It is cited that 2021 is to be the long-awaited year in which the financial services industry will be transformed by Open Finance – democratising access to financial services by consumers and allowing them total control of their financial data. As well as many SMEs and corporates being keen users of FinTech, UK citizens are becoming more digitally active – with 71 per cent using the services of at least one FinTech company. The UK is proving to be a dominant force in the sector, representing 10 per cent of global market share and £11bn in revenue, according to an Ernst & Young report in 2020.
So, as Open Finance gathers pace, there is a real opportunity for FinTech firms to work with financial services institutions to help deliver the digital ‘big bang’. This is supported by government and regulators, which are committed to accelerating FinTech adoption and growth, in recognition of it as a permanent technological revolution, not just a niche within financial services. To deliver better financial outcomes to UK consumers and SMEs, collaboration between FinTechs and other financial organisations and institutions must be encouraged – and that is what the government’s recently announced FinTech Strategic Review aims to do. Within that, the Open Finance initiative is a significant step – with the aim of linking financial players to join forces in creating innovative financial products, services and applications that puts choice and control back into the hands of the consumer.
In order to capitalise on this, FinTech firms need to have a robust business architecture in place. Having the right Enterprise Resource Planning (ERP) solution provides a strong foundation that will afford them the agility to scale up in accordance with the growing opportunity pool.
Regulatory compliance and security remain a priority
The financial services world is encased in regulation, and compliance has always been a major priority – but never more so than in this rapidly evolving landscape. As Open Finance progresses, it will bring to the table more data points, and so GDPR compliance will be a major consideration and requirement. Using a cloud-based ERP solution such as Oracle NetSuite facilitates compliance by replacing data stored in disparate systems across a variety of departments with a single system giving one version of the truth. A 360-degree view of the business is provided, where processes can be easily tracked and compliance-checked.
The Oracle NetSuite solution also offers protection from data breaches or cyber attacks. This is a pertinent issue, as recent research highlighted cyber security and privacy of data as major concern for nearly 80 per cent of FinTechs and banks surveyed. The requirement to manage the need for data accuracy and security must be balanced against transparency and open data sharing that will be required to facilitate successful Open Finance. So, having a robust system that offers heightened security is essential in this arena.
Automation of time-consuming processes that can hinder growth
Rapid evolution requires agility, and operating a business with disparate systems, business processes that aren’t connected or aligned and manually entering data will not enable the speed needed to keep up in this competitive and fast-moving market. Using a system such as Oracle NetSuite provides a scalable solution that automates time-consuming manual processes and consolidates operations, leading to efficiencies that promote growth. From automating financial statements such as balance sheets, income and cash flow, to tracking, analysing and projecting performance and budgets, being able to access real-time information on the key financials of the business at any time is a huge advantage in an increasingly competitive market.
Oracle NetSuite is cloud-based – which is aligned with many FinTech firms who operate in the cloud and are aware of the benefits. Alongside simple implementation and reduced maintenance costs, the two updates provided each year by NetSuite offer a scalable and future-proof business architecture – always with the latest features. As the industry surges at pace towards technological advancement, this will be a key consideration in staying ahead of the curve, and the evolving expectations and demands of consumers and businesses wanting better choice and control of their data and financial functionality.
Digital transformation has been accelerated in many sectors by the pandemic at a pace that could never have been achieved in any other way. It can present a daunting prospect as the quest to catch-up or stay ahead is a necessity, however, with the right solution in place and the right implementation support, FinTechs everywhere can seize the huge opportunity that exists right now around the Open Finance movement.
To find out more about why NetSuite is the number one cloud business software suite for the FinTech industry, and how our experienced team can help with implementation of such a system, get in touch.
We’re also happy to discuss the types of solutions we’ve implemented for customers in this industry – such as Onfido, TheFinTech50 number one firm for the second year running – and you can browse our success stories. Click here to learn how OpenPayd selected us to implement NetSuite to achieve financial automation.