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Vendor Interview: Simon Paris, Finastra

Simon Paris, deputy CEO, Finastra

At Finastra’s Universe event in London, IBS Intelligence caught up with the vendor’s deputy CEO, Simon Paris.

IBS: Finastra is positioning itself as a platform provider, rather than a software provider. Was that an idea that had its roots in pre-merger Misys and D+H?

Simon Paris: This had been on the cards for a while with legacy Misys. It’s actually an interesting history. When Misys acquired Thompson Reuters’ Kondor platform, the latter had been investing very heavily in a next-generation architecture. We inherited that architecture and renamed it FusionFabric. We used this as an environment on top of which we would do around 70% of our strategic development. This allowed us to write in Java, allowed us to be ready out of the box and leverage in-memory computing. So, pricing, yields, whatever it might be, is built on top of this FusionFabric architecture.

What we realised two years ago was “what if we were to make this externally available” in a platform-as-a-service (PaaS) model. We will as Finastra exist in three simultaneous states: product, solution and platform. You might ask who’s interested from a platform perspective and there’s a fairly long list: system integrators, software companies, fintechs and universities – we have a great use case with the University College of London where the build pricing algorithms for how they make money in capital markets in a negative interest rate environment. Of course, we also have corporate developers who reside in a bank, who are the most important to me.

We can now say to these developers “fear not that your job will be replaced by an application, but look forward to creating front-end innovation” as we will take care of core business processes. In fact, there was a CIO who told me that in the back office there were only four providers globally: FIS, Fiserv, Finastra and the Chinese. The middle office is where the banks sit, while at the front are hundreds, if not thousands of consumer applications. They need a consistent core, and we can build that consistent core. We’re so far ahead, architecturally, that we have a lead of years over our so-called competitors.

IBS: This platform transformation is occurring across the industry. Do you see this leading to a consolidation of suppliers for the banks?

SP: We will never reach nirvana. The reality is that banks will have fragmented architectures and multiple providers for some time. Will those consolidate and rationalise? Absolutely? Banks right now have several hundred suppliers and I expect in the future that will be reduced to the tens. Finastra will of course be a beneficiary of this. What we are also saying is that the rationalisation that banks are doing on their own we will do for them across transaction banking, retail banking, lending, and treasury and capital markets.

IBS: One of your core principles you mentioned earlier today was that Finastra is not about rip and replace implementations, can you expand on that?

SP: We don’t recommend it. But when we say “rip and replace” we mean the whole thing. If you want to consolidate your lending you need to get on with it. It you want to comply with trade you’ve got to get on with it.

IBS: So, how would you approach a large transformation project?

SP: A target operating model doesn’t require you to replace everything with Finastra. If the customer says “I made a bet on Murex, or Calypso”, then they can sweat that asset. We’re not advocating the replacement of good stuff that’s already working; there’s just no business case to replace it. What we can do is leverage it, and open it up through open APIs then we connect to it and work with it. You certainly don’t need to replace it.

IBS: You’ve had Finastra Universe in Dubai, and separate events in Europe – France, Germany and the UK – and one in New York…

SP: You’re very well informed

Caroline Duff [senior PR manager, Finastra]: You’ve missed out Singapore.

IBS: Almost had them all! Does this mean you’re doing the big unveiling of Finastra, following the merger? Your chance to say to the world: here we are.

SP: We have two very different sets of customers that require different types of unveiling. This event – which runs from Dubai to London, New York and the rest – is for our enterprise customers. Let’s class them as Tier 0, Tier 1 and Tier 2 banks. If you went to the New York event you’d see largely the same stuff you saw in London, but with any learnings and improvements built in.

Our second type of unveiling which did very early on, in August [2017]. This was called Perspectives, and was aimed purely at community banks, credit unions and trusts – your Tier 4, Tier 5 and Tier 6 banks. Our third event, which was obviously securities and payments specific, was SIBOS, which we completed in our North American home of Toronto. Those were the three unveilings we’ve gone through so far.

IBS: So, is the process 100% complete? Is Finastra as an idea at the front of people’s minds now?

SP: I don’t think it’s complete at all. I think there are two realities. The first is that repetition is the mother of all learning – you need to repeat and repeat and repeat things to get them to stick. The second thing is that there are stakeholders who have their own cycles. We merged on June 13th, but if the cycles of some have a cut-off date in April, then we aren’t known as Finastra, we’re still the entities we were before.

This is why we’re delighted to spend as much time as possible telling our story. The company as a whole is greater than the sum of its parts and we really believe that. We can do things now which we couldn’t do before, particularly in corporate banking and retail banking for smaller banks.

 

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