Open Finance will disrupt and reshape the foundation of financial services.
IT financial services provider Finastra is building an open platform that accelerates collaboration and innovation in financial services, creating better experiences for people, businesses, and communities.
ET Insights caught up with Simon Paris, Chief Executive Officer, Finastra to learn how it is unlocking innovation in financial services, and why Open Finance is the key to unlocking the potential of people, businesses, and communities everywhere.
Simon is an inspiring and trusted fintech thought leader and a firm believer in the principles of doing well by doing good. He also chairs the World Trade Board and is passionate about how technology and open trade can drive financial inclusion and improve people’s lives. Edited excerpts:
Q. Can you provide our readers with a quick overview on Finastra?
Finastra is one of the largest global software providers for financial institutions, focusing on four key areas of software applications viz. lending, payments, treasury capital markets, and universal banking.
We serve around 8,500 customers in 130 countries across the world and employ more than 8,000 people. In a nutshell, we are a trusted open-platform software.
Q. Enterprises across sectors are looking to rewire and reshape their operations through the use of cloud; leverage massive amounts of data with AI/ML; partner with digital players to innovate, improve customer experience and drive growth. And finally, they are placing ESG at the forefront of their strategy. How do you see these trends?
You spoke about the four trends, and I agree with all of them. It is important to look at all these areas concurrently and not in isolation. Let me elaborate on this with an example of trade finance.
Let’s take the example of India, which is a high-growth and high-population country. It has huge significance in international trade. Now let’s take the example of the trade finance process from a rewiring perspective. When we think of trade finance, we want to make sure that we comply with all the guidelines and norms around KYC, AML, etc. We need to ensure that the transactions are automated and digitised by using less paper for physical goods, etc. That’s a big rewiring.
You mentioned data, and this data needs to be in digital form. Trade finance is paper heavy. We need to leverage Optical Character Recognition to turn the paperwork into digitised data. This is a big part of making the trade finance process streamlined. Once you can digitise you can digitalise. A bank will not be able to do all those things itself, and it will need to partner to use such services with players like us.
Businesses have started to move rapidly and rethink their core business model through the lens of ESG. We focus on the social piece of ESG. If we can digitise the trade finance process, and make it more accessible and affordable, it can provide everyone a chance to participate in the global economy. We are also developing a product around lending that keeps the ESG framework in mind. Doing well by doing good is the principle that we believe in.
Q. The rise of Open Banking and access to Application Programming Interfaces (APIs) has profound implications for banks and financial institutions. You have been a firm believer in a world of Open Finance, which is said to be the next step in the evolution of Open Banking.
Open Finance will place the power back into the hands of consumers, corporates and all those consuming financial services. We are already seeing financial organisations offering products and services via APIs from external organisations, with customer permission. Open Finance is making the finance sector more collaborative. It will disrupt and reshape the foundation of financial services.
Q. You spoke about ‘doing well by doing good.’ As a company, how are you looking to improve equity and economic prosperity for all?
Around a third of the world’s population is unbanked or underbanked. We want to bring them into the financial services ecosystem that is open, fair, inclusive, and equitable. By placing their needs at the centre, they can be connected with financial institutions, third parties, etc., through which they choose the requirements that can open new opportunities for them. The product and service can be from any company but centred around what suits them best. This will create wealth and transparency and increase global potential. Our purpose is to unlock this potential.
Q. Where do you see Finastra heading next, and what role will India play in your future strategy?
We want to be the number one open platform for innovation in the world of financial services. We believe ‘finance is open’ and we have already taken steps in this direction by launching our FusionFabric Cloud platform. We want to remain open and inclusive, and over the course of time, we want to see our customer base increase to 20,000.
India plays a strong enabler role for us. We have end-to-end product management capabilities in the country, which are playing a key role in driving innovation, new product thought leadership, and enabling closer customer interactions.