Finastra’s Siobhan Byron on addressing financial inclusion, agility

In this exclusive interview with Gulf Business, Siobhan Byron, EVP – Universal Banking at Finastra delves into how the global fintech company is leveraging its open finance DNA to build a more inclusive, resilient, and sustainable global financial system.

Here, Byron discusses the evolving consumer demands for personalised services, especially in regions like the Middle East, where a young, tech-savvy population is driving significant changes.

She also sheds light on how Finastra navigates the rapidly changing technological landscape, particularly in the UAE, to help banks quickly adapt and thrive.

Tell us how Finastra leverages its ‘Finance is Open’ DNA to address the pressing issues of financial exclusion, enhance financial resilience, and foster sustainability initiatives.

When it comes to building a global financial system that is inclusive, resilient, and sustainable, challenges remain. For example, we still have large unbanked or underbanked populations around the world. Black swan events, including extreme weather in the Middle East and elsewhere, have become more frequent. Plus, trillions of dollars continue to be poured into fossil fuels, and institutions face increasing pressures to reduce their environmental footprint while helping their customers do the same.

At Finastra, we believe that finance is open, and this enables us to help tackle these challenges. A good example is Finastra Essence, our digital banking platform, which combines rich, broad, and deep banking functionality with advanced technology, and supports seamless integrations with our vast fintech ecosystem through open APIs. Through this holistic offering, we’re helping institutions to equalise finance, enabling more people to access banking services, whether in the poorer sections of society or those with unique needs not served by traditional, monolithic banking. Additionally, banks can increase agility, make more informed decisions, effectively manage risks, and evolve quickly with change.

We’re also supporting sustainability initiatives. With our solutions, banks can, for example, extend their lending practices to cover items such as electric vehicles or solar panels and offer personalised suggestions about the best products, for which grants are available and recommended installers. By enabling BaaS and embedded finance, we can also help banks embed these loans at the point of sale to create seamless user journeys.

What changes are we seeing in consumer demands, in terms of access to instant and personalised services?

We live in an age where everything is in demand. Whether finding a film to watch, ordering food to our doorsteps, connecting with others via social media or ordering transport, we have access to a range of services and content at our fingertips. When combined with increasing time pressures in our daily lives, the result is a much lower tolerance for friction in user journeys, which permeates banking too. Consumer demand for instant, technology-driven, and personalised financial services has never been greater.

This is evident around the world, particularly in the Middle East, which has a young population and one of the highest rates of smartphone penetration worldwide. The appetite for on-demand, digital services is reflected in recent payment trends. In the UAE, for example, noncash payments were estimated to account for 73 per cent of the total transaction volume in 2023, up from just 39 per cent in 2018.

Consumers also expect services that are tailored for them, factoring in individual values or needs related to their financial situation or education. Importantly, they expect them to be delivered via the channels that they prefer, whether that’s through an app or embedded within another user journey that the bank does not own.

Additionally, how does Finastra navigate the rapidly changing technological landscape in the UAE to assist banks in adapting to personalised financial services quickly?

The UAE is home to a thriving technology and fintech environment, fueled by initiatives such as Dubai Vision 2030. In fact, the UAE fintech assets under management value is expected to grow from $3.16bn in 2024 to $5.71bn by 2029, at a CAGR of 12.56 per cent.

While technology has always been a major component of financial services, the pace of innovation and change that we’re seeing today is both a big opportunity for banks and a major challenge. If they move too quickly or with the wrong strategy, they could be faced with increased operational risks and decreased customer retention.

As banking is sophisticated and evolving rapidly, institutions need a core banking solution that combines rich, broad, and deep banking functionality with advanced technology. A solution that has the banking capabilities built-in, is ready to deploy immediately and has the architecture needed for a digital world. A solution that can rapidly plug and unplug apps from ecosystem partners, bringing new capabilities online fast. And this is what we’re providing to banks.

Whether it’s cashless payments, delivering services on the platforms or channels consumers prefer, or providing services that align with values – such as sustainability or Islamic finance – our solutions and open ecosystem ensure that banks can adapt quickly and securely, meaning they can continue to offer the personalised services that matter most to their customers.

Could you elaborate on the advantages of the ‘symbiosis’ approach in banking transformation?

Costly, complex, unwieldy, fragile systems can hinder rather than propel progress. What’s more, these systems can prevent banks from being able to adapt quickly to new demands, whether from their customers, the industry, regulators or because of a turbulent macroeconomic environment.
Historically, retail banks have employed a “rip and replace” strategy – a high-profile, high-stakes digital transformation approach. This involves replacing existing core banking systems with new, cutting-edge solutions. While the intent is to enable innovation and enhance customer experiences, the execution can be risky due to high costs, prolonged timelines, and the potential to disrupt critical banking operations. It can and does work, especially when executed by experts, but it is risky.

A much better way to adapt, which is increasingly favoured by our customers, is an approach called Symbiosis. In this strategy, a next-generation core banking system is deployed alongside an institution’s existing infrastructure, allowing them to retain the benefits of their established systems while strategically embracing the future. While minimising disruption, banks can rapidly introduce new capabilities without disturbing the intricate web of legacy systems. This approach aligns with the ethos of being agile, responsive and adaptive.

Tell us about the role of open ecosystems, partnerships, and cutting-edge technologies such as cloud, SaaS and AI in accelerating innovation.

For any institution, understanding where your expertise lies versus where third parties can add value is critical because it is often not viable to embrace change while managing risks alone. By tapping into open ecosystems and securing the right partnerships, banks can seamlessly implement the latest technologies, launch new offerings, and strengthen their products and services to quickly evolve with customer demands.

Cloud-first solutions enable seamless ecosystem participation, while also strengthening agility and scalability for banks. SaaS can bring further benefits in these areas, while also reducing costs and time to market. However, it’s important to note that choice is key. Finastra operates cloud-first, but if a customer wants to stay on-premises, or the regulator prefers it, we support that too.

Another technology that is driving innovation is AI, and particularly Generative AI (Gen AI) which is showing enormous potential in several areas. For example, it is being used to better detect fraud, including creating scenarios for new types of fraud we haven’t seen before. It is being used to provide 24/7 chatbots or in-app capabilities that give consumers advice on the services best suited for them. It’s also enabling banks to provide their customers with intuitive suggestions on how they can optimise their finances based on their current situation.

With the increasing importance of data analytics in decision-making, how is Finastra leveraging big data and advanced analytics to provide valuable insights to its clients and improve their operational efficiency?

Data and advanced analytics play a critical role in helping institutions understand their customers’ needs, what’s working well and where improvements need to be made to make business and product decisions. They can also analyse a customer’s data to provide them with greater insights into their financial situation and the best actions they should take. However, while banks are sitting on vast amounts of data, being able to use that data in a meaningful way can be challenging.

With built-in analytics and technologies such as machine learning and artificial intelligence (AI), our solutions and wider ecosystem enable banks to unlock this data, analyse it and both receive and provide actionable insights to make more informed decisions. They can, for example, analyse performance, enhance customer experiences, reveal where opportunities lie or see where they can reduce costs.

With data and technologies such as Gen AI, banks can also implement 24/7 assistants that assess a person’s financial situation and guide the best savings, loan or investment products for them.