Protect, prepare and predict will become the mantra in 2017, Simon Paris, President of software firm Misys, tells finews.asia. Therefore, banks will have to invest more in regtech, risk and compliance.
Mr Paris, with technology now irreversibly re-shaping financial services, are firms in Asia adapting and investing quickly enough?
The financial services industry is undergoing a once in a generation technology shift. If you look at the retail sector, that has gone from mainly in-house systems two decades ago to third-party software providers leading to an enhanced user experience as well as greater efficiency: this is what we are starting to see in financial services.
Could you elaborate a bit on that?
In 2017 we will see the emergence of two-speed banking across the globe. Those in the fast-lane will be preparing for open standards and the Revised Payment Service Directive (PSD2), collaborating with technology providers and empowering themselves with data to provide customers with a better experience. Banks in the slow-lane, however, will be hindered by legacy technology and risk falling behind in this highly competitive market.
«Fintech has been the buzz word of 2016, but for Misys the phenomenon isn’t new»
The Asian market benefits from progressive regulators in both Singapore and Hong Kong. This means that banks and financial services organisations are welcome to explore fintech collaborations and embrace digitalisation, to transform the market.
In 2016 we have seen mass hysteria around fintech’s influence, will 2017 see more of the same?
Fintech has been the buzz word of 2016, but for companies like Misys – a fintech that has been around over 30 years – the phenomenon isn’t new. We have been working in the financial services space with companies all over the world for years, but the new found focus on the sector and its start-ups has generated a new level of awareness.
«The biggest losers here will be anyone that doesn’t get involved»
In 2017 we can expect more discussion around how fintechs, large and small can work together with financial services organisations to help stay ahead of the competition. This may take the form of strategic partnerships, revenue sharing programmes or adapting legacy systems. Importantly, it is about collaboration and a willingness to co-create.
Regulators have a role to play in helping with fintech growth and this will be a focus next year. Increasingly regulatory authorities across the world are launching fintech taskforces in support and both Singapore and Hong Kong benefit from progressive regulators embracing this trend. The biggest losers here will be anyone that doesn’t get involved. In today’s market you can’t afford to be irrelevant.
Apart from the ubiquitous blockchain, what other technologies we will see disrupting the financial industry?
We are on the precipice of an exciting technology-led transformation, but it is early days and it isn’t yet clear how quickly blockchain will become mainstream. Mass adoption could be up to a decade away – but in the meantime we can expect some exciting and innovative applications to be explored as a few more proof of concepts move out of the lab.
«We can expect more and more banks to embrace the cloud throughout 2017»
A recent Misys and Celent report unveils corporate banking use cases in cross border payments, KYC and trade finance, while capital markets sees a focus around improving post trade processing and inefficiencies across various asset classes, notably syndicated lending.
This year, we can also expect big things from cloud, open banking and platform as a service. Right?
With the FCA giving the go ahead for cloud computing use in U.K. financial services earlier this year and progressive regulators in Singapore and Hong Kong that are not afraid to embrace new technology, we can expect more and more banks to embrace the cloud throughout 2017.
Tools like cloud are driving incredible agility and cost reduction benefits and regulatory/security concerns remain important but are being addressed and overcome. And with a groundswell of industry research pointing to these benefits, the area is bound to continue growing.
Does Misys run an incubator or mentor up and coming fintech firms?
We partner with fintechs and other vendors to combine our technology where it makes sense for our customers. It means we can enhance our services and bring innovative offerings to market.
«Cross-industry collaboration has a significant role to play»
Our Platform-as-a-Service strategy (PaaS) will see us open up our FusionFabric platform and core systems to third parties to drive innovation and collaboration across financial services. Students will be able to develop apps for free on the Misys platform through the FusionCampus programme and then deploy and operate these apps in the Misys FinCloud or on-premise.
Are fintechs competition for banks or an opportunity for partnership?
The short answer is both! That said, ignoring fintech progress and adopting a ‘do nothing’ strategy is a dangerous game for banks. Instead financial services organisations must transform their own business models for success. Rather than treating fintech new entrants as the enemy, established players should seek to collaborate where necessary and sensible, to benefit from both new technologies and approaches to existing operational activities.
«In today’s environment a strong focus on cybersecurity is a must in all regions»
Cross-industry collaboration has a significant role to play, with organisations like BIAN (Banking Industry Architecture Network) for example (of which Misys is a member) driving towards open banking standards.
Are banks and financial services companies in Asia doing enough to protect their data?
The battle to protect data is ongoing across the world. In today’s environment a strong focus on cybersecurity is a must in all regions.
In fact in 2017, we will see more focus on this area alongside ambitions to work digitally. Protect, prepare and predict will become the new mantra. Banks will invest more heavily in regtech and risk and compliance, to ensure that security is taken seriously for consumers as well as protecting previous IT investment.
Banks will also have an eye on the future as they make these moves, and will start to benefit from smarter, faster and better via analytics. As well as protecting data, Asian banks can also consider using the data at their fingertips to gain better insight into customer behaviour and provide more tailored offerings.
Simon Paris is President at London-based Misys with responsibility for the entire Misys go-to-market organisation including sales, pre-sales, professional services, partners and marketing. He joined the software company in June 2015 bringing more than 15 years’ sales, management and leadership expertise to the firm.
Prior to Misys he worked with SAP where he held a number of senior sales and leadership positions. He was formerly a senior consultant with McKinsey & Company.
