Biz Builder Mike

You can't sail Today's boat on Yesterdays wind - Michael Noel

Accenture to Invest $3 Billion in Fintech Initiatives that Will Help Companies become Cloud First Businesses

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David Jimenez Maireles, Customer Experience Officer at TNEX, a Vietnam based digital bank, claims that despite the skeptics, banks have been “no laggard when it comes to cloud adoption.”

Banks have been migrating incrementally, and today “the average bank has 58% of its workloads in the cloud—mostly in private cloud centers,” according to a recent report from Accenture.

The report notes:

“Many banking CEOs today believe if they had been more in the public cloud, the last few months (during the Coronavirus pandemic) would have been a lot easier. The Cloud will be both transformational and disruptive post-COVID-19, offering banks improved scalability, efficiency, agility and security. Cloud maturity is becoming a hallmark of the world’s best-performing banks.”

Cloud-powered technologies are increasingly being adopted by financial service providers across the globe. As covered, Australian SME banking challenger Judo Bank will be using the Cloud based bank operating system developed by nCino.

The Qatar Financial Center Regulatory Authority (QFCRA) recently revealed that it will be migrating its online services to the Microsoft Cloud in order to move forward with its digital transformation strategy.

There are many other related technologies such as low-code platforms that are being developed around Cloud solutions so that businesses are able to streamline their operations.

In a recent interview with Crowdfund Insider, Michael Rennie, Product Manager at Mendix, a Siemens business and global leader in enterprise low-code, explained that low-code enables organizations to move quickly to deliver unique and useful cloud-native applications that can scale and take on high volumes of traffic.

As noted in Accenture’s report, the skeptics or industry participants who doubted that Cloud based models could work had pointed out that there were security issues, lack of regulatory clarity, and “potential competitive issues with the largest cloud service providers and the seductive economics of fully depreciated data centers.”

The report also mentioned:

“The [Cloud] debate continues, but the evangelists have gradually gained the upper hand: Cloud investment has grown strongly in recent years and is forecast to continue at 15 percent a year between now and 2022.”

It added:

“More than half of [Accenture’s] top banking clients have adopted a multi-cloud strategy. We believe that, to an increasing degree, this suits the requirements of most banks. Key benefits include: best-of-breed services, autonomy and agility, regulatory compliance, and cost reduction.”

The report from Accenture further noted that Cloud solutions help reduce operational costs up to 20%. They can also reduce time to market by as much as 50% while offering around 50% quicker provisional speed.

Accenture revealed that it’s planning to invest $3 billion, over the next 3 years, in projects that will help its clients with becoming “Cloud first” businesses.

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Multi Billion Dollar Merger between Russian Tech Firm Yandex and Challenger Bank Tinkoff has been Scrapped

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The recently proposed merger between Yandex, a major Russia-based tech firm, and banking challenger Tinkoff will not be finalized because the bank’s founder Oleg Tinkov has walked away from the deal.

Tinkoff’s management confirmed that all negotiations between the two parties have now been “terminated, effective immediately.” Yandex and Tinkoff had previously reached an agreement “in principle” which would have led to the tech giant acquiring the challenger bank in a $5.5 billion cash-and-shares deal.

The shares of both Yandex and Tinkoff were down by around 4% and 6%, respectively (on October 16, 2020 following the news update that the acquisition deal had been called off).

As stated in a release published by the London Stock Exchange (where Tinkoff’s holding company TCS has been listed):

“TCS Group Holding PLC refers to its announcement of 22 September 2020 that it was in discussions with Yandex N.V. regarding a possible cash and share offer by Yandex for the entire issued and to be issued share capital of Tinkoff. Following further discussions, including with Tinkoff’s controlling shareholder, the parties have agreed not to proceed with the Potential Transaction. Negotiations between the parties with respect to the Potential Transaction have therefore been terminated.”

The announcement also noted that Tinkoff would be looking forward to continue to working cooperatively with Yandex on current and future initiatives.

There were some signs or indications that the proposed deal would not materialize. Tinkov had reportedly consulted several parties about acquiring the lender which generated approximately  $500 million during the past 18 months. As reported by the Moscow Times, one of the potential buyers may have been telecom company MTS, which currently operates a small banking institution.

Tinkoff also claims that it’s not negotiating any deals with other parties and that it will continue to operate independently (at least for now).

One of the issues that may have led to the negotiations being called off could have been related to Tinkov’s expected role after the deal had been finalized. At present, Tinkov is being treated for acute leukemia at a hospital in London. He’s also dealing with U.S. led extradition charges because he may owe as much as $1 billion in taxes.

Tinkov wrote a letter to the bank’s workers in which he noted:

“Today, I decided to cancel the potential deal with Yandex. Why? We started talking about merging, a search for synergies and rapid growth of customers. They wanted to build the largest private company in Russia. In fact, it turned into a sale. They just wanted to buy Tinkoff, with all the resulting negative consequences for us. Tinkoff will not be sold to Yandex or MTS.”

Tigran Khudaverdyan, deputy CEO at Yandex, stated:

“We agreed that after the deal Oleg [Tinkov] would have participated in the management of the bank and helped Yandex. It was logical, because after the deal Oleg would have become a major shareholder in Yandex. Unfortunately, after every stage of the negotiations, more and more requirements appeared. Therefore, when we learnt today that Oleg decided to back out of the deal, we were not surprised.”

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Australian SME Banking Challenger Judo Bank to Use Cloud based Bank Operating System Developed by nCino

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Australia-based SME challenger bank Judo Bank has chosen nCino (NASDAQ: NCNO) to help streamline its lending processes. Judo Bank will be using nCino’s Cloud-powered platform to enhance its services which are mainly intended for small businesses.

nCino, Inc. is an established cloud banking and digital transformation solutions provider for the financial services sector. nCino’s Banking Operating System will be used by Judo Bank to improve its lending operations.

Judo Bank will be working cooperatively with nCino so that the digital challenger can automate key aspects of its banking processes.

As mentioned in a release:

“As part of the nCino Bank Operating System, Judo will implement nCino’s Commercial Banking Solution, which automates workflows and provides real-time reporting, elements of the credit analysis process and digital document management capabilities to drive a transparent and fully digital end-to-end lending process.”

Tim Alexander, Chief Product Officer at Judo Bank, said that Judo’s goal is to help Australian SMEs by “bringing back the craft of relationship banking and delivering the funding that SMEs desperately need and deserve.”

Alexander added that his company shares some of the same views as nCino which is why they chose them “to help disrupt the industry and deliver differentiated services to better finance the growth ambitions of Australian SMEs.”

Mark Bernhardi, General Manager of APAC at nCino, noted that his company is looking forward to working with Judo Bank. They’ll be helping the digital challenger with “creating a more efficient banking experience that is tailored to [its] clients’ individual needs,” Bernhardi said.

He added:

“Judo was created to be fast and nimble and to provide new options to SMEs across Australia. We look forward to building upon our partnership to support Judo’s craft of relationship banking, enabling them with the latest technology from nCino as they help their clients capitalise on the right opportunities at the right time.”

In May 2020, Judo Bank had managed to secure $250 million through an equity round and also achieved Unicorn status (companies valued at $1 billion or more).

nCino is a Wilmington, North Carolina-based Fintech that offers a cloud banking platform built on the Salesforce platform. It launched its initial public offering (IPO) in July 2020. The firm’s shares had rocketed on the NASDAQ as soon as trading began earlier this year.

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