SmartStream
TLM Aurora is SmartStream’s digital payments reconciliation platform, formerly known as Corona. It provides the next generation of operation control for the digital marketplace. It supports Swift and SEPA transfers, mobile, cash and card payments, digital currencies, settlements and reconciliations, and is capable of helping small organisations and large banks. “We are building all this software to be cloud-native, and more and more people are moving to the cloud,” says Roland Brandli, strategic product manager for TLM Aurora. “We will be able to eliminate the database completely. Aurora is fully containerised, so it fits into the deployment model of cloud and we can set up the environment in minutes.”
Similar benefits accrue for the fees and expense management solution (FEMs), overseen by managing director of global utilities Peter Morris. “The greatest benefit of managed services is that it can take on everything, set it up and have all the data in place to calculate what is being done and to check the accuracy against bills from external sources,” Morris says. “And time to market is faster. Our systems don’t intrude on a client’s operation – we just go in and get the data. We fill a big skills gap in the market. Managed services is more meaningful for FEMs than even reconciliation.” The incorporation of more solutions into its portfolio has fuelled stellar growth in that part of SmartStream. “The managed services business has grown by 25% in terms of revenue this year, and that is consistent with a growth rate of between 25% and 35% for the last five years,” Morris adds. “But there is so much more potential. We are engaging with many different clients from big retail banks to tiny little hedge funds, and another Tier 1 bank went live three months ago. Managed services is growing faster than SmartStream as a whole, so that is where the real growth is.”
Safe and sound
A key factor in the growth of managed services – and the adoption of cloud services in general – has been a fundamental shift in mindset regarding a crucial issue that banks have struggled in the past: security. A major hurdle to adoption in the earliest days of the cloud was the perceived risk of handing over volumes of sensitive data to a third party, due to concerns about the service provider keeping its own systems secure. Now, banks have been persuaded that the cloud – operated by the likes of Amazon Web Service (AWS), Google Cloud and Microsoft Azure – is as secure, or more, than private cloud or data centre infrastructure. “Information security was always a top priority for our clients and it is still a major topic,” notes Smith. “Security questionnaires are getting longer – they used to have 300 questions but are now more likely to have 1,000 questions… As banks are putting more into the cloud, they are starting to do more annual audits.”
Future Banking /
www.nsbanking.com
“The public cloud is still a more secure environment than a bank’s own on-premise data centre, because public cloud service providers invest in security on a much larger scale than an individual bank. I work with the big three cloud providers, so I benefit from their investment in security, which remains a big focus for the financial services industry.”
This shift comes at an interesting time, given the pandemic has seen spikes in cyberattacks on corporate entities. Reported attacks in 2020 rose by 69% over the previous year, according to the FBI, while a recent study by McAfee found almost 3.1 million external attacks on cloud user accounts during the year. While the risk of cyberattacks may be greater, partly due to remote working, cloud service providers have upped security measures and SmartStream has been developing tools to respond to security reviews. It also achieved the highest level of Payment Card Industry Data Security Standard (PCI-DSS) certification. “There are changing attitudes towards the cloud and we offer our clients a dedicated environment, rather than a multi-tenanted one, so they are not sharing the infrastructure with anyone else,” says Morris. “We offer the highest level of security. AWS is our main partner, though we use some Azure, too, and part of our regulatory compliance process is to give banks a clear line of sight with third parties to prove that they have some control over that relationship. “The security part is very important,” he adds. “Clients want penetration testing and everything else to ensure security, and we are helping clients show the due diligence process to regulators.”
Build a better business proposition Cost, scalability, security, speed and service are all key components in SmartStream’s managed service, but it addresses other pressing issues for banks. “Banks may want to reduce concentration risk of having the processes in one centre and managed services helps them to do that,” says Morris. “It exits them from worrying about data centres and technical support because we are running the technology.” “When you walk down the high street, you see lots of jobs being offered because there is a global labour shortage, and we are seeing huge pay rises in India, for example, for people to move to new jobs,” adds Smith. “Some big banks are even offering signing bonuses for graduates. For me, that means labour costs are going through the roof for banks, and I can generate a pipeline of business because I can take that challenge away.”
Managed services have become the main engine for growth at SmartStream, as it addresses many concerns its banking clients have. The company is all about anticipating customer needs and providing solutions. Managed services brings that core philosophy to life. ●
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