Fintech, no longer a buzzword but an established term with new financial start-ups springing up around the world. They are all digital, built from scratch leaving to one side all the legacy processes and reinventing a new way to do things. For consumers, typically a mobile app interface is the main channel and more importantly, all engagements are instant – view now, pay now, transfer now, etc. The financial industry is changing rapidly and new players are making a big impact. Gone are the days of writing cheques and waiting days for them to clear, you now ping money instantly to others using an app.
How Does Fintech Compare With Our Own Telco Sector?
There are a lot of parallels and I will highlight a few examples but “Teltech” is hardly a word that most people use or even understand. Is our sector falling behind other industries as operators desperately yearn for the good old days of high roaming charges and expensive overages?
In the UK, the new Open Banking Regulations have just kicked in — which essentially forces banking institutions to open up their data and share with 3rd parties. No longer do I breach my bank’s Terms & Conditions if I give my credentials to an authorised 3rd party to allow them to process my data. This is enabling a host of new ventures that make use of my data and add value. There have been lots of complaints from the legacy banks but grudgingly they have complied. Now, even big banks are jumping on the bandwagon and creating digital enterprises, for example Yolt from the Dutch bank ING or the HSBC partnership with Bud.
So How Has Fintech Progressed?
A decade ago, it was common to wait for a monthly statement to see your financial balances. Most take for granted now that they can view their transactions and see how much money they have at any time via an app. Open Banking takes this a step further, banks can now expose this data through API’s to 3rd parties. For example, this could be an aggregator app that merges accounts together onto a single dashboard or possibly a service that analyses your spending and suggests ways to save money.
I see it as a lifesaver for big banks. I personally find my own bank’s web interface frustratingly slow and limited but I’m kind of tied to it with my mortgage. Now with Open Banking, I can easily link my account to an aggregator, for example Money Hub, to analyse all my transactions from all my accounts through a single third-party UI.
Now imagine this transposed to the Telco industry. If we had real-time Telco APIs, I could aggregate my different accounts through a single dashboard. Rather than a threat to individual operators, it could encourage me not to churn as instead I could link and view my personal and family accounts through a single aggregator. In essence, I get to use a front end that I’m happy with rather than the standard UI from my operator.
Extending this idea further, it could allow transactions to take place across disparate operator networks, for example gifting 1GB data from one network to another. From an operator’s perspective, it’s a scary thought that will no doubt send them running to regulators but it is exactly this kind of openness and innovation that will keep our sector relevant in the digital era.
A World Beyond Fintech and Banking
One Fintech start-up that is now an invaluable part of my life is Revolut. It provides a new way to instantly exchange and hold money across multiple currencies, all at market rates. When I transfer money in Revolut, the interface is minimalist and extremely simple to use but completely real-time — showing the actual market rate. This can only be achieved by designing new systems that link the subscriber directly with the core banking infrastructure. I often find myself hovering over the confirm button to see if I can maximize the exchange rate as a sort of gamification! This is obviously completely different to the old process of calling the bank which would submit a currency order (at a very wide buy / sell spread of course) and confirm back to me hours later. In Teltech this could be an asset exchange between data and voice minutes carried out instantly while watching a movie on my phone or it could be the purchase of roaming minutes on a secondary market while travelling abroad.
Another feature with Revolut is the ability to create virtual cards that can be used in a controlled way. For example, I may want a specific card for online purchases so I don’t publish my main details or create virtual one-off cards for any given scenario. Transposing this to Telco, you could see a scenario where you might want to pick a new virtual number that you give to your friends or you could create a business number that you publish on a website but switch it off after office hours. Nothing really new in terms of underlying technology but it’s never been made simple for a subscriber to control this themselves without, that is, waiting in a call center queue for 30+ minutes and then escalating a trouble ticket to a 2nd level support technician to fix the network settings in the core network! Wouldn’t it be nice if you could just go to a digital marketplace within an app and buy the extra number which is immediately available for use? Similarly, suspending the number or setting policy rules could be a simple finger swipe on the phone.
All these examples rely on the openness and real-time nature of the API provided by the core systems. Traditional approaches have relied on intermediary systems which replicate and cache data from core sources to make it readily available to upstream channels. Of course, this introduces delays and an increased risk of viewing incorrect or out of date information not to mention the reconciliation issues of data duplication.
Digital-First, Purpose-Built Technology
All this brings me to the MATRIXX technology. Our patented transaction processing engine has several features that allow exactly this kind of open API from the core network to the external world. Firstly, the non-blocking database allows both network traffic and API queries / updates to take place simultaneously without impacting latency. There is no need to cache information or transfer to a separate reporting database as all sources process the same data which is atomically replicated at the transaction level to provide high availability and redundancy. This is important as traditional lock-based systems end up creating latency spikes when multiple systems want to access the same data as each system queues to access the resources. Not a great customer experience if you are trying to access a data balance for example but have to wait seconds and not milli-seconds.
Secondly, the transaction throughput has to support potentially thousands of resource interactions per second, as opening up an API to the wider world, you are creating a digital path directly into your core systems. Finally, the API needs to be easy to use, which today generally means a REST & JSON based interface. MATRIXX not only exposes all objects and functions through REST but it also provides a higher-level business API interface that is configurable to make open API interactions with a wider eco-system much easier to configure.
There are many parallels between Finance and Telco and an open API providing a digital path to the core system is shared across both markets. In the banking world, it’s been recognised that a new customer experience was only going to come through new technology. Let’s hope “Teltech” becomes as big as “Fintech” as it is only through innovation that the big operators will stay relevant.