The time is now
31 Oct 2018
Haytham Kaddoura of SmartStream discusses why the company has waited until now to launch its Innovations Lab, which focuses on AI, blockchain and digital payment solutions
Image: Shutterstock
What is SmartStream currently working on?
We are currently concentrating on strengthening and adding to our core platforms, including our reconciliations and our cash and liquidity management solutions. We are also in the process of further expanding our Innovations Lab which spearheads our artificial intelligence (AI), blockchain and digital payment solutions.
How is technology affecting and disrupting the industry?
In many ways, the rise of digital payments is increasingly and rapidly shifting the dominance of the payment cycles away from traditional financial institutions to tech companies like Apple, PayPal, and Google as well as a host of other players that were never envisioned to be in this space even five years ago.
If you look at bitcoin or digital currencies and the rise of payments through predominantly mobile platforms such as WeChat with WePay, and similar platforms in Africa and Latin America, this shift has been transformational, and even though they have gained massive backing in their respective geographies, it has proven that this is a concept that it is bound to sweep across the globe. We are beginning to see it in the US as well as Europe and that’s why we have chosen now to introduce our digital payments solution.
What opportunities have you seen in the industry over the last 12 months?
There has been continued stress on strategic outsourcing by banks over the last few years in an effort to build efficiencies and realise cost economies. This overlapped with an increasing pressure to move increasingly strategic operations rather than generic functions, accompanied by a greater drive on operational transparency by regulators. Cumulatively these have acted as catalysts for our managed services offering whereby we uplift components of bank operations, particularly those related to our platforms, and in return provide for greater cost efficiency, reporting transparency, and high level of accuracy sought after by some of our global tier one clients.
While the above addressed discrete and tangible benefits, the industry continued its drive towards working more intelligently. We decided after witnessing all the clutter and confusion about AI and blockchain to wait it out. We realised there was going to have to be a culling that would separate the ‘wheat from the chaff’. Many people and companies were saying: ‘we have blockchain, we have AI’. We understood that some of those solutions were just simply visionary notions as opposed to any real demonstrable outcomes. In the beginning you had people going out there and saying ‘we’ve got a solution’, and it’s just two guys in a basement and it’s really not a solution, it may be a technology or the beginning stages of a technology but it may not have a real use or be perfected enough. Then there’s the next stage when the terminology begins to gain momentum and people start to jump on the bandwagon. That’s when you have companies already established in the marketplace rebranding or repurposing existing products to fit the new terminology.
We wanted to see where AI and blockchain were going before we entered into it because we have a name and a reputation which we wanted to uphold. Now, we think it is the time for us to get out there and do what we can uniquely do with our expertise and create solutions using this new technology that isn’t novel because of the technology itself but because that technology helps us deliver better results. We wanted to make sure people understood this is something few other companies are offering and that there is a value we can uniquely provide. That is an important distinction.
The market has matured somewhat and is now entering a shakeout period and we think people have a greater level of understanding of these new technologies and are more interested in hearing our message and understanding our value proposition. It is similar to the early days of the internet when no one could figure out how to monetise it and then after those companies without a viable product or business model left the marketplace the internet redefined itself and became a very different entity and medium for commerce.
For SmartStream this isn’t just talk, we have launched our Innovations Lab which is a purpose-built think tank that’s sole mission is to analyse and assess various AI and blockchain technologies, build our own solutions then turn them over to our technologists to productise them. We built our first centre in Vienna so we could avail ourselves of noted experts in the field including the head of the lab Andreas Burner, who is now serving as our chief innovations officer. We’re very happy with the reception our entry into the marketplace has received.
There have been many requests asking us to speak at various events, many existing customers have contacted us to learn more and we’ve actually received a lot of interest from companies that were aware of SmartStream but couldn’t use our existing suite of solutions. Now with digital payments and some of the advancements, we are making with blockchain and AI they have asked to meet with us to learn more.
Frankly, the reaction we’ve received has been somewhat of a surprise. We knew our entry would mean something and would capture a select audience but the appeal has been much wider than anticipated. We were invited by Swift to speak at this year’s Sibos in Sydney, about AI and blockchain and it was standing room only.
The key message is that experience is very important. The experience is quite significant and is important to gain the customer’s trust, particularly in the financial services industry. It is crucial to have a strong and stable background as they want a player they know they can rely on and is going to be there in the next ten years, as we done so over the last 30 years. We have six data scientists on board, working exclusively on finding new developments and the first is our digital payments solution. Experience, trust and employees with an unmatched skill set are unbeatable.
What are the biggest challenges in the industry? How is SmartStream rising to these challenges?
There are always challenges and naturally, in the finance space, they have continued. Financial institutions have to contend with more rules and regulations than ever before, the banks are in more countries than ever before and often these countries or regions have different regulations to contend with and all this has to be adhered to without spending more. The banks like any business want to do more with less, saving money while finding a way to make more money. Luckily, our solutions help with all of this. We streamline processes, provide greater visibility, and transparency and can do it all at a lower cost, freeing resources.
We also have a distinct advantage as a truly global company. We can spot trends, such as AI and payments, in one region, and immediately see how it transfers to other markets.
What is on SmartStream’s agenda for 2019?
Over the next couple of years, we will continue investing in the digital payments space to come up with new solutions. We will be working on delivering more AI and blockchain solutions to the industry and solidifying our leadership position in different domains, whether that is in reference data, utility data or different initiatives with blockchain and AI.
I am looking forward to some very exciting years ahead with new solutions and addressing the industry’s needs, as well as staying nimble so we can address any new requirements that may arise.
SmartStream is still growing by leaps and bounds. We are on target for our most profitable year ever, with record year-on-year growth. We are going to have more employees than ever before in the company’s history and this is while others are folding, looking at refinancing and being beaten by competition or the market itself.
Our bread and butter solutions are still evolving and are constantly being enhanced while we continually look for new and better ways to solve problems and bring value. We don’t really plan for 2019, to be honest, we are already planning for 2022. That is how we do things because that’s how you should do things. We’re very lucky since we aren’t a public company and have great backers who believe in us, we don’t have to go to the market and ask for money, we don’t have to worry about quarterly numbers to make the market happy. We can look at the long-term health of the company and the future of the solutions. We are always minding the store but we’re also always looking to add on a whole new wing.
We are currently concentrating on strengthening and adding to our core platforms, including our reconciliations and our cash and liquidity management solutions. We are also in the process of further expanding our Innovations Lab which spearheads our artificial intelligence (AI), blockchain and digital payment solutions.
How is technology affecting and disrupting the industry?
In many ways, the rise of digital payments is increasingly and rapidly shifting the dominance of the payment cycles away from traditional financial institutions to tech companies like Apple, PayPal, and Google as well as a host of other players that were never envisioned to be in this space even five years ago.
If you look at bitcoin or digital currencies and the rise of payments through predominantly mobile platforms such as WeChat with WePay, and similar platforms in Africa and Latin America, this shift has been transformational, and even though they have gained massive backing in their respective geographies, it has proven that this is a concept that it is bound to sweep across the globe. We are beginning to see it in the US as well as Europe and that’s why we have chosen now to introduce our digital payments solution.
What opportunities have you seen in the industry over the last 12 months?
There has been continued stress on strategic outsourcing by banks over the last few years in an effort to build efficiencies and realise cost economies. This overlapped with an increasing pressure to move increasingly strategic operations rather than generic functions, accompanied by a greater drive on operational transparency by regulators. Cumulatively these have acted as catalysts for our managed services offering whereby we uplift components of bank operations, particularly those related to our platforms, and in return provide for greater cost efficiency, reporting transparency, and high level of accuracy sought after by some of our global tier one clients.
While the above addressed discrete and tangible benefits, the industry continued its drive towards working more intelligently. We decided after witnessing all the clutter and confusion about AI and blockchain to wait it out. We realised there was going to have to be a culling that would separate the ‘wheat from the chaff’. Many people and companies were saying: ‘we have blockchain, we have AI’. We understood that some of those solutions were just simply visionary notions as opposed to any real demonstrable outcomes. In the beginning you had people going out there and saying ‘we’ve got a solution’, and it’s just two guys in a basement and it’s really not a solution, it may be a technology or the beginning stages of a technology but it may not have a real use or be perfected enough. Then there’s the next stage when the terminology begins to gain momentum and people start to jump on the bandwagon. That’s when you have companies already established in the marketplace rebranding or repurposing existing products to fit the new terminology.
We wanted to see where AI and blockchain were going before we entered into it because we have a name and a reputation which we wanted to uphold. Now, we think it is the time for us to get out there and do what we can uniquely do with our expertise and create solutions using this new technology that isn’t novel because of the technology itself but because that technology helps us deliver better results. We wanted to make sure people understood this is something few other companies are offering and that there is a value we can uniquely provide. That is an important distinction.
The market has matured somewhat and is now entering a shakeout period and we think people have a greater level of understanding of these new technologies and are more interested in hearing our message and understanding our value proposition. It is similar to the early days of the internet when no one could figure out how to monetise it and then after those companies without a viable product or business model left the marketplace the internet redefined itself and became a very different entity and medium for commerce.
For SmartStream this isn’t just talk, we have launched our Innovations Lab which is a purpose-built think tank that’s sole mission is to analyse and assess various AI and blockchain technologies, build our own solutions then turn them over to our technologists to productise them. We built our first centre in Vienna so we could avail ourselves of noted experts in the field including the head of the lab Andreas Burner, who is now serving as our chief innovations officer. We’re very happy with the reception our entry into the marketplace has received.
There have been many requests asking us to speak at various events, many existing customers have contacted us to learn more and we’ve actually received a lot of interest from companies that were aware of SmartStream but couldn’t use our existing suite of solutions. Now with digital payments and some of the advancements, we are making with blockchain and AI they have asked to meet with us to learn more.
Frankly, the reaction we’ve received has been somewhat of a surprise. We knew our entry would mean something and would capture a select audience but the appeal has been much wider than anticipated. We were invited by Swift to speak at this year’s Sibos in Sydney, about AI and blockchain and it was standing room only.
The key message is that experience is very important. The experience is quite significant and is important to gain the customer’s trust, particularly in the financial services industry. It is crucial to have a strong and stable background as they want a player they know they can rely on and is going to be there in the next ten years, as we done so over the last 30 years. We have six data scientists on board, working exclusively on finding new developments and the first is our digital payments solution. Experience, trust and employees with an unmatched skill set are unbeatable.
What are the biggest challenges in the industry? How is SmartStream rising to these challenges?
There are always challenges and naturally, in the finance space, they have continued. Financial institutions have to contend with more rules and regulations than ever before, the banks are in more countries than ever before and often these countries or regions have different regulations to contend with and all this has to be adhered to without spending more. The banks like any business want to do more with less, saving money while finding a way to make more money. Luckily, our solutions help with all of this. We streamline processes, provide greater visibility, and transparency and can do it all at a lower cost, freeing resources.
We also have a distinct advantage as a truly global company. We can spot trends, such as AI and payments, in one region, and immediately see how it transfers to other markets.
What is on SmartStream’s agenda for 2019?
Over the next couple of years, we will continue investing in the digital payments space to come up with new solutions. We will be working on delivering more AI and blockchain solutions to the industry and solidifying our leadership position in different domains, whether that is in reference data, utility data or different initiatives with blockchain and AI.
I am looking forward to some very exciting years ahead with new solutions and addressing the industry’s needs, as well as staying nimble so we can address any new requirements that may arise.
SmartStream is still growing by leaps and bounds. We are on target for our most profitable year ever, with record year-on-year growth. We are going to have more employees than ever before in the company’s history and this is while others are folding, looking at refinancing and being beaten by competition or the market itself.
Our bread and butter solutions are still evolving and are constantly being enhanced while we continually look for new and better ways to solve problems and bring value. We don’t really plan for 2019, to be honest, we are already planning for 2022. That is how we do things because that’s how you should do things. We’re very lucky since we aren’t a public company and have great backers who believe in us, we don’t have to go to the market and ask for money, we don’t have to worry about quarterly numbers to make the market happy. We can look at the long-term health of the company and the future of the solutions. We are always minding the store but we’re also always looking to add on a whole new wing.
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