Simplifying basic banking services drives innovation

In the world of open banking and open finance, core banking systems are no longer just about the biggest banks in the world.

On the one hand, to create the kind of innovative financial products that FinTech startups are known for, they need to be able to access and engage with core systems. On the other hand, in the age of open APIs, data must be able to flow between financial institutions (FIs) without compromising security.

In other words, the modern bank needs systems that are both robust and flexible.

It is in the context of this delicate balance that SAP Fioneer comes into play. Since breaking away from the world’s third-largest software developer in 2021, the young cloud-focused unit has strived to combine the security and stability of SAP’s technology stack with some of the agility and flexibility of SAP. a FinTech.

In a recent interview with PYMNTS, Charlie Platt, President EMEA at SAP Fioneer, called the company’s robust yet flexible solution “a faster, more innovative layer on top of that great stability” for its customers – some of the most major banks in the world. to disruptive startups – as the new company establishes itself as a key player in the global banking ecosystem.

Related: Cloud Banking Takes Center Stage at London Tech Week

Cloud for banking platform

In May, global automated company PayTech COMO, which provides multi-currency payment services to customers at the intersection of banking, finance and commerce, announced that it had selected the Cloud for Banking (C4B) application of SAP Fioneer to strengthen its real-time transaction functionality and reduce costs for its customers.

The move shows how cloud banking platforms like SAP Fioneer are helping industry players and treasury departments retain the security of centralized systems, while migrating to a distributed architecture.

Bankers are also increasingly recognizing that if global clearing networks are to meet the growing expectation of real-time payments at the scale required, clearing agencies will need to take advantage of faster connections from cloud solutions, reduced deployment times and an increased ability to adapt to the shifting plates of financial tectonics.

Read more: The Role of a Modern Clearing Bank in Scaling Global Payments

Related News: Bank of London to integrate SAP Fioneer’s Cloud for Banking platform

Against this backdrop, the Bank of London recently announced that it would be integrating SAP Fioneer’s C4B application into its API, setting the stage for a planned launch of the new clearinghouse on the global stage in October.

The expected clearing solution uses a combination of Bank of London’s patented technologies alongside SAP Fioneer’s hyper-scalable cloud banking platform, providing “the fastest connection to payment systems in the market”, said the bank in a press release.

Emerging market potential

With faster payments to be won, both domestically and cross-border, the integration of cloud platforms such as C4B into the global payments infrastructure presents a huge opportunity for emerging markets.

Report: 93% of FIs say integrated financing streamlines cross-border business payment flows

As Platt told PYMNTS, emerging markets like Southern Africa, where SAP Fioneer is integrating several existing SAP customers, benefit from an “ability to change faster… ‘Western European or more established’.

However, the dynamics of emerging markets have traditionally prevented smaller banks and corporations from integrating into continental and global payment systems in the same way that large institutions can.

Platt cites the example of development banks, which typically handle smaller volumes of transactions but are critical to meeting the economic needs of emerging markets.

To address this issue, he said COMO and other cloud-oriented companies emerging from developed markets and seeing opportunity in emerging markets will increasingly focus their attention on the challenges these markets face.

Overall, he said, as is often the case in large banking platforms or large insurance platforms, change is difficult and their goal is to try to simplify their infrastructures as much as possible. to enable future innovation much faster.

“We call it the clean core,” he said. “[That is] by separating some of the complexity that currently sits at the core and moving that to the enterprise level so that we can bring innovation and real-time capability much faster.

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NEW PYMNTS DATA: HOW UTILITIES AND CONSUMER FINANCE COMPANIES CAN IMPROVE THE BILL PAYMENT EXPERIENCE

About: More than half of utilities and consumer finance companies have the ability to digitally process all monthly bill payments. The kicker? Only 12% of them do. The Digital Payments Edge, a collaboration between PYMNTS and ACI Worldwide, surveyed 207 billing and collections professionals at these companies to find out why going digital remains elusive.