Redefining the future of finance

Pulling together: Digitisation enables collaboration – and that’s good for all

Redefiningthe futureoffinance

SMEs have long complained of being left in a financial services and funding wilderness by incumbents. The solutions that Finastra is offering those institutions via its innovative FusionFabric.cloud aims to bring those businesses in from the cold.

In fact, as Finastra’s Wissam Khoury puts it, the company is on a mission to change the world, one app at a time, with SMEs high on the company’s broader agenda to achieve financial inclusion for all.

The Banking for Humanity strand at this year’s virtual Sibos explores just that – the role of the finance industry in everything from better access to bank accounts and loans, to lowering carbon footprints, digital adoption and diversity. Finastra’s contribution to solving some of those issues is to use platformification.

Khoury, who is senior vice president and general manager for the Middle East, Africa and Asia-Pacific at Finastra, believes banks’ previous reliance on building their own in-house solutions has been one of the main inhibitors to innovation, because building out on complex legacy systems is nigh-on impossible and takes far too long. However, the new era of open banking provides a fresh opportunity for the collaboration essential to overcoming this.As well as fulfilling the needs of consumers, pulling together could fuel growth and new income streams.

FusionFabric.cloud is an open and Collaborative fintech has a vital role to play in changing the world for the better, argues Wissam Khoury, Finastra’s Senior Vice President and General Manager for the Middle East, Africa & Asia-Pacific

collaborative development ecosystem designed to bring together banks and other financial institutions with analysts, fintechs, universities, consultants, developers and systems integrators, to find rapid-fire solutions to industry sticking points – and solve real-world problems along the way.

Among its three core components, FusionCreator developer portal and application programming interface (API) catalogue enable users to access datasets, build applications and roll out solutions quickly – including REST API management, a sandbox environment and developer documentation. Its FusionOperate secure production environment, hosted on Microsoft Azure, allows users to connect their apps to Finastra software without building their own Cloud infrastructure, and includes monitoring tools and reliability, redundancy and security. The FusionStore app marketplace is where apps developed within FusionFabric.cloud can be ‘monetised, promoted, discovered and consumed’ – including quality checking and validation, and marketing. It also provides access to extensive marketplace data to drive decision-making.

Committed to increasing innovation speed, Finastra’s vision is to become the ‘number one platform for financial services’ by optimising cost of ownership; driving efficiency through open standards; accelerating growth through new and improved solutions; improving customer experience; offering ‘infinite’ innovation options through APIs, and investing in data curation and growth to fuel artificial intelligence (AI)-led developments, coupled with the breadth and scale of its developer network.

Partners involved in FusionFabric.cloud are diverse and include, for example, Thomson Reuters, which is using the platform to refine how it provides capital markets and regulatory news to financial institutions, helped by AI. Pertinent to the Sibos strand, Finastra is also collaborating on a microfinance initiative in Kenya, bringing together fintechs, a UK university and wholesalers to provide better solutions for assessing SMEs’ creditworthiness, thereby lowering the estimated $19billion funding gap.

As Khoury puts it: “We’re redefining the future of finance. A key aspect is finance for good and improvements to financial services and literacy… helping our customers to create positive outcomes for millions of people, with the COVID-19 pandemic creating a fresh urgency. 

 “The push for open banking, platforms and marketplaces… these changes, across the market, will have to happen, and will stay forever. Our CEO, Simon Paris, talks about deepening the role of finance services to help millions of individuals, small and medium enterprises and communities to navigate the future,” Khoury adds.

THE MOMENT IS NOW “There has been lots of progress in the last 10 years: open banking, open APIs, open communication between banks and third parties and between banks themselves. But more has to be done now, and it has to be done with a huge focus on how to do it the right way. It needs to take into account the new dynamics that have arisen during COVID, with a huge focus also on the existing challenges in finance, such as financial inclusion.”

Building blocks: Finastra aims to make it easier for banks to adapt for the greater good

SMEs’ restricted access to funding is an example of existing issues rendered even more difficult by recent events.

“SMEs have probably been hit hardest as a result of the pandemic, but it has potentially made business banking for small businesses a real focus. It has to. Otherwise, we’re going to face lots of issues because SMEs rely on cash and often don’t have history for credit and struggle to access funds or negotiate better rates.

“There are two causes of this. One, it’s expensive for financial institutions to give loans to smaller organisations and they prefer to focus on the larger ones where they can make more money. The second problem is that SMEs don’t have the data required by the credit or lending models used by big banks to assess their creditworthiness and risk appetite.”

Which is where FusionFabric.cloud comes into its own, by enabling financial providers

to rapidly build or access cost-effective arriving at a place where financial services, solutions that both better serve consumers including smaller fintechs, can come and provide the banks themselves with new together in a marketplace, exchange income streams. experiences and provide more insights,

“The power of data is under-utilised by more data, more user-friendly interfaces for the banking sector,” believes Khoury. “We their client base, which is already used to can have access to metadata to model the getting that service from a non-banking creditworthiness of an SME and assess its environment,” he adds. credit ratios in many different ways other But how can banks collaborate as he than just looking at its balance sheet describes, without losing their essence? and income statement. This includes the Banks need to offer a range of services to nature of the business, its experience, the end user – and not necessarily their successes and gaps in the market. By own. With a collaborative approach, they deep diving the data that’s already there, can become one-stop shops, says Khoury. financial institutions can change the way That will improve the end-user experience they provide their approvals for SMEs, to as well as increasing revenue. contribute better to that SME funding gap.” “Today, banks’ biggest problem is new

Through FusionFabric.cloud, Finastra is entrants into the market, which are not looking beyond financial services, to offer the traditional competitors or banks. We all kind of forward-thinking technology being know that technology providers are utilised by other industries to great effect. entering payments and lending. Over the last two years, banks have realised the only way to ride that wave is to collaborate with fintechs, rather than putting them at arm’s length, to provide a single service to their clients. “Banks can participate in this journey in many ways. They can partner with fintechs through direct Let’s do it right investment; buy or this time. Let’s collaborate, work launch their own fintechs. Or they can open up their systems and utilise together and, more technology like ours to “We are not using any creative technology that importantly, since we are moving access multiple fintechs. “They need an intermediary, which is doesn’t exist today, and at a very fast pace, what we are offering, that’s the beauty of it,” explains Khoury. “The technology that allows let’s not leave anybody behind utilising the latest technologies to enable them to develop apps, us to redefine the future via our open APIs, within of finance, in theory, is already being a few months to just a few days. Our store used by other industries – look at retailers then enables them to manage their app in or ecommerce. We’re trying to bring that the Cloud. Or, just like searching on a technology, in a very secure way, to the phone app store, they can choose one banking sector, along with the regulator and that’s already there, download and use it.” banks themselves. We’re taking their history Thanks to this technology, the future is and solutions and adding these technologies coming fast. on top, to provide new services.” Khoury concludes: “Let’s do it right this

Collaboration is the way forward, he time. Let’s collaborate, work together and, believes, including ‘open banking, open more importantly, since we are moving at a APIs, sharing of data’, for all of which very fast pace, let’s not leave anybody Finastra wants FusionFabric.cloud to be a behind. Take care of financial inclusion, major catalyst, and all predicated on the narrow the gap for SMEs, get the money platform-as-a-service principle. supply and liquidity up and running. At the

“Moving forward, it has to be about same time, ride the wave of digitisation.” ■

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