and implemented logic to trigger actions related to different transaction events.”

This new architecture was based on Azure SQL PaaS DB and Azure App Services, creating a high availability and low latency setup that could process these real-time data streams at any scale.

“Now instead of manually integrating files into our data warehouse, our operations team can simply check a dashboard and react to any issues they’ve been alerted to,” he adds. “Everything just flows automatically, which is helping boost efficiency and transform how we operate day-to-day.”

The benefits of a cloud-native mindset

Using the Real-Time Approach project as a springboard, Sonae FS quickly continued developing its IT landscape with Xpand IT, implementing new projects in Azure that wouldn’t have been possible before. This included building a microservices architecture with hundreds of APIs running on Azure API manager, moving its digital home banking app to Azure connections to link with other service providers in Portugal, and even supporting the company’s call center operations in Azure.

“Most recently we implemented our new onboarding platform in 2020,” says Lima. “Customers can now input all their information directly into a tablet in-store, which is then uploaded into our Azure platform and cross-referenced with other background services and financial data.

“This provides an instant risk score to say if they are eligible for a credit card. If yes, the customer can digitally sign the agreement on the tablet and have the whole process over in less than 10 minutes – creating a paperless and completely streamlined digital process from end-to-end.”

Sonae FS’s continued success in the cloud is also having an impact on the wider Sonae Group, which has sparked Lima to lead a Cloud Governance Committee that specifically discusses the potential of Azure and helps other Sonae companies see the benefits of migrating to the cloud.

“Some companies often keep everything on-premise as there is a worry about data security and the lack of control in the cloud,” he says. “But on-premises systems will never be as efficient as a cloud provider like Microsoft. The speed you can add new functionalities and the level of security you have immediately out of the box – that’s the services and protections you can implement in a couple of clicks and what’s always impressed me about the cloud approach.”

Reshaping the future of financial services

For Sonae FS, future success is not just about having the right technology in place, but also the right culture to embrace new ways of working. A company-wide willingness to evolve that’s already helped the company innovate without the typical barriers or red tape, and a mindset that Xpand IT has found valuable when implementing these projects.

“It’s what makes Sonae FS a dream client for us, and it’s helped us build a level of trust to not only develop these applications but also quickly find solutions if an issue ever crops up,” says Viana. “If we think they can get more value by pushing the technology, Sonae FS trust us to speak up and know that we’ll work with Microsoft to ensure we get the best results.”

Sonae FS is now looking to explore using Azure Cognitive Services to create a more innovative digital relationship with its customers. A further step away from traditional banking services that is helping the company show the value of its fully digital approach to the wider Sonae Group.

“Right now we are an electronic money institution, so our next big step is to set up new innovations and provide more financial services to our customers,” says Lima in summary.

“We will need support from both Microsoft and Xpand IT down the line to help process this new information, but embracing new technologies like bots and voice recognition will be key in enhancing how we digitally interact with customers in the future.”