Innovation: learning from the past, creating the future.

Written by

Rupert Booth

Published on

Insights

When the winds of change blow, some people build walls and others build windmills.

Your suspicions are correct; this is indeed an ancient Chinese proverb, and despite my having wheeled it out in an attempt to begin this piece in an interesting way, it is nonetheless a succinct and insightful quote, summing up beautifully the spirit and meaning of innovation. It is as relevant to us in the financial software industry as it is to windmill construction in the face of bad weather. In fact, more so. Technology was, as recently as the 1990s, the instrument of government, and the government was able to regulate its use, in turn using it to regulate the country and control the populace. In some despotic regimes this unfortunately remains the case, but generally, in the free world, technology advancement has accelerated at such pace that governments are overwhelmed by data they cannot process quickly enough. In the early 21st century, the government manages its country but no longer leads it, unable to innovate, leaving the important decisions in the hands of the free market.

What does this have to do with us? Quite a lot actually, since being able to innovate in a technological world means being at the forefront of, for better or worse, societal advancement. In the banking world, that has broad implications when so much comes under scrutiny and so much data needs to be transferred, gathered, re-homed, made sense of and the value extracted. In truth, turning the data into intelligence.

As data farmers, we must ensure that the banks that we serve get what they need in terms of an intelligent solution, even if they don’t know that they need it, employing the creative process of conceiving that solution, and then innovating in the creation of it. Building upon what’s already there is a driver of this; what already exists may be specialist, but if a specialist application such as MYRIAD stayed specialist, we would come to a dead stop pretty quickly as our target market shrank.

It is vital, therefore, that we take on board the emerging and perceived industry developments, workshopping to craft the platform to serve new areas of financial service, enhancing it to widen its existing capabilities and constantly applying fresh thinking in the pursuit of additional functionality. We can only do this because we have what we need to start with; we are leveraging what we have as a solution to help us re-direct our thinking and apply it to achieve a new, desired result.

This attitude is a solid foundation upon which to base development; using an established, robust and reliable platform, modifying and adding to it to match and anticipate market demand, becoming cutting-edge in the process. As financial institutions transform their thinking to stay compliant, reactive and competitive, so must we – even before they do. The difference is, we have to be proactive and innovative as well; no idea is so outlandish that it should not be considered.

Applying our traditional approach to the market shapes how we develop our products – then approach the market once again. The next generation of any platform must present new and effective functionality that clients will probably not have considered as desirable, which it suddenly becomes when presented to them.

MYRIAD ‘Next Gen’ is the manifestation of all that I have said so far: a rolling process both of enhancement of existing capabilities and introduction of reactive, and more importantly, proactive elements. As we establish APIs between our platform and the client’s own, read and process unstructured data, expand ICSD invoice reconciliation capabilities, introduce revolutionary network visualisation and overhaul and upgrade advanced reporting and task management workflow, the client receives a refreshed and progressive product. The platform is the same, but its value to the User is considerably raised in a continuing cycle of revitalisation over years.

We constantly encounter prospective and existing clients who need us to go the extra mile to give them and offer them what they want, and we relish that challenge; it fosters the furtherance of knowledge, boosts our drive to perform and for our own part, gets us to market. We know that we can get operations and supplier management departments further, faster; to do more with less; to save money and crucially, to manage risk. MYRIAD has done this through constant innovation since day one and it is a continual process that persists through change. We have a long horizon in view as to where we are going, perennially anticipating needs and pushing for excellence.

When financial institutions implement measures to absorb industry legislation into working practice and strive to comply with regulation and recommendation, new product and service development is a key concern along with improved technological application. Many must accelerate their programmes to meet the effective deadlines and, naturally, the supporting technology has to accelerate with it. It means innovating current services to appeal to these firms to win business and to retain existing clients. The Digital Operational Resilience Act (DORA) is a particularly important concern at present as banks scramble to comply; it enters into force in Q1 next year and will become fully applicable in early 2025.

DORA’s clear objective is the improvement of the digital resiliency of the entire financial system. Almost every type of financial institution across the EU will be required to ensure that their suppliers and their suppliers’ security controls meet resilience standards. Suppliers, of course, means us. Our technology, our data handling and our security must be sufficiently robust as to withstand more intense scrutiny in the future as prospects and clients quickly perform gap analyses in order to comply and further shore up their resilience. Development of an Information Security Management System to ISO27001 Standard is a manifestation of forward-thinking to reassure clients that their data is safe and that their provider is audited strictly, internally and externally.

If a business is to stay ahead of the game, then it should introduce change to the market, challenge the status quo and shape the way the industry thinks, behaves and develops. The small matter of custody due diligence is always front of mind for the banks on either side of the custody chain, and progressive standardisation is always a big driver in the uptake of services.

The Association of Financial Markets in Europe (AFME) standard due diligence questionnaire is five years old and used widely. Despite the standard, there has been no universal mechanism that achieves a synergy between the various vendor platforms – until now. MYRIAD Group Technologies has developed its ‘Next Gen’ iteration of the CODUDE platform, providing an AFMEaligned utility housing the new excel-based questionnaire format. It offers seamless interoperability across all due diligence platforms, further standardising the procedure at the fundamental and initial stage. The due diligence environment for the buy-side and the sell-side is improved industry-wide as a result.

The increasingly complex demands and tightening rules imposed upon banks, asset managers and other financial institutions is why business technology providers, if they want to stay attractive to the industry, have to move with these requirements, which they must also properly research and understand. Their service must be developed in sync with the complex and shifting industry environment, providing compatible services which can be slotted into the existing gaps and hook up harmoniously with current proprietary operational systems. Such development at pace craves innovation, and this starts with questioning the existing order; if the product is good or if the potential is there, then build upon it; if it can be wrought from the same material, construct it; if it’s the best there is, make it better.

If you are possessed of a unique and relevant technological network solution with a highly respected client base, then it’s alright to feel positive about your progress. But it’s no good being satisfied with what you have – you’ll quickly become obsolete. This might be an obvious statement to any business owner, but it is particularly pertinent to the vendor of financial technology as the commercial landscapes of his or her customers constantly change and become more convoluted and exacting. We, as such a vendor, must accommodate the needs that these qualities engender, providing more choice, covering more ground, supporting the broader, deeper responsibilities of the executives within the industry we serve, striving to make a product more relevant, diverse and agile. This can only be achieved through the process of innovation; it’s nothing new – but it is more important now than ever before.