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Tracking fintech, banking & financial services innovations since 1994
Banking technology innovator Backbase and customer service solutions provider Zafinannounced a partnership today.
The two Finovate alums teamed up to offer Backbase clients access to Zafin’s technology. Specifically, Backbase clients can use Zafin to send their end customers highly personalized products and offers with pricing models that are tailored to each recipient.
The personalization element is a key differentiator. In today’s digital-first banking economy, personalization is a crucial element to customer retention and loyalty.
“This new partnership with Zafin offers our clients yet another way to build hyper-personalized experiences for customers while helping to break away from the legacy systems that have historically slowed the pace of innovation, and we’re excited to see our customers benefit,” said Backbase CEO Jouk Pleiter.
Backbase was founded in 2003 and offers solutions for banks to better engage with their customers. Today’s move is a win-win; it not only enhances Backbase’s offerings, but also provides Zafin access to a host of new bank clients.
The Zafin partnership comes after a heavy month of news from Amsterdam-based Backbase. The company began February with an announcement that it was selected by TechCU to overhaul its members’ banking experience, followed by partnership announcements from Banesco Panamá, Basis Bank, an National Bank of Bahrain.
The following is a guest post from John Mason, Senior Director at Zafin.
Open Banking in Australia kicked-off in earnest in July when it became mandatory for the country’s big four banks to share product reference data (including interest rates, fees and charges, and product eligibility criteria) with accredited data recipients, typically fintech companies who provide alternative products and comparison shopping services to consumers. Also, in July, the same big four started sharing their consumer customers’ data—specifically data associated with deposit, credit, debit and transaction accounts—with alternative providers as requested by the customer.
In an effort to anticipate what lies ahead for Australian banks and consumers as the country joins the worldwide movement to give consumers greater access to products and services that can improve their financial lives via Open Banking, we decided to take a look at an island nation more than 9,000 miles away, boasting 2.5x Australia’s population but just 3% of its land mass—the U.K.
The United Kingdom embarked on its own Open Banking journey almost exactly four years back. In August 2016, the United KingdomCompetition and Markets Authority (CMA) directed its nine largest banks to provide accredited fintechs with access to previously proprietary customer data (pending customer approval, of course) down to the transaction level for current accounts.
Here is what’s happened in the U.K. that may be instructive for Australia:
Consumer up-take for Open Banking capabilities is sizable. As of January 2020, according to the Open Banking Implementation Entity (OBIE), there are one million users of Open Banking services in the U.K., representing a two-fold increase in just six months’ time. Further, the ecosystem of regulated open banking service providers is expanding rapidly. As of May 2020, it stands at 249, up from 100 at year end 2018.
Open Banking’s impact on the payments arena is particularly notable, with 50,000 consumers turning to third party applications to make payments from their current accounts in the month of December 2019 alone.
Investment is strong and widespread. Tink, the open banking platform, surveyed almost 300 senior financial services executives about their Open Banking investments. Almost ¾ indicated that spend had risen year-over-year, while a third stated that their financial institution was spending €100 million or more on Open Banking initiatives, and half projected positive payback on capital invested in Open Banking in four years or less.
Despite strong adoption and investment, consumer awareness of Open Banking is low—perhaps pitifully so. In a 2019 study by Crealogix, two thirds of respondents had no idea what Open Banking was, much less its potential benefits.
Some banks see opportunity in the transition to Open Banking, whereas others view Open Banking as just another compliance obligation. One example of a visionary is Barclays, who empowered its U.K. customers to better manage their finances with the ability to attach non-Barclays accounts to its mobile app—taking a big and bold step forward to participate in the industry’s emerging platform economy.
Interest in the capabilities Open Banking enables varies substantially by different generational cohorts. For example, according to Crealogix research in the U.K., GenZs and millennials are twice as likely to adopt new open-banking capabilities and applications relative to baby boomers.
Many positives and much innovation notwithstanding, for the most part, Open Banking’s promise to drive positive changes for financial inclusion have not yet been realized.
Based on what we’ve observed in the U.K., here are three predictions for how we expect Open Banking to play out in Australia.
Some banks will respond with vision and vigor, delivering new experiences that resonate with their customers and create advantage in the marketplace.
Other banks will view a more open financial ecosystem as a threat and put their heads in the sand, leading to short term investment savings and long-term competitive disadvantages.
Investors—inside banks and outside in the broader fintech ecosystem—will bet on advancing technologies and evolving customer expectations by placing smart bets on future possibilities in the Open Banking arena.
While consumers may never know what Open Banking is, their desire to benefit from new and compelling digital banking services will ultimately lead the overall banking industry to a brighter future—in Australia and the rest of the world. As in the U.K., the advent of Open Banking in Australia will hasten progress, create opportunity and change an industry.
A global product and pricing solution provider for banks, Zafin finished 2019 with a new Salesforce integration and began this year with a major change at the top: adding financial services veteran Venkataraman Balasubramanian (known informally as “Bala”) as the company’s new Chief Technology Officer.
Balasubramanian arrived at the Toronto, Ontario, Canada-based company at a time of major innovation in the financial services industry – as well as a time of significant disruption in the everyday lives of people all over the world due to the coronavirus pandemic. How is Zafin helping banks and other financial institutions cope with the current environment? How do some of the most compelling technology innovations of our time – from advanced machine learning and AI to the blockchain and Big Data – give innovators the tools they need to find new solutions to old – and new – problems? We talk with “Bala” about all this and more in our latest Finovate Alumni profile.
Finovate: You have only been at Zafin for a month or two. How are you finding your new position? Any surprises?
Venkataraman Balasubramanian: It has been an incredible first few months for me here at Zafin. First and foremost, I find myself in the midst of a very talented group of people: engineers, business and technical analysts, a robust management team, and a very dedicated client success team. The depth of these teams is a testament to the value our clients see in our products.
Counter-intuitive yet brilliant has been the approach our management team has taken during these very trying times: to continue to bring in strong talent that will put us in a strong position coming out of this period of economic uncertainty.
Zafin was among the first to move to protect our employees by requiring all to work remotely. Our employees have access to extra “care days” for this year as a benefit. Recognition that the safety and well-being of our team is paramount to our client success is unusual to see in a business our size and one we continue to focus on.
Finovate: You have more than 35 years of experience in financial services and information technology. What attracted you to Zafin?
Balasubramanian: Digital was here to stay even before our current crisis. It is now even more so cemented in our everyday lives. This aspect of digital, however, goes far beyond the creation of experiences into the digitization of entire workflows — propositions that resonate in this context with a cloud-first service architecture, enabled by artificial intelligence and machine learning.
The implementation of such a system typically requires truly digital fintech partners (such as Zafin) and services integration (SI) partners. Having spent considerable time with SI partners in my prior roles, I felt that the timing is appropriate to work with a specific digital enabler. Zafin provided that opportunity in that its solution truly enables a digital transformation of the customer experience across the entire customer relationship and banks’ business lines.
Finovate: What are some of the things you are most eager to accomplish in your first year as CTO?
Balasubramanian: We are a cloud-based solution today, and I would like for us to be a multi-cloud solution in a manner that is unique. We are currently defining that framework, and I hope to get it to completion during the year.
In the era of digital transformation, core systems transformation will progress considerably. To that end, I expect to work with both existing core providers and transformational core providers to enable a “Bank-in-a-Box,” with a modernized core and externalized cross-product layers that enable product, pricing, and billing functionalities. Further, we will look to incorporate AI/ML capabilities into our solution to create proactive end-user interfaces.
Finovate: What are some of the most significant changes in the banking industry going on right now and what role is Zafin playing to help banks and other financial institutions successfully navigate these changes?
Balasubramanian: COVID-19 has redefined life as we know it, and financial services are no exception. Whether it is social distancing, phased restarts of the economy, or just the uncertainty that this virus has created, it has made us all think about the experiences we want in our everyday lives. Naturally, this means digitizing many facets of those experiences.
We want payments to be contactless and frictionless. We want highly relevant products and offers that seek to simplify our lives. From a banking perspective, Zafin works with banks to digitize the product lifecycle and its applicability to pricing and billing by injecting the customer and relationship context. We also enable banks with a cross-product layer that allows the centralization of product variants across the various systems. These are fundamental building blocks as a bank strives to digitize customer journeys.
Finovate: There are a number of enabling technologies that are helping drive innovation in fintech right now: AI, Big Data, blockchain, machine learning, and so on. Which technologies do you believe are being leveraged most effectively in the industry and how?
Balasubramanian: Each of these enabling technologies is at various stages of maturity, depending on the use case. Blockchain has great applicability not merely as a decentralized ledger, but also in immutability. Yet, that set of applications has some adoption in capital markets and not quite yet in other facets of the industry. Community creation has been a major impediment to its success.
Big Data, AI and ML have a slightly more nuanced twist: These require a considerable upfront investment in terms of data and infrastructure, hypothesis creation, testing and validation to produce a result. This will likely only be valuable if it is integrated into the delivery system — otherwise, it may turn out to be nothing more than an interesting experiment.
As these technologies and usage mature, they will prove more valuable. The discontinuity that the current situation creates allows for value systems to be re-arranged, and, in so doing, I believe many more interesting use cases will be discovered.
Finovate: Tell us more about how the COVID-19 pandemic is impacting Zafin and the work it does? How is it impacting you and your work, having just arrived at the company?
Balasubramanian: If there was one major surprise for me that I didn’t answer in the very first question, it is this. We were among the first companies to transition our entire workforce to a remote setup. We rapidly implemented technologies to enhance internal collaboration and client communication. Working remotely may have impeded my own ability to get to know my team personally (as I would have typically done), but given the circumstances, our transition has been about as seamless as it could have been.
In some cases, COVID-19 has accelerated banks’ plans for digital transformation. Based on the volume and nature of conversations we’re having with banks and partners, if anything, the interest in and demand for what we offer has only increased over the past few months.
As much as we hope for the return to what we knew as “normal”, we are also certain that a new normal will emerge. And we think we are well prepared for that.
DXC Technology and Zafin have announced a partnership that will bring a standard connector between the former’s, Hogan core system and Celeriti’s digital banking front-end, and the latter’s product and pricing control solutions, reports Martin Whybrow of Fintech Futures (Finovate’s sister publication).
The tie-up would enable the Hogan and Celeriti user base to externalize product and pricing control, thereby accelerating speed-to-market for new solutions, with additional capabilities such as relationship pricing and better control and governance.
The Hogan and Celeriti systems were derived from the CSC part of the merger with the Enterprise Services business of Hewlett-Packard that created DXC Technology in April 2017. They now reside within a DXC subsidiary, DXC Celeriti (CeleritiFinTech until recently). The Hogan system is one of the oldest on the market, launched as a mid- to high-end retail offering at the end of the 1970s. There is now a fairly small, largely US-centric user base.
Phil Walton, vice-president and general manager, DXC Celeriti, said: “We’re always looking for ways to help our clients meet the ever-increasing expectations for personalized banking services. Zafin enhances the relevance, precision and agility of their pricing strategies.”
Toronto-based, Zafin, was set up in 2002 and earlier this year raised $17.2 million in private growth financing led by Vistara Capital Partners, Beedie Capital and Accenture Ventures. It claims 30+ retail and commercial banks as clients.
Zafin demonstrated its enterprise banking platform at FinovateFall 2017.
In a statement, the company said the funding will help it “fully execute” its business plans, including expanding market share worldwide. Zafin founder and Group CEO Al Karim highlighted four areas – open banking, core transformation, AI, and machine learning – where he believed the company and its investment partners can deliver value.
Zafin’s technology powers strategic pricing, product, and customer strategies to help FIs increase profitability, deliver more personalized services and solutions, and compete more effectively. Alan McIntyre, head of Accenture’s global banking practice, praised Zafin’s offerings, noting how the company helped “financial institutions to improve pricing, personalization, and product make-up without having to replace their legacy systems.” McIntyre said this was especially important “for many of those not among the top ten players in the market.”
Vistara Capital Partners founder and managing partner Randy Garg was impressed by the company’s traction. “Zafin’s innovative solutions have become increasingly known amongst global banks as the sector continues to go through its technologically driven evolution,” Garg said. “Over the past several years of our involvement, it has been very satisfying to see the levels of adoption taking place with many of the world’s most discerning bank customers.”
Zafin demonstrated its miRevenue Enterprise Banking platform at FinovateFall 2017. The company was recognized by Deloitte as one of the fastest growing companies in Canada in 2016, and today has more than 40 global banking customers in the U.S., Canada, Europe, and Asia. Zafin was founded in 2002, and is based in Toronto, Ontario, Canada.
Digital banking platform provider Zafin and global professional services company Accenturehave forged a new relationship that is both a strategic alliance and an acquisition. The companies have announced a “joint go-to-market strategy” that will make Accenture the preferred integrator of Zafin’s financial platform. And by bringing on “select employees” from Zafin’s professional services business, Accenture also gains the technical integration and development capabilities it needs to enhance its own financial services offerings.
For Zafin, the alliance and acquisition gives the company the opportunity to “focus squarely on product innovation and technology” said CEO and founder Al Karim Somji. He added that the partnership also provides the Toronto, Ontario, Canada-based firm with “rapid scalability.”
“We are particularly proud of the work we’ve done with our clients globally,” Somji said, “and expect our expanded relationship with Accenture to enable us to accelerate our momentum in the market.”
Zafin offers financial institutions around the world technology that drives relationship pricing, bundling, and rates management strategies. The company’s platform enables financial institutions to boost revenue and efficiency by upgrading legacy infrastructure which, among other benefits, helps them improve client engagement via solutions and services that deliver greater customization for consumers and greater profitability for banks.
Head of Accenture’s global banking practice Alan McIntyre blamed legacy IT systems for the inability of many FIs to modernize the customer experience, and pointed to Zafin’s technology as a solution. “Zafin’s software enables financial institutions to improve their pricing, personalization and product configuration without having to replace their legacy systems,” the senior managing director said.
Zafin demonstrated its miRevenue enterprise banking platform at FinovateFall 2017. In May of this year, the company announced a partnership with Celero, an IT solution provider for credit unions. In April, Zafin inked a strategic partnership with the Empire Startups, a global community of fintech entrepreneurs, investors, and innovators.
Named one of Canada’s 50 fastest growing companies in 2016 by Deloitte, Zafin has more than 40 global banking customers in the U.S., Canada, Europe, Asia, and India. The company was founded in 2002, and raised $30 million in funding previous to the alliance and acquisition by Accenture.
With clients in more than 120 countries, Accenture offers a wide variety of strategy, consulting, technology, and operations services and solutions. The company partnered with mBank at FinovateFall 2013 to demonstrate the Polish bank’s next generation online banking platform. Accenture was founded in 1989, and is headquartered in Dublin, Ireland. With a market capitalization of $106 billion, Accenture trades on the New York Stock Exchange under the ticker “ACN.”
In the words of Adam Nanjee, SVP for Digital Banking at Zafin, today’s announcement on the launch of Zafin Client Offer Management is the product of “fifteen years of domain expertise and collaboration” with the company’s clients and partners. “We are proud to release another avenue for our corporate banking clients to drive more revenue, create operational efficiencies, and expedite digital deployments,” Nanjee said.
Designed for Relationship Managers at Tier 1 banks, Zafin Client Offer Management enables them to test and analyze “what-if” pricing models in real-time without needing technical expertise or IT involvement. The cloud-based platform automates manual, often spreadsheet-based processes and works seamlessly with legacy banking systems to create efficiencies and reduce costs for banks.
Adam Nanjee, Zafin SVP for Digital Banking, demonstrating miRevenue Enterprise Banking Platform.
“Zafin’s platform is trusted by several Tier 1 corporate banks to enhance revenue and service their clients effectively,” Dinesh Krishnan, MD of Global Product Development at Zafin said, adding that the platform has been designed “from the ground up to suit the needs of our corporate banking clients.” Client Offer Manager, which helps FIs ensure profitability by linking pricing to specific performance metrics, is currently deployed with a Tier 1 bank, according to Zafin’s announcement.
Founded in 2002, Zafin demonstrated its miRevenue Enterprise Banking platform at FinovateFall 2017. Earlier this year, the company was a finalist for PwC’s Vision to Reality Innovator of the Year competition. Headquartered in Toronto, Ontario, Canada, and with offices around the world, Zafin’s global banking customers include HSBC, Barclays, Standard Chartered, TD, and National Bank of Abu Dhabi. The company has raised $30 million in total funding and includes Vistara Capital Partners, Kayne Partners, and Kayne Anderson Capital Advisors among its investors.