IBS Journal May 2017
47
DOES FACEBOOK SUDDENLY WANT TO BECOME A BANK?
NO THEY DON’T. IT’S NOT THEIR CORE COMPETENCY
hosting through to the full BPO.” Avaloq has centres in its home country as well as in Germany and is now looking at setting up a number in Asia. Local infrastructure will play a more central role in full back office servicing, while ASP and smaller-scale operations can be run through multiple global sites.
Attitudes towards the cloud are set for change, especially in the larger more security-conscious banks in Europe. “We are really now starting to push our ASP offering in other markets, something we have decided to pursue proactively. The reason for that is there are a lot of components to launch a digital service. Although a lot of these components are relatively lightweight in terms of complexity, it becomes more complicated on some mid-range IBM computer and everything runs on that. There’s lots of layered technology and it’s just easier for small and medium organisations to plug in and play.”
Avaloq is seeing demand for cloud-based services increasingly in the digital space but also when it comes to core banking. A number of conversations have been had with clients, where the question of data security has been brought up. “We ask them if they’re happy with their data sitting in Switzerland and the answer is typically yes as long as it’s secure.”
In the UK that’s not strictly the case, however. Most of Avaloq’s clients are still operating on a deployed model with the vendor supplying the software and the services for on-site use. “If
you’re a large bank like an RBS or a Barclays you’ll have a large datacentre and big support teams capable of managing the infrastructure so it’s perhaps less of an issue for them.” When it comes to smaller and medium-sized institutions, it’s a far more attractive proposition to have a vendor like Avaloq manage those issues for them.
Compliance and regulatory upkeep is a major sore spot for banks and clients at the moment. The need to keep up with a changing regulatory landscape is affecting almost everything that major firms do and is even affecting the core in unexpected ways. “If you look at a lot of the projects we’re doing with our customers – whether existing or new – it’s usually on the compliance side.” On the private banking side, the way that advice must be given, a move away from commissions and charging for advice, has driven a need for change in the market. Places like the UK and Australia are leading the line, states Longden, but there are advances happening “the world over”.
Pragmatic approach
When it comes to FinTechs, the focus is very much on collaboration. “We have a number of schemes running around FinTechs, one of which is the Software Exchange. I don’t want to call it an App Store but the similarities are there. We’re in the very nice position in that there are four trillion assets around the world running on an Avaloq platform. That’s a big number.
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