Riding the Fifth Wave of Banking Technology

Schopp Attila from Hungary’s leading media publication itbusiness.hu spoke to Rajesh Saxena, CEO, iGCB

India-based Intellect Global Consumer Banking (iGCB) and OTP Bank, one of the leading commercial banking groups of Central and Eastern Europe (CEE) signed an agreement to introduce a cloud-based account management and lending system. We asked Rajesh Saxena, CEO of iGCB about the fifth wave of banking technology and how the Hungarian project will be delivered.

– Could you tell us some words about Intellect and iGCB?

– Intellect is a publicly listed company in India, with a global footprint. We have 270 plus customers across more than 60 countries. We’ve been in this business for close to 35 years and what is interesting about our company is that we only work in the financial services sector, so we are fully focused on this sector. Why is that important? Because when you are developing for the financial and banking industry, the domain knowledge is extremely important, right? And we have that deep domain knowledge helping us bring global best practices to the table.

– When and why has your interest turned to Europe and Hungary?

– A couple of years back, we identified Europe as an important strategic market for us. The reason is that we thought that our technology architecture is what the European banks need. European banks need to modernize, and we had the right technology, so we thought this is a good place for us to come. We’ve divided Europe into two parts. One is UK, and the other is the rest of Europe. So we have an office in UK and we are in the process of growing our office in Frankfurt. From a retail banking perspective, our key markets are the Nordic countries, Germany and some Eastern European countries, including Hungary.

Our business in Europe is growing rapidly. When we go and meet clients, the kind of technology that we have, the architecture that we have, and the domain experience that we bring in is a very interesting proposition  for most of the banks.

– What sized banks do you want to partner with? Are they all mid-sized regional banks, like OTP Bank?

– Not exactly. At Intellect, we have multiple products. Some of them, like our liquidity management system is targeted at global Tier 1 banks, the likes of Citibank, HSBC, Barclay’s. We also have solutions for national central banks. On the other hand, with our retail banking solution we are focused on larger regional players. And for them, we are a right sized company, neither too big, nor too small.

– You mentioned the technology that you have. I read your article in the International Banker about the fifth wave of banking technology. Can you elaborate a little bit on that? What is the fifth wave and how is it different from the previous waves?

– Let me first talk about the banks. What are the banks today looking for? Banks are looking to increase their addressable market and how they can do it is by creating a marketplace where they need to work with fintech players, partners, etc. So that has become very important from a bank perspective.

To be able to that from a technology point of view, banks need to have an open platform. In the previous waves of banking, the available platforms were legacy, closed platform. So a fifth generation platform is completely open. A good example of this is our eMACH.ai platform. It is microservices-based; built around APIs, so it is modular and easily extensible; natively built for and runs in the cloud; “headless”, i.e. it separates the user interface from the backend; and it contains artificial intelligence built-in.

So we are bringing into Europe a technology that helps banks to modernize and become efficient quickly; and we are bringing about 35 years of understanding how banking is done in various parts of the world. I think it’s a good combination.

– From that portfolio of microservices and cloud services, the individual banks can select and pick only the necessary pieces that they require and connect it to the existing pieces or the future pieces of systems that they are looking for?

– You are absolutely right. Today, with this architecture, the bank can pick and choose parts of the solutions. So for example, I may want to buy a pricing engine, I can take the pricing engine and connect it very easily to my other systems. These components can be purchased independently, they can be deployed independently and they can work independently. So the banks don’t have to choose a full platform yet they can address their gaps or pain points using our eMACH.ai based platform and its business components across core banking, asset and liabilities to support specific business needs also.

This becomes more and more important as banks feel the need to replace their existing monolithic core systems. But it is extremely hard to do it in one big swoop. With the components you can do it in many different ways, depending on your needs, starting with those components that you consider the most important. This is what we call progressive modernization.

– What is the scope of the partnership with OTP Bank? What products and solution you are providing for them?

– Right now we are looking at the full eMACH.ai based core retail banking solution, and for two countries, Hungary and Bulgaria. And over a period of time there may be opportunities to look at other countries. But right now the scope is for Hungary and Bulgaria and it’s the complete core banking solution.

– What is the time frame for the project, how do you plan to proceed?

– We have just signed the contract. We are going to work with the OTP team and the cloud provider, and have a joint program. We have some tentative dates, but right now I would say that we need to sit together and do a detailed plan and then we’ll follow that plan. From iGCB’s perspective, it’s a flagship deal. We are really looking forward to working with OTP Bank and delivering them the best solution, the best banking platform.

– Will there be an office for Intellect in Hungary or do you cooperate from a distance?

– We already have opened a company in Hungary. OTP Bank is such a large organization, a lot of work has to be done locally in Hungary. The delivery work will get done out of Hungary. Some parts of the project will be delivered from the London and Frankfurt office, and the “factory” is going to be in India. So it’s going to be a multiprong thing. But most of the delivery work will happen out of Hungary and we will be hiring a lot of people, both local and transferring some of our people from other parts of the world into Hungary. For this region of Europe Hungary is going to be our center of excellence. So all the people that we will hire and train and who will be employed in delivering for OTP Bank will be deployed in other projects later in the region.

Source: https://itbusiness.hu/english/fifth-wave-of-banking-technology/