Our guest in this issue of the “Internal Voice” is Russell Taylor, Chief Commercial Officer at Software Group. We asked Russell about Software Group’s business, plans for growth and also for some pertinent financial industry insights.
Hi Russell, we are at the end of 2017, could you please share Software Group’s highlights for this year?
It has been a busy year and highlighting Software Group successes we received a number of recognitions. We were listed among the top companies in the Inc. 5000 Europe 2017 ranking. The magazine recognizes the fastest-growing private companies of all sizes for the last three years. Software Group was also included in the 2017 Deloitte Fast 500 rankings for EMEA. Тhis Technology Fast 500 award rates technology companies in the region, based on their growth for the past 4 years. We also received 3rd place at the Forbes Business Awards Bulgaria 2017 in the highly competitive category “Successful Business Development”. Capital and ICT Media also recognized Software Group among the best in business in 2017 in their annual rankings.
In October, Software Group, as one of the key technology contributor to the Level One Project, supported the Bill and Melinda Gates Foundation in the launch of Mojaloop, an open-source payment platform that can help expand access to safe, affordable digital financial services for the poor. It allows interconnectivity between customers, merchants, banks and other financial providers integral to a country’s economy.
Other notable milestones in 2017 include the go-live of the Kaya Payment Platform, a cloud-based payment service, launched in cooperation with the National Confederation of Cooperatives (NATCCO), Asian Confederation of Credit Unions (ACCU) and the Philippine Federation of Credit Cooperatives (PFCCO-Visayas). As the demand for SaaS solutions is increasing, we are proud to be able to offer the flexibility that this market needs. In addition, we are pleased to add many new logos to the Software Group family including Alignet – an online payment provider in Peru, Sandah – an MFI, based in Egypt, Botswana post and many others.
Lastly, we established new services entity, SG Services, which will focus primarily on core banking implementations, building on and expanding our existing Temenos T24 Services business. This is a natural fit to our business and acts as feeder for Software Group’s solutions.
Which are the major projects of the company in 2017?
There are many, and all are important but I would like to highlight two of them – The Kaya Payment Platform and Alignet. Together with Temenos and ACCU, we supported NATCCO in launching the Kaya Payment Platform for the credit unions in the Philippines. The project enables the credit unions to expand the range of services available to their individual members, generate additional revenue and increase member share value. The initiative is part of the regional strategy of ACCU to modernize the credit union sector and develop common payment platforms for the credit unions. The plan is to onboard 50 credit unions by April 2018.
The other is Alignet, a project that will improve not only the company`s customer service, but also will decrease the time to market, and provide connectivity between the company and card providers.
How do you read the current market and what are your thoughts for the near future?
There are still 2.5 billion people in the world who do not have access to financial services. This creates a vast demand for our services as banks, microfinance organizations, credit unions, telcos, fintechs and payment companies race to provide services to both the unbanked and underserved markets. Unbanked is not an emerging market phenomena – in the US alone they estimate that there are more than 10 Million unbanked adults.
Even in developed markets there is a vast number of underserved customers, this is a massive unrealized opportunity for banks. Digital delivery channels are now prevalent in the financially underserved market, and while the market need is not saturated, the amount of solutions available is growing. In many cases, this is a “me too” market, making it very difficult to compete on a “feature function price”.
The market dynamic has changed. Digitization and access to mobile telephony has provided access to a previously difficult to reach customer base, and this challenges the current microfinance model, by enabling non-traditional players to offer products, services and convenience to this underserved market space:
- Traditional retail banks are under increased pressure to meet capital adequacy and find new clients. They see our technology as a key to engaging with this previously underserved market, and are attracted by the market potential.
- For Fintech with strong financial backing and cool technology platforms.
- For Telcos that really own the digital consumer, and are pursuing new business models
Traditional Мicrofinance organizations need to transform their business models to remain competitive in this new environment, further impacted by a lack of donor funding as these organizations look to solve problems elsewhere. This will result in a consolidation of the market as MFIs need to drive efficiencies in order to remain competitive.
Banking is one of the main sectors of the company`s focus. How does Software Group plan to strengthen their presence in this target segment and what is the strategic focus for 2018?
Software Group will continue to act as a trusted advisor and a partner for banks that are eager to extend their reach to underserved or unbanked communities, as an expert in digitalization and alternate delivery channels, for both emerging and developed markets.
Also, and importantly our next generation of UT Route, our new DigiWave – Enterprise Integration Platform – will allow us to provide a key technology component to many banks on both well-serviced and emerging markets that are facing challenges with increased competition from non-traditional players, and changing regulation (eg. PSD2). The platform will also enable agility in a cost-efficient manner.
Finally, the banking landscape is changing rapidly – banks need to innovate to remain relevant and Software Group is here to help.