Innovation and agility, Nelson Wootton, CEO & Co-Founder, SaaScada

By Puja Sharma

At the most recent Global FinTech Innovation Awards, SaaScada, a NextGen data-driven core banking engine, picked up 2 awards for a project with Allica Bank

Nelson Wootton, CEO and Co-Founder at SaaScada, takes us through the solution provided for Allica and SaaScada’s prospects for the year “We won the award for a digital wallet product we built with Allica. It is a super interesting project because of the traction and the learnings that the bank gained as a business, their ability to pivot because of real-time data and genuine agility into the core and the resulting success. So, for Allica, for their business current account, we launched, as part of that product, a savings wallet inside the account.

“So, you have a transactional account, and inside that you could ring-fence funds, and those ring-fenced funds would earn interest. No one’s really done that before. Other banks have launched digital wallets, but they haven’t made them interest-bearing. “Allica got an awful lot of traction for this but weren’t really seeing the kind of level of transactions they thought they were going to. It turns out that what everyone was super-excited about was actually the interest-bearing wallet. And on understanding that, the bank then doubled down to launch further deposit accounts on the platform and got staggering growth through it.

“Allica got an awful lot of traction for this but weren’t really seeing the kind of level of transactions they thought they were going to. It turns out that what everyone was super-excited about was actually the interest-bearing wallet. And on understanding that, the bank then doubled down to launch further deposit accounts on the platform and got staggering growth through it. “It’s a story about being innovative, getting real customer traction, even if it isn’t quite what you expected, using those data points to understand what’s really applicable for your customers at that moment in time, and then delivering products out to them really rapidly.”

What trends are you seeing in the industry now.

“Lots and lots of growth around a variety of different styles of lending product, both secured and unsecured. We have some genuine innovation in that space coming in the UK shortly, but I am unable to tell you too much about it right at this moment in time! The cost of money has gone up and, consequently, lending has become a real hot topic again for a lot of financial institutions.

“As a business, we continue to see enormous growth in Europe, Central Europe, and we are starting to see an awful lot of growth in Eastern Europe as well.

“It’s a part of the world that traditionally builds a lot of tech itself. It has an awful big kind of library of competent IT staff, the people that financial institutions have been outsourcing to for years. But what we’re also seeing is that sometimes those organisations struggle to scale with some of that bespoke infrastructure and bespoke applications, and then look to adopt a more modernised, agile approach. That’s really where we’re seeing an awful lot of traction. It’s a really, really exciting space.

My pipeline is full of opportunities from that part of the world. “We’re also starting to see traction in places like Africa. There’s some real innovation going on there, and some fascinating financial services products being launched in that continent, and in Southeast Asia as well. It does seem to be an incredibly active time, particularly for us. “I think we closed 4 deals in the last quarter, which for a core banking system is pretty awesome, and we’ve got a lot of deals coming through to us right now – all of them centred around innovation. I’d say around 30% of financial institutions looking to migrate away from legacy tech onto something more modern. I’d say around 30% of it is existing financial institutions launching new product, and probably another 30% is innovators, challengers, and Neobanks.”

Data management has always been important, but would you agree it’s taken centre stage now?
“Financial institutions have traditionally used a CRM to understand their customers. I would argue that’s not a great source of information. It’s only ever as accurate as the amount of information that you put in it.
“Transactional information is what is really going to help you understand what’s going on, and providing that information in real time is transformative to a financial services business. The depth of understanding that you can have about your customer by looking at that information in real time is staggering, and financial institutions have often struggled, particularly on legacy platforms, to access that data in a meaningful way.

“The consumption and the ingestion of that vast quantity of data is a lot easier to do now than it has been historically, and it is absolutely critical to understanding what your customers are doing. You can even use data to nudge customer behaviour. “Imagine Mrs Jones, who pays her cleaner by cheque once a week. Imagine understanding that Mrs Jones is using a cheque, and it’s probably a cheque for £10-20. It’s not a significant amount, and it probably costs the bank £2 to process that cheque. Now imagine a rewards programme where you reach out to Mrs Jones and say, you know what, if you transfer that money electronically, we’ll pay you to make that transaction happen, and we’ll do that for a year, and you absolutely know Mrs Jones won’t go back to her chequebook after that.

“It’s a great way of transforming customer behaviour and benefiting the bank and modernising how things are done, and it’s only really possible if you actually understand what your customers are doing.”

What about artificial intelligence?
“Big subject isn’t it! For those who doubt, I would urge you to read the book The Coming Wave by AI entrepreneur Mustafa Suleyman, the founder of DeepMind. AI is coming, there’s absolutely no doubt in our minds. Being prepared for that means having access to your data. But I also think that it comes in subtle ways. I know there are giant projects like Klarna, replacing big chunks of their customer services team with AI, and there are definitely projects like that running on. But where we see super interesting projects happening is where businesses start playing with AI tools in order to optimise every part of their operations. “It’s really, really exciting. I don’t think we’re anywhere near understanding how transformative it’s going to be. But it is going to be transformative. AI represents enormous opportunity, but it needs to be treated with care, consideration and respect with the implications it has for your business. But a super, super exciting space to be looking at right now.