Charlie Platt is a Managing Director, Banking at SAP Fioneer. The company was launched in September 2021 with an investment from Dediq GmBH. Its vision is “An inclusive, resilient and responsive financial ecosystem for a rapidly changing world. Our vision is for open, innovative financial services that are powered by technology and free from red tape and outdated systems, without ever compromising on reliability.”
What is SAP Fioneer?
It’s a company with several major customers, yet is new and separate from SAP, though SAP returns a minority shareholding. What is SAP Fioneer, though? I asked Platt to give a 30-second pitch for SAP Fioneer.
“SAP Fioneer brings together decades of incredibly well-engineered products but applies the need of today’s FinTech speed of change and agility.”
Is Fioneer a product or a consulting company?
“It’s more than just consulting. It’s a joint venture, and SAP owns 20% of the business. The collaboration between ourselves and SAP will continue to be extremely close. We’re more than just a services company because we took the IP for the banking and insurance-related products from SAP and moved across to Fioneer.
“For example, the core banking applications sit with Fioneer now. They continue to sit on the SAP infrastructure, but the banking intelligence of the software on top of it is all with Fioneer. The same applies to our finance products. SAP still owns the general ledger with banks, and they will continue selling it. We own something called FPSL, which is the financial products sub-ledger. So it is the banking and insurance, and finance-specific applications that we have moved out of SAP into Fioneer. Then we do provide consulting services around that as well. We’re a software company with consulting capability.”
Does that mean Fioneer is also responsible for the development of the product as well?
“We have all the development of our IP. This is why collaboration is so important. Because if you take FPSL, we will develop that. But of course, we want it to develop in line with the general ledger from SAP. That’s why our relationship will stay very close there, but we have all the development capability of our products.”
Platt also shared that when SAP Fioneer was founded, it brought 450 employees across from SAP to the new company. Since then, it has added another 650 new employees from across industries. SAP Fioneer was created because SAP found it challenging to protect the investment needed in a fast-changing, highly regulated industry. Creating a separate entity meant investments were protected from other demands. SAP Fioneer was created with an outside investment, with the IP and revenues to kick-start a significant business.
Looking back and forward
Has the target market evolved since SAP Fioneer was founded in September 2021?
“It remains the same. We have the big banks that we already have as customers all over the world, and they continue to be a big focus for us. We continue to grow the Challenger bank market, which we’ve been doing for the last few years. I don’t think the target market changes, just the proposition that we take, changes.”
What did you achieve in 2022?
“Well, first of all, there’s the physical elements, like launching 13 legal geographic entities, which is a big task in itself. Obviously, the migration of all the people, getting them into their roles, and moving across a whole bunch of customers with whom we have direct relationships. We’re not forcing customers to move, but we are having to contract direct with those customers to provide services and software to them directly. The onboarding of many banks has been one of the biggest achievements.”
Does that mean they can buy the banking solutions directly from SAP if they want to?
“Some of it they can. We still have a very close relationship with them. So it depends on the nature of the actual deal, but yes, there are ways they can buy through SAP as well.”
What do you hope to achieve in 2023?
“Launch some new offerings to market, which is the flexibility in the plans we came up with. Additional partnerships, potentially with other banks, will also be the key areas. They will be things around lending, embedded finance and different banking elements, like SMEs.”
Like the Bank of London partnership?
“That’s a perfect example of a, not a traditional partnership. But there are sorts of things that we could work on much more where you’ve actually got a bank incorporated in what we do.”
Trends and challenges
What macro trends are you concerned about in 2023?
“Certainly, the cost of living issues are going to have to be things that we are able to help the banks help customers get better services. Those macro trends mean that we’ve got to think more about what customers’ customers’ problems we solve. The banks are our customers, and we’ve got to think about their customers’ problems. The other big thing for us is ESG, where we are making sure that we can provide solutions in conjunction with SAP. Things about how do you lend in a sustainable way? For the banks to be able to know who they are lending to and how green that lending is?”
What are your challenges in your role?
“I’m one of the managing directors in the banking division. Until the beginning of January, I was president of EMEA. We’ve restructured to focus more on the industry sector that we work in. Now I have a global role across banking. I am one of a few MDs that run that banking division.
“My key challenges are making sure that we think about the customers’ customers’ problems. Instead of thinking like a traditional software company that thinks about technology, we need to think much more about the problems we’re trying to solve with our technology. It’s much more lifting ourselves away from having technical solutions, to solving business problems and designing that around business outcomes.”
The impact of breakthrough tech on banking
How will AI impact banking over the next year?
“Are we really there for AI in banking? I don’t think, possibly more machine learning as opposed to AI. The challenge is, of course, the regulators want to be able to demonstrate why decisions were made. For regulatory purposes, for misselling, or whatever it might be. It’s very hard to take too much true AI capability purely because of its auditability.
“However, I do believe that there can be a lot better capability in terms of predictability of cash flow issues, for example, to help businesses particularly know where they’ve got potential problems coming at them. Then using machine learning to make predictions for the right type of finance for people to consume, as opposed to those users having to find the finance they think is right for them.”
How will blockchain impact banking over the next year?
“In retail banking, we’re still quite a long way away from blockchain really having proved its capability, obviously much more on the trading side, we’ve seen more activity. I think blockchain hasn’t got a massive play in retail banking, certainly within 2023.”
The book question
What’s the latest book you read? And what is your takeout for business from it?
“The latest book I read was ‘For Whom the Bell Tolls’ ( by Ernest Hemingway, Amazon Aus, UK, US). I’m trying to think of what business he could have taken out of that. I guess resilience because it’s very important when you’re a new business to persist through challenges you may face. For me, not for one moment, am I linking my business challenges to the war? I wouldn’t want to make an association between those two things. But persistence is important in trying to develop anywhere, whether you’re a new business, but certainly in the FinTech world, where a lot of change is happening.”
Why do you think you are different from the rest of the market?
“The competitive landscape is very complex. It comes from small fintechs, large software vendors, and systems integrators. It’s probably the best service industry in the world, particularly in banking. The differentiation we bring is that we have rock-solid engineering from the products underneath, which is a table stake in banking. If it’s not rock solid, forget it. We have that rock-solid infrastructure, but we now have the ability to be agile and the investment to be agile, to provide that creativity over the top of it. We talk about rock-solid engineering and bold creativity. Without the rock solid, it doesn’t matter how bold you are because, in banking, you can’t do it. So it’s bringing that creative layer over the top of it.”
