FINTECH is gathering momentum globally with countries competing heavily to be the FinTech center of choice, recognizing that each region will only have one major FINTECH center. Free of legacy, and able to scale faster than companies of old, these companies are able to utilize latest technologies, in order to make their operating environments proactive rather than reactive..
Can the operating environments really be that different for FinTech? Yes, technology has changed very fast and costs of deployment are lower than before but the real and fundamental changes come from what software vendors can achieve utilizing these newer technologies. They can now deliver to businesses :-
End user driven systems that can define processes for data collection such as smart forms or data feeds or email with zipped attachments, for both structured and unstructured data, through all process flow transformations to reporting / visualisations. These can be achieved, even for the most complex process or tasks, against “One Button” to get all relevant information on “One Page” with any required segregation of duty.
Contextual actionable alerts or workflows that can provide a way to reverse the current 80% time on process and 20% on management.
“Business Simulation” capability to fine tune processes and flows.
Work at real time or near real time with the capability of changing the business offer on the fly to maximize revenue and reduce risk.
What prevents a lot of businesses today from moving towards real time is a result of legacy, that still lingers today. Systems are not end-user driven, are slow and reporting is difficult, due to legacy design restrictions. As a result of these limitations, business processes see many additional “external” processes driven in spreadsheets to bring data points together from different process stages to make a decision.
So what has changed ? In essence underlying technologies from the view of hardware, software, and infrastructure have come together and have enabled nimble software vendors to deliver next generation systems. In fact these underlying changes are iterative and compelling but when combined, deliver fundamental and desirable changes that can be leveraged to great advantage for a user. Also, it seems that we can already see the seeds that are in place for even further evolution or more likely revolution; so at a high level what are they ?
Many software solutions today are 32 bit but modern software today, as discussed, is in transition to 64 bit. Although we all see more deployments of 64 bit systems, unless software is written to leverage the advantages of the processor’s cores and threads, these system do not run at the highest speeds.Software has to be written specifically to support cores and threads and hence this is why older systems do not support this capability, as the effort can be very large, time consuming, and therefore expensive.
It should be noted also that until recently hardware advances have outpaced changes in software development to leverage them, as it has taken software houses some time to get themselves in a position to best understand how to write the software to leverage new architectures and most importantly how to introduce it into product ranges.
Latest compression technologies, for both programs and data, provide smaller processing packages so more can be achieved with the same level of hardware resources.
NOSQL databases provide faster underlying database technologies for processing.
Users are always requiring more processing power to undertake reporting more quickly and this has been coming at a steady pace, with the progress itself, driving further demands on compute resources. Software development changes have lagged hardware developments but, as you can see from above, software houses are changing fast and are being facilitated by :-
Changes from 32 Bit to 64 Bit processing, that might seem like an old story, but which is very much a current issue for businesses, with many systems facing difficulty to leverage the 64 bit processing power as expensive software rewrites are required.
It is interesting to note that mobile operating systems are mostly 64 bit with the same rhetoric coming that this is an overkill today in the market. It really comes down to the market transitions that are playing out, but with voice control and technologies described in this communication,one can start to see the future of everything crucial being at one’s fingertips within 3 clicks.
Ever increasing bandwidth with 10Gbps lines increasingly available in specific locations but recognizing that this is not universal so any movement in the slowest speed connection moves the game on but the underlying progress is clearly seen.
Cloud based architectures are getting more sophisticated from the already emerging on-premise and cloud deployments. The emergence of cloudburst capability continues with the ability, within a process, to automatically process ( not store) on Amazon Web Services or Microsoft Azure.
Document Management systems (DMS) facilitate processes and reporting and where relevant allows you to access and search underlying documents for key information. Systems can be workflow based or can operate in parallel giving you the ability to refer to source documentation.
Leveraging these new technologies has enabled software providers to add significant value to new or existing processes by looking at data capture, complex transformational processing and reporting aspects of a specific process ALL DRIVEN BY THE END USER. What are these changes ? :-
Speed of processing and technological focus now supports end-users to work with transactions at the lowest level and where necessary to combine relevant details to facilitate a process from legacy sub-systems. Examples might be adding purchase data to POS streams or looking at Projects in detail across applications ie inventory, purchases , sales and WIP.
Working at Contract Level to explode new contracts into underlying monthly accounting entries with amortisation allocations if needed.
Providing multi dimensional analysis capability with ranking at entity, region or global level.
Virtual Assistants that can help with data collection, monitoring and “Business Simulations”.
Providing “Continual Monitoring” to give contextual actionable alerts and/or start workflows.
Provide “Business Simulation” capability for overall management purposes or for changing the “offer” to specific demographic groups based on past operating experience.
Enabling smart forms to capture required data input with forms specific to process.
The above changes are a significant enabler towards the real time enterprise and for continual process improvement and perhaps are the missing piece as to why corporates for years have felt that application systems do not go far enough to remove pain, despite years of constant upgrades. In fact “Gartner predicts that by 2020, 75 percent of application purchases supporting digital business will be “build,” not “buy.” Gartner’s research shows that many organizations already favor a new kind of “build” that does not include out-of-the-box solutions, but instead is a combination of application components that are differentiated, innovative and not standard software or software with professional services (for customization and integration requirements), or solutions that are increasingly sourced from startups, disrupters or specialized local providers. ( Source Gartner Says Modernization and Digital Transformation Projects Are Behind Growth in Enterprise Application Software Market – August 27th 2015 ).”
Organisations want to get to real time as they want to have tighter and more granular control over their processes, as well as being able to project cashflows and profits with greater accuracy. There are some processes that make real time processing hard to achieve and these issues at a macro level include consolidation, budgeting, closing, cash management, reconciliations and at a micro level include calculation of commissions, project management, contract management, loan management, inventory valuations, liability management, supplier rebates, to name but a few.
FinTech companies have no baggage and have shown how today’s technologies can be used to support disruptive ideas and when it comes to regulatory compliance will benefit from having the ability to build business views quickly from underlying information, even if it involves segmental and transformational reporting.
Applying these technologies to a non FinTech company is a no brainer. These can make a corporate agile and can provide the glue between existing legacy systems enabling smoother processes, and can get the organisation towards or at real time reporting without having to change underlying systems. They have the use of latest technologies with the ability for an end user to define a process with all processing transformations thru to reporting. They benefit from Virtual Assistants, Contextual Actionable Alerts / Notifications / Workflows and “Business Simulations” giving instant notification and scrutiny capability to the right people together with supporting documents and workflows. The ability to change an “offer” on-the-fly, will see this technology being used to maximise revenue and cost efficiency, and is a game changing reality for the taking!