DEBUG: PAGE=domain, TITLE=NelsonHall Blog,ID=1469,TEMPLATE=blog
toggle expanded view
  • NelsonHall Blog

    We publish lots of information and analyst insights on our blogs. Here you can find the aggregated posts across all NelsonHall program blogs and much more.

    explore
  • Events & Webinars

    Keep up to date regarding some of the many upcoming events that NelsonHall participates in and also runs.

    Take the opportunity to join/attend in order to meet and discover live what makes NelsonHall a leading analyst firm in the industry.

    explore

Subscribe to blogs & alerts:

manage email alerts using the form below, in order to be notified via email whenever we publish new content:

Search research content:

action=something else...array(7) { ["program"]=> int(-1) ["analyst"]=> int(-1) ["industry"]=> int(-1) ["serviceline"]=> int(-1) ["vendor"]=> int(-1) ["country"]=> int(-1) ["application"]=> int(-1) } array(0) { }
from:
until:

Access our analyst expertise:

Only NelsonHall clients who are logged in have access to our analysts and advisors for their expert advice and opinion.

To find out more about how NelsonHall's analysts and sourcing advisors can assist you with your strategy and engagements, please contact our sales department here.

Avaloq’s Emerging Technology Strategy to Enable Faster Banking Transformation

 

I recently attended the Avaloq Community Conference in Zurich, where the key themes were cloud delivery, operations ecosystem, open banking platforms, and combined ITS/BPS engagements. Here I take a quick look at Avaloq’s strategy in each of these areas.

Cloud delivery

Avaloq recently announced a partnership with IBM for a global private cloud delivery capability for customer environments. IBM will be providing delivery of infrastructure as a service (IaaS) in all relevant countries based on a global standard blueprint, adapted by geography to regulatory requirements and security threats.

As Avaloq expands into new geographies with existing clients, its cloud delivery services will grow faster than its other services, eventually shifting most of its services into a cloud delivery environment. Cloud delivery provides the client with the benefit of allowing cost to match revenues in line with volume swings. In the long run, Avaloq will shift its internal delivery capabilities entirely to the cloud, leaving it with a completely virtual delivery center operations environment.

Operations ecosystem

Avaloq’s operations ecosystem includes ~90 external software vendors, up from ~60 last year. Avaloq is now investing directly in emerging technology vendors, such as the recently announced investment in Metaco, a vendor of blockchain cryptographic solutions. Avaloq acquired a 10% ownership, with other recent investors including Swiss Post, SwissCom, and SICPA.

Given Avaloq’s record of investing in emerging technology vendors with partners, we expect that they may formalize this soon as a venture capital consortium. 

Open banking platforms

Avaloq is addressing the open banking platform regulations with a big initiative to build APIs. Avaloq has delivered the first open REST API, which is a PSD2-compliant API based on the U.K. Open Banking specification. In the second half of 2018, Avaloq will be rolling out a set of 150 API end-points to cover functionality in 13 business areas. This will be followed by a second wave of API end-points in 2019. Using Avaloq’s APIs, clients can develop custom functionality more rapidly.

ITS/BPS services

Avaloq started as a software vendor, but expanded its offerings to deliver combined IT services and business process services (ITS/BPS) to meet their clients’ growing demand for comprehensive operations support to reduce (and enable variable) costs.

A key focus for the conference was RPA. Twenty percent of Avaloq’s clients use RPA in their operations. However, 50% of their clients are only in the evaluation phase. Avaloq uses RPA in three use cases:

  • Automating manual processes: typically deployed where employees currently perform highly repetitive processes, sourcing data from multiple systems. Here, RPA is expected to deliver automation of 90% of processes overall
  • Supporting repair processes (e.g. reconciliation): fixing failed automated processes (that are primarily manual). Applied to sub-processes, RPA raises overall process efficiency and, with machine learning included, eliminates many repetitive repairs for individual accounts until CIF files are updated to enable STP
  • Testing new services: operations are continuously improving, and RPA is used to facilitate efficient execution without the investment needed to fully automate a process which will be adjusted prior to final adoption.  

Avaloq has applied RPA to 10 processes, with an anticipated 20 more processes added by year end. Avaloq’s RPA solutions are used in its BPaaS services and to manage combined third-party/Avaloq environments.

The broader picture

The European and APAC markets are adopting platform transformation initiatives faster than the American markets due to compliance requirements in Europe and competitive challenges in APAC. Avaloq is seizing the opportunity with an aggressive partnering and open platform strategy. It is executing quickly, as its growth in APIs, RPA, and partners in the past twelve months demonstrates.

Avaloq will also need to be able to manage failed partnerships to succeed. Its senior management has the entrepreneurial attitude to recover from failed experiments, but it remains to be seen if its conservative clients and its own organization will easily adapt to a trial and error strategy. The fact is, the global financial services industry is being forced to move in this direction, so the successful organizations will be the ones who adopt a willingness to experiment early and enthusiastically.

 

No comments yet.

Post a comment to this article:

close