INNOVATION

Innovation through technology is a natural process in any industry. It is part of humanity to find better ways to do anything, we have observed it and documented it for as long as we can remember. In the financial services industry it is even more important.

Financial products, and the companies that provide them, have been enormously transformed over the last 10 years, largely due to the capabilities and benefits that new technologies provide. Aspects such as processing enormous amounts of data in real-time, the ability to interconnect a system in any place, and the reduction of costs thanks to the availability of cloud services, are palpable examples. These capabilities are now available to complement the value offer of any organization or – in more disruptive cases – the complete transformation of the business. As we saw with Uber and Shopify worldwide, and Rappi and OXXO in Latam, every single company – even those that have nothing to do with financial services today – can launch a fintech company.

In present times, every company should be thinking about how to leverage financial services to better serve their customers, better retain them, and drive more business. In the not-too-distant future, nearly every company will be a fintech company and get a significant portion of their revenue from financial services.

NEW OPPORTUNITIES

Currently, it is possible that new startups can provide innovative products or services quickly and competitively, or nimbly evolve their technology to expand their business model. Similarly, traditional financial institutions can create and offer these new products by tapping into cloud services, and moving away from the limitations of their traditional IT landscapes.

Customers of the financial services industry – a group in which we are all included – have increasing access to technology in the form of smartphones and IoT devices (Amazon Echo, Google Home, etc.) as well as increasing expectations on the products and services they (we) consume. Having a credit card transaction rejected, having to pay in cash, or simply waiting too long for a transaction to be completed, are now considered shortcomings in any financial service. Furthermore, some customers expect to meet with their financial institutions where they are, to the point where J.P. Morgan opened a lounge in the Decentraland Metaverse.

However, innovation is not easy, and traditionally it has been more complicated in financial services, partly due to the regulatory aspects and processes that must be resolved during the design and operation. We take as example existing institutions, many of which have been around for over a hundred years, and have a large physical retail presence. In this scenario, it’s hard to cut down costs quickly. Sometimes the branches of those large banks imply long-term leases or holding to real estate assets, with thousands of employees and moving parts. Thus, it is hard to launch new products quickly when you are training thousands of employees across the country. Even if we hear that some of these incumbents have $1 billion+ IT budgets, 75% of those dollars are spent on maintaining products that customers don’t already love.

The good news is that SAP Fioneer and DYCSI are here to help incumbents and non-banks to move to the cloud and capitalize on these new opportunities. Deeply understanding banking and financial institutions, DYCSI and SAP Fioneer combine decades of experience providing software for the financial industry.

NEW TECHNOLOGY

SAP Fioneer owns a wide portfolio of cloud solutions that can help companies expedite their transition to the cloud. This technology can be deployed on top of the major cloud services, such as AWS, Azure, and GCP; adding a business layer that is specialized and necessary to run a financial institution.

Some of these products come with a package of configuration and data to make them plug-and-play, as it is the case of C4B (Cloud For Banking), a fintech solution co-conceived in cloud capabilities that simplifies core banking. C4B is the next-generation system that delivers end-to-end processes across business functions, at scale, in real-time, and using leading technology to equip institutions to focus on executing their strategic priorities.

These solutions are mature, and have been built throughout the years to cover a wide range of regulatory scenarios for different countries, payment methods and channels. Nonetheless, SAP Fioneer and DYCSI work in collaboration to enhance the solution, and add new use-cases and integrations every year.

Finally, due to their cloud nature, these solutions can connect with any third-party applications through well-documented APIs and with enough technological capabilities to make that integration smooth, secure, and stable.

“We can take Mexico as an example, where 80% of the payments are in cash, they’re going to need a layer that helps get cash payments into the online system.” —Joe Torres, DYCSI CEO

NEW SOLUTIONS AND REVENUE STREAMS

As incumbents and new players compete to make better product offerings, non-banks offer financial services as part of their business model, and market dynamics remain ever-changing. We can expect customers to split their financial activity across multiple institutions, increase their tolerance for switching costs, and decrease their tolerance for solutions that are not adding them some kind of value.

“I believe that in the not-too-distant future everyone no matter their socio-economic demographic, no matter where they live in the world, will have access to affordable financial services.” —Joe Torres, DYCSI CEO

A large part of the revenue stream will not come from traditional sources. For example, banks that thrive on collecting large fees will be second to fintechs offering the same service for free. For this reason, alternative ways of capturing the share of the value added must be explored nimbly and continuously, and the financial products must be delivered in a cost-efficient way that enable companies to make changes in the revenue and cost structure to accommodate new regulations, strategies, or technology paradigms.

Companies that plan for success, either incumbents or new entrants, banks or non-banks, must choose technologies and partners with the right vision for the future; striking the right balance of innovation and maturity, agility and robustness, time-to-market and security.

This is why SAP Fioneer, combined with the experience of partner’s such as DYCSI, is a great fit for companies planning for success in the financial industry. Fioneer brings to the table proven solutions and an adaptive spirit to help customers think outside-the-box and move quickly, while DYCSI provides industry knowledge and first-hand experience with customers around the world.

As a Fioneer trusted partner, DYCSI has co-innovated with SAP Fioneer, implementing C4B around the world. DYCSI’s motto is that they simplify SAP Banking with the right talent at the right time, and they have been doing so for 20 years.