BlueOptima on the challenges of disruptive fintech

By Tamsin Oxford
“The question that banks have to constantly ask themselves today is – how do we become more agile and adept at dealing with the challenges that fint...

“The question that banks have to constantly ask themselves today is – how do we become more agile and adept at dealing with the challenges that fintech presents?” says Jason Rolles, CEO of BlueOptima. “The answer lies in enhancing the operational efficiency and effectiveness of software development operations and retaining the revenue opportunities that support them.”

The market has been fundamentally disrupted by the rise of the fintech. Software engineers are branching out and creating solutions that are designed to neatly solve holes in the market, and they are taking away significant revenue opportunities from the banks. To resolve this, the sector needs to find new ways of becoming operationally effective in the realm of software development, to shed the skin of legacy and lumbering complexity in favour of agility and capability.

“It doesn’t take many engineers to develop a killer product or proposition and banks have thousands of these engineers working for them already,” says Rolles. “They are in the depths of the institution, tied up in maintaining legacy systems. Today, the term ‘legacy system’ has a disparaging ring to it, but the reality is that these systems are holding up the financial infrastructure of the globe. They are the pillars of the finance system, and those who maintain them are delivering incremental change across massive infrastructure.”

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Software engineers caught up on this treadmill often end up filling their days managing and maintaining these systems and it is easy for them to get lost. The challenge is to hold onto the talent that understands the business without losing the ability to keep the system running. What BlueOptima has done is bring insight into how these software development resources are being used and their levels of efficiency to the attention of the decision maker and executive. Efficiencies and capacities can be meaningfully interpreted to allow for the organisation to disperse resources more effectively so talent can focus on disruptive new technologies and ideas.

“Banks gain access to the information they need to make relevant structural changes,” adds Rolles. “For example, they can see where they need less people to maintain an enhancement stream on an existing system and they can then take that capacity and focus on a new blockchain technology or a feature on a mobile app, or something equally important.”

More than just an idea

It is no longer sustainable for the financial institution to just focus on maintaining the status quo, not anymore.

“Banks are inevitably impacted by innovation in the financial services space and need ways of becoming more adept at wielding their software capabilities,” explains Rolles. “It is essential that they identify where they can find inefficiencies and free up capacity. Our goal is to help organisations identify these high-powered teams and individuals so they can push their resources in the right direction.”

Rolles is quick to add that these teams need free rein to innovate and exhibit excellence in engineering because these are the qualities that the fintech startups possess. If a bank is going to capitalise on an idea or technological innovation, it will be one that has emerged from these teams.

That said, a fresh challenge emerges alongside these ideas. Given the current funding environment and the technology startup ecosystems that are sprouting up across the globe, it is unlikely that many of these are coming to life inside a bank. Many fintech startups have come from individuals that have worked in the banks or the subsidiaries of banks and have been players in the financial services sector. They come out of these organisations to create their own spaces where they feel comfortable and inspired. It could be that they found the organisation stifling or that their talent wasn’t recognised and banks need to pay attention or these individuals will simply leave.

“It is crucial to identify the top talent in the business and to give them the resources they need to make the impact they want,” says Rolles.

The data key

As with almost everything today, data is the golden key that unlocks the doors to success. It is data that forms the backbone of what BlueOptima offers and allows for it to engage with the business effectively.

“We prevent a lot of the arguments that surround investment into high-performance software teams and disruptive innovation by using hard facts and cold data,” says Rolles. “We plug into the systems, we analyse the data and we provide irrefutable data points around what good looks like in an organisation. We showcase data round activity, operations and risk. Until now, technology has been perceived as the plumbing of the organisation rather than the driver of marketshare and innovation – and for the bank to thrive, it has to change this mindset.”

BlueOptima uses the data that already exists in the organisation and analyses it over time to quantify output. The results then allow for the bank to determine how productive an engineer is and gives the banks the space to open up conversations around knowledge, understanding and skills. It also provides the banks with the insight needed to understand the quality of what has been delivered on an objective level.

“The technology market is reaching heady heights and is coalescing to create a period of great disruption for numerous industries and I believe that financial services are going to be one of the first,” concludes Rolles. “I think the pace is only going to increase and the whole fintech phenomenon is going to become even more dangerous and banks will take risks in acquisitions to stay ahead. However, just as banks have to be regulated, so will those fintech disruptors when they reach a certain level and here the banks will have an advantage. They already know how to manage the regulators, they are already compliant and this could see the tables turn.”

Perhaps the future will see the banks turn to the fintechs that shook their massive foundations and say ‘it’s time to sell, isn’t it? Oh, and I want you to give me a discount because the regulator is breathing down your neck and I’m the one who knows what to do next’.

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