Finastra, the UK headquartered retail banking solutions provider, has established its footprint in the APAC region as it announced two new partnerships in February.

Regtech UNITAS, based in South Korea, and SYSTEX, the IT services provider, based in Taiwan, are the latest firms in the Asia Pacific (APAC) region to partner with Finastra to capitalise on the retail banking solutions provider’s treasury solution, Kondor.

Digital transformation in South Korea

Finastra Kondor enables financial institutions to trade high volumes of treasury while offering the flexibility to support more complex derivatives, options, and structured trades. The solution can be easily integrated with existing systems and applications, enabling simplification, lowering costs and creating a single source of truth – all while ensuring that the organization remains compliant.

Capitalising on the Kondor tech, UNITAS will combine its local expertise with Finastra’s offering to enable more banks in the country to digitally transform and grow their business.

“After many years helping banks in South Korea to digitally transform their treasury operations, we are excited to combine our experience with UNITAS – a leading name in South Korea’s financial risk and compliance market,” said Richard Zhu, managing director, treasury and capital markets, APAC, Finastra. “With its experience and reach in the market, working alongside UNITAS will enable us to bring an even more comprehensive offering to Korean financial institutions and help grow their businesses.”

“With our common client profile, this partnership presents clear synergies and enables us to offer Finastra’s best-of-breed trading system to our existing and new clients, as well as opening up a new revenue stream,” said Dooho Lee, director, UNITAS. “We look forward to working with Finastra to help more banks transform their treasury operations.”

Comprehensive treasury solutions for Taiwan banks

In Taiwan, SYSTEX will resell Finastra’s Kondor and Risk solutions, creating an offering that combines Finastra’s trading system with SYSTEX’s local expertise and broad technology services capabilities. The partnership will enable more banks in Taiwan to digitally transform and grow their businesses.

Finastra Risk is a fully automated, end-to-end solution that allows banks to manage risk and margin monitoring. This is as well as balance sheet optimisation and regulatory reporting. With one dashboard and seamless integration with existing architecture, Risk provides a total risk management system that enables better performance, scalability and visibility for timely and accurate decision-making.

“SYSTEX is a market leader in integrated business solutions and technology services, and we are pleased to partner with them to fuel banks’ trading operations in Taiwan,” said Zhu. “Together, we look to bring a comprehensive end-to-end offering to banks in Taiwan. As a result, this will fuel digital transformation and business growth for banks in this important market.”

Reese Chang, vice president of SYSTEX Co., Ltd. said: “This partnership will provide innovative and comprehensive financial information technology services and solutions. Fintech upgrades and transformation require vertical integration capabilities. Consequently, through this partnership, we are making a strategic breakthrough in the financial services sector.”

Finastra, the financial software application and marketplace provider, has joined forces with Tesselate, a digital transformation consultancy and integrator, to launch a new end-to-end pre-packaged service, enabling US banks to automate manual processes and adapt to new demands. 

Tegula Trade Finance as a Service, powered by Finastra Trade Innovation and Corporate Channels, enables banks to integrate fintech applications that use the latest technologies such as artificial intelligence (AI), blockchain and automation tools.

Trade Innovation is an end-to-end solution for frictionless trade and supply chain finance that uses straight-through processing, digitisation, and data analytics to support growth and agility.

Corporate Channels is a digital banking platform that provides banks with a single portal to unify trade, cash, supply-chain finance, lending, and treasury services for corporates.

Jim McMahon, managing director, head of enterprise sales and strategic partnerships, Americas at Finastra, commented: “Trade finance is a complex industry that is still reliant on manual and often fragmented processes.

“Our combined service with Tesselate delivers the automation and intelligence needed to increase efficiencies and decrease processing times, risk, errors, and total cost of ownership. Importantly, the all-in-one solution promotes interoperability of trade finance processes to reduce friction and complexity, while giving banks the agility to enhance existing or launch new services. We are bringing together Finastra and Tesselate’s industry-leading solutions, services, and expertise to make digitalisation as seamless as possible for banks.”

Future-proofing for US banks

The combined cloud-based service and access to Finastra’s wider fintech ecosystem means US banks can future-proof their business, increase revenue streams, expand into new markets, as well as strengthen security.

Alexandre Arnoux, chief revenue officer and managing partner at Tesselate, also offered his view on the partnership: “Adopting new technology can be costly at every stage, and it can be challenging to resource IT teams with the right skills to manage it.

“By delivering our all-in-one joint solution as a highly secure managed service, banks do not need to invest in significant amounts of additional resources or take them away from their core business to pursue digitalization. Banks can take a modular approach to implementation for better cost and resource control, and we provide ongoing updates, enhancements, and new capabilities at speed. Finastra and Tesselate are natural partners; we are working together to accelerate trade finance digitalization for any size of bank.”

It’s a time of reflection and anticipation at The Fintech Times throughout December, as we look back at developments and trends over the last 12 months and forward to the year ahead.

We’re excited to share the thoughts of fintech CEOs and industry leaders from across the globe to 2023’s key takeaways and what we should expect to be top of the agenda in 2024.

Generative AI, a transformative force within the financial industry, takes centre stage today as experts from Finastra, Fujitsu, Workiva and Unqork provide their 2023 reflections and forward-looking perspectives and predictions for the future.

Finastra underscores its significance in financial software development, while Fujitsu highlights its role in ESG and data classification. Workiva sees it as a means to boost employee productivity, and Unqork envisions its potential in migrating legacy systems and fostering collaboration between business and technology.

‘Generative AI is not going anywhere’

As we approach 2024, the landscape of corporate reporting and compliance is undergoing a significant transformation. In this dynamic environment, generative AI is poised to take centre stage, according to global software-as-a-service company Workiva.

“Looking forward to 2024, it’s clear generative AI is going to make an impact – especially when it comes to corporate reporting and compliance,” says Steve Soter, vice president and industry principal at Workiva.

“Next year, we’ll begin to see reporting teams moving beyond experimentation to using generative AI to boost productivity in meaningful ways, such as drafting starter disclosures and performing data analyses. There’s also a near-term opportunity to leverage generative AI as a compliance check, focusing on how internal teams meet disclosure requirements, and even leveraged to perform audit tests and audit reporting.

“For these reasons, in relatively short-order, generative AI will become increasingly critical in boosting efficiency and enabling insights that lead to better and faster data-driven decisions. As the momentum of generative AI increases, so do the attendant risks and it will be paramount for organisations to ensure proper governance, controls, and human oversight of the nascent technology. One aspect which is clear, is that generative AI is not going anywhere and will play a crucial role in the technology sector in 2024.”

‘Solid progress in improving or deploying AI’

Soter’s insights into the growing role of generative AI find resonance in the observations of Simon Paris, CEO of fintech Finastra, particularly in the realm of ESG and data classification.

“While financial and other institutions have been buffered from the geopolitical and macroeconomic storms that continued throughout 2023, high levels of tech investment remain a priority for many. Within this trend, and for financial institutions’ 2024 outlook specifically, our recent Financial Services State of the Nation survey showed that investments into AI, BaaS, and embedded finance remain investment priorities over the next 12 months.

“AI is, unsurprisingly, high on the agenda, and we are seeing institutions make solid progress in improving or deploying AI, including ML, NLP or RPA. What is surprising, however, is the significant progress already made in generative AI; over a quarter of respondents claimed their institution had already incorporated it in some form and just 6% said their institution wasn’t interested in it. I’m personally excited to see that the most widely cited use case for gen AI was for ESG purposes, specifically data classification and supporting decision-making.

“Finally, and perhaps most interestingly of all given geopolitical and macro-economic context, our survey showed that financial institutions’ executives’ optimism is high; nearly nine in 10 decision-makers worldwide are excited about the opportunities presented by the pace of technological and cultural change within the sector. As we believe, it is only by combining a thoughtful leverage of technology and a continued cultural shift that we will see a widespread adoption of open finance, and all the potential socioeconomic and sustainability benefits that it can unlock.”

“A transformative solution’

Krista Griggs, head of banking, financial services and insurance at Fujitsu, also outlines AI’s transformative potential to enhance employee productivity and optimise operations, addressing the persistent challenges in the financial industry.

“When we look at generative AI, it is already embedded in ‘mainstream’ technology like Microsoft’s co-pilot, will be everywhere,” she says. “As global superpowers debate security, trust, and intellectual property, the adoption of these cutting-edge technologies will continue to surge.

“However, while mainstream banks have reported strong financial performance this year, much of this success can be attributed to interest rate delays for deposits and headwinds remain in the form of high customer acquisition and service costs.

“Generative AI offers a transformative solution—a step change in employee productivity. By automating routine tasks, financial institutions can redirect saved resources toward more strategic initiatives. The pressure to optimise operations has never been greater, and gen AI is the answer.”

‘Analyse IT systems’

While generative AI has emerged as a disruptive trend in 2023, Gary Hoberman, CEO/founder of codeless development platform Unqork, stresses the need to go beyond simply generating more code and instead leverage generative AI’s potential to analyse and migrate legacy IT systems.

“The one thing I am certain of is whichever technology or platform your IT team is creating financial software with today, it has a shelf life and will go ‘end-of-life,” he says. “Each new application created is just adding to the prior technical debt and legacy build-up weighing down what could be great financial institutions.

“In 2023, the most disruptive trend was undoubtedly generative AI. While it’s a fantastic tool, I absolutely do not recommend using it to generate code or build new applications. It can surely create code faster but that code will have the same shelf life so just creating more legacy faster is making companies worse off.

“In 2024, I believe that generative AI will increasingly be used to analyse legacy IT systems and help migrate them to future-proof options, reversing decades of technical debt. Specialised AI models can provide details on how an application’s purpose and functionality can be migrated to newer, legacy-free platforms, offering a more time- and cost-effective solution to modernisation.

“I also foresee the idea of ‘citizen developers’ morphing to a world where business and technology work together to create future-proof software on the same platform.

 

Finastra, a global provider of financial software applications and marketplaces, has launched its new payment solution, Finastra Compliance as a Service on Microsoft Azure.

The service includes Fincom‘s real-time AML (anti-money laundering) transaction screening and ThetaRay‘s AI-powered transaction monitoring as a pre-integrated packaged solution with Finastra Payments To Go. The end-to-end solution enables US and European banks to streamline and automate compliance processes to effectively deliver instant payments. The service will soon be integrated with Finastra Global PAYplus.

“The introduction of any new payment rail brings new risks, and especially when that rail operates in real-time,” said Mike Vigue, chief product officer, payments at Finastra. “We are building on the success of Payments To Go for instant payments by providing accurate and efficient compliance capabilities at a reduced total cost of ownership.

“By pre-integrating Fincom and ThetaRay with our solutions, our customers will reduce the time and risks of launching instant payment services. All the while, they will benefit from a new level of security, scalability and flexibility. Finastra is committed to helping banks keep pace with customer, industry and regulatory demands through payment innovation. We want to bring together our ecosystem of partners to deliver a best-of-breed service.”

Payments To Go is an end-to-end SaaS payment processing solution that enables banks to deliver instant and flexible digital payments faster and more efficiently. Financial institutions can subscribe to the solution through Microsoft Azure Marketplace for convenient billing through one single invoice.

Integrated with Finastra’s Financial Messaging Gateway, Payments To Go provides frictionless, more affordable and direct access to the TIPS and FedNow networks, among others. Combined with specialist compliance services from Fincom and ThetaRay, Finastra Compliance as a Service harnesses the power of AI and ML. As a result, it provides on-the-spot compliance checks for optimal operational efficiency for instant payments.

Real-time compliance to meet real-time payments

Finastra Compliance as a Service helps banks take advantage of, and comply with, a range of instant payment infrastructures. This includes the FedNow service in the US and TIPS in Europe, while mitigating the increased risks of financial crime. With real-time compliance screening by Fincom and real-time AI-powered transaction monitoring from ThetaRay, the service will allow financial institutions to accelerate business growth. Additionally, they can also increase risk coverage and reduce operational costs.

“By delivering relevant value-added payment risk solutions as a service, we will help banks to improve speed-to-market. Furthermore, we will ensure our customers stand to benefit from the ongoing evolution in enabling capabilities like AI and Machine Learning,” added Radha Suvarna, head of BaaS and value-added payment solutions at Finastra.

With banks across Ethiopia set to face a growing number of challenges; Finastra, the financial software application and marketplace provider, explored how they could adapt their approach to ensure long-term growth during its latest event.

Finastra recently hosted the ‘Bankers Breakfast Forum’ in Addis Ababa, the capital of Ethiopia, to explore the challenges faced by banks in the region amid high inflation and interest rate environments, increasing volatility in financial markets, changing customer demands and increasing regulatory pressures.

The forum saw a number of senior stakeholders at banks attend, including C-suite executives, treasury directors and directors of risk.

During a keynote, Jigar Dedhia, head of solution consulting MEA, treasury and capital markets at Finastra, highlighted that more volatility in Ethiopia’s FX market is expected this year, as the country’s debt poses significant risks to its economy and currency.

While positive sentiment remains, as banks in Ethiopia posted their highest growth rate in six years, inefficiencies could lead to missed revenue opportunities. Around 60 per cent of the value created by top-performing banks in a postcrisis recovery is generated within the first two years. Jigar emphasised that by investing in a treasury management system now, banks can effectively hedge their balance sheet risk and take advantage of the opportunity for growth.

A panel discussion followed the keynote, featuring Hassen Mohammed, VP of information systems at Hijra Bank, Makram Salloum, regional head of sales for Africa, treasury and capital markets at Finastra and Zerihun Girma, director of risk and compliance at ZamZam Bank. The panellists discussed how banks can redefine their treasury departments in the modern financial services landscape.

Key takeaways

During the panel, the participants discussed how Ethiopian banks are facing more challenges in complying with complex regulations. For instance, banks must comply with the ISO 20022 messaging standard, International Financial Reporting Standard (IFRS) and directives to ensure effective liquidity management practices. As a result, costs and the time taken to implement relevant changes can be significant.

With this in mind, what solutions could banks in the region utilise to ease these challenges? 

One possible solution could involve the introduction of AI to analyse far greater amounts of financial data in real time. This could enable treasurers to make faster, more informed decisions. AI algorithms could detect patterns and anomalies that traditional methods would be more likely to miss, improving the accuracy of forecasts and reducing the potential for errors.

Panellists also highlighted the importance of automation, cloud and microservices, straight-through processing and analytics – all of which are critical components for modern treasuries. Banks in Ethiopia may require enhanced functionality, modular and scalable solutions for effective asset liability management and to adapt more quickly to new customer, industry and regulatory demands.

Finally, panellists covered the importance of collaboration. Through open finance and APIs, banks in the country can collaborate with technology companies to increase their speed of innovation and reduce the total cost of ownership when rolling out new solutions.

By tapping into an ecosystem of fintechs, they can quickly and seamlessly implement value-added services to future-proof their business and decrease time to value. Remaining competitive ultimately depends on a bank’s ability to provide great products, knowledge, technology and customer service.