Following on from a recent article about Digital transformation in the financial industry, we wanted to delve a little deeper into this convergence of technology and finance, or FinTech, and it’s role in the future of the financial services industry: Does this space represent a challenge to the traditional, or is it — instead — an opportunity to collaborate?
FinTech is the application of technology in finance
To find out, we spoke to Mitesh Soni, senior director — innovation and fintech at Finastra, a global fintech offering the broadest set of financial software solutions available on the market.
A CTO guide to digital transformation in financial services
“We’re embracing a three-year initiative, which focuses on 10 core pillars that includes the transformation of our platform,” said Soni.
“We’re evolving from a product company to a solutions company to a platform company. To enable this transition, we’ve had to culturally move to an agile working model.”
Why the transition?
Accelerating innovation to the end client comes when you bring uncommon partners to the table and you work together, collaborate and learn from each other. You then get unexpected outcomes, and creativity increases exponentially — this type of collaboration is only possible in an open, platform-led organisation.
And to that point, Finastra’s own journey is to build that platform-ecosystem out through FusionFabric.cloud.
FusionFabric.cloud is architected on the cloud; it connects to Finastra’s core applications, and makes that data available to third parties to create applications that create meaningful insights or meaningful customer journeys to end clients.
“That is without a huge amount of regulation on behalf of Finastra,” said Soni. “We simply make open APIs available and third parties can then create.”
How technology is impacting the finance and banking sector
Technology is changing the way businesses operate and deliver products to consumers in many sectors. We have alarms that detect poisonous substances in our air, medical equipment that can identify life-threatening conditions before they become an issue, or smarter computer software to make controlling vital equipment easier than ever before. Read here
Finastra at work
“Finastra’s ‘mission’ is to unlock the potential of people in businesses around the world and to become the number 1 platform supplying financial services,” continued Soni.
“In the past, we’ve built fantastic core applications that service retail banking, lending, treasury and capital market payments; going forward, with our FusionFabric.cloud proposition, we would like to build bridges with the fintech community.”
Why? “To openly collaborate and create an ecosystem that is powerful in the combination of players that can come together and create rich new experiences for our clients and the customers of our clients,” explained Soni.
Challenger or collaborator?
We often report that larger, traditional organisation’s should be wary of disruptors: learn lessons from them, technologically and culturally, but stay away — keep an arm’s length.
However, big banks — and other big players in other industries — should in fact, team up, share and collaborate.
Organisations, such as Finastra, enable big companies to innovate faster. Many of the organisation’s clients, 90 of the top 100 banks in the world, use their technology.
“We have 9,000 clients across the world who use our technology, and the financial institutions are our friends,” said Soni.
“We are putting ourselves in their shoes; thinking what are the big challenges that they are going to face tomorrow, and what is our role as a software company to shape the future financial services.
“Our response to that is we need to produce the widest opportunity for third parties together with banks to openly collaborate and collaborate to innovate. That way, we will unlock the potential of people and businesses everywhere and allow the open innovation ecosystem to build new and innovative capabilities.”
What is digital transformation in business: Everything you need to know
Kicking off Information Age’s Digital Transformation month, we look at everything you need to know about what is digital transformation in business; the challenges, the technologies and above all, how to succeed. Read here
This collaborative relationship, facilitated by Finastra’s platform, means that the global FinTech is not limited to its own R&D capabilities and developer capabilities anymore. They are now reaching out to the open community and encouraging them to bring their innovation and talents to help the large banks.
In the past, these large banks have suffered from not being able to innovate. Now, a collaborative platform that has pre-integrated components and APIs and micro-services will allow customers to have full access to a growing ecosystem made up of fintechs and the larger banks — allowing them to innovate and stay ahead of disruption.