By Cassandra Balentine
Financially focused organizations are under pressure to keep up with the times. This means enabling mobility, collaboration, and real-time analytics is a necessary move for financial application (app) developers. In addition to offering these capabilities, usability and ease of use are essential, especially as complex data mining and analytics become part of the mix.
Kenneth Fritz, EVP, Trintech, notes four increasingly influential macro trends in the development of financial apps—the rapid shift to the cloud, a rise in mobile executives, big data, and the globalization of the finance function.
It is important to consider financial apps beyond the traditional means of facilitating, managing, and automating common daily accounting and currency management tasks. Instead, financial professionals utilize the cloud and mobility functionality in order to respond and manage these duties in a collaborative and real-time manner. Additionally, the potential for leveraging data should not be overlooked.
Oleg Kernogo, deputy general director for technologies, SoftClub, says the development of financial apps emphasizes not only the automation of various activities, but includes business management/decision making, accounting/reporting, and auditing/controlling. "As in various businesses of financial institutions, there are various consumers of information with their respective tasks; they require different types of information processing, presentation, and depth of calculation. However, all of them should have the possibility to get both aggregated information—detailed data being the basis for such aggregation," he states.
Financial apps are mature. The basics of closing the books, invoicing, and payroll are already well handled by most top tier companies. Matthew Smith, president/CEO, 3C, sees a trend toward employing financial models outside of core financials. "These models are forward looking in nature and allow business leaders to predict and respond to different potential scenarios that could impact the business. In our experience, this trend is the most prevalent in the area of costing and profitability because business leaders need the ability to look ahead and predict costs for a multitude of scenarios in an effort to maximize profits," he says.
Bill Stone, founder, SS&C, adds that trends involve customer data protection including dual authentication and multiple tests to ensure app and database security.
Mobile demands are a core trend among the broad scope of app development. As in any industry, mobility changes communication behaviors as well as the general expectations of companies and professionals in which consumers choose to do business. Additionally, the proliferation of bring your own device (BYOD) trends leads to the elimination of a separation between work and personal life.
With these changes, Chris Purcell, product marketing manager, Epicor, suggests that the traditional sense of working inside of a financial app is fading fast. "Whether it be entering expenses, approving an invoice, assessing reports, or carrying out analytics, we have to be able to break down the restrictions and create tools that work the way modern business does."
He explains that this involves the necessity of solutions that work in any browser, on any tablet, or mobile device—with optimized interfaces for the different devices.
"Mobile technology and the Internet are causing the most dramatic velocity of change the world has ever seen. Consumers have adopted tablets—which effectively did not exist pre-2010—faster than any digital consumer product. Financial apps are challenged to stay relevant with consumers, as endless choices and new disruptive alternatives offer a better way to manage money," says Douglas Brown, SVP/GM, FIS Mobile.
"Banks and the traditional suppliers of financial apps face competition from Facebook, Google, ISIS, LevelUp, and Paypal. A host of digitally savvy and non-legacy challengers threaten the traditional customer relationship model in profound new ways. The financial industry must embrace the change and develop the next-generation of apps that move beyond banking," he adds.
SS&C’s Stone predicts that mobile apps will continue to add depth and scale while becoming mission critical.
"Business analytics is high on the agenda for finance managers and executives. Finance departments are asked to be more strategic and analytics is an enabler," suggests Paul Turner, senior director, product marketing and strategy, Adaptive Planning. Within the reliance of analytics is the need for self-service solutions where finance professionals can obtain the information themselves.
Purcell says we are now at the point where people start to look at what they want to achieve from big data, focusing less on the technology and more on the tangible benefits.
3C’s Smith agrees, noting the drive to expand access to data and tools with cloud computing will continue as a major driving force for financial apps. "From a functional perspective, we’ll see apps focused on delivering forward-looking analysis and that allows users to quickly build detailed models with large data sets," he states.
The convergence of financial and operational analytics also plays a role in the future of financial apps. "Increasingly, finance organizations take note of the operational aspects of the business as organizations seek to be more agile," says Turner. "For example, finance organizations within software companies are increasingly interested in sales and service performance as well as the impact on subscription revenue. So financial will increasingly need visibility into the operational aspects to forecast, model, plan, and adjust more effectively. With the need for operational visibility and better agility extending further, we expect visibility to encompass data beyond the enterprise—and that’s were big data will begin to intersect with finance," he adds.
Trintech’s Fritz says the use of different storage mechanisms for financial app vendors manifests itself in a number of different ways. Vendors now must accommodate both structured and non-structured data together to help companies bring to bear all types of information needed to make decisions or process information. "We’re seeing a lot of innovation in this area across the industry, moving to in-memory data management and database to enable real-time processing," he adds.
Brown suggests that the evolution to mobile is causing financial institutions to think differently in how they innovate, moving towards integrated services and systems that are needed to create personalized mobile experiences with unparalleled security measures.
"The increased adoption of smartphones and tablets makes it critical for companies to provide their employees with easy access to business data," says Dan Miller, GM, software vertical, NetSuite. "Software providers are now expected to have Apple iPhone and Andriod-enabled apps with advanced functionality that an help employees conduct business on the go. Mobile savvy executives are adopting cloud-based financial solutions like enterprise resource planning (ERP) to provide real-time access to critical business information from any device, anytime, anywhere through a Web browser or app. This enables executives to make business decisions more quickly and allows software as a service (SaaS) software companies to meet the unique needs of customers purchasing their SaaS versus a traditional licensing model."
The discussion of the cloud is often integrated into the need for mobility, but is worth a dedicated discussion.
Adaptive Planning’s Turner sees a substantial move to the cloud. "Traditional on-premise financial management software such as Oracle Hyperion has become simply too hard to maintain, upgrade, and use. Finance users are looking for something better, more flexible, less costly to run, and easier to use," he says, noting that cloud apps have reached the point where they replace finance apps within the enterprise—from enterprise resource planning, to budgeting and planning, to financial consolidation with cloud alternatives. They are also included in evaluations almost as a matter of standard.
Epicor’s Purcell points out that CFOs are becoming the top technology investment decision maker in many organizations. "They are attracted to the opex versus capex benefits that have financial solutions purchased on a SaaS model whereby costs are reduced and shifted from capital to operating expenses, which saves money and looks better on financial statements. This has led to a shift in how finance apps are delivered, and it’s growing."
Trintech’s Fritz also sees a movement to deliver financial apps via SaaS. "When we first launched Cadency, a SaaS-based solution for the record-to-report process, we encouraged customers to consider a cloud solution. Very quickly we witnessed a shift in companies’ views of the cloud and now see strong demand for SaaS-based financial apps," he says. "Companies prefer the economies of scale and up-front savings offered by cloud-based apps, and just as importantly, a cloud solution can be turned on very quickly to address an urgent business need without the finance department having to effectively wait in line amid a backlog of internal IT projects."
Globalization also plays a role. "Increasingly, companies rationalize where work gets done based on the cost of business in different geographies. We’re seeing a rise in shared service centers of non-core financial activities in low-cost countries, such as Budapest, China, and Mexico. For the record-to-report process, it’s critical that financial executives have complete visibility into all financial activities, which is why a SaaS-based solution that enables collaboration, monitoring, review, and approval is critical to managing dispersed teams while meeting short deadlines for the financial close," adds Fritz.
The way people interact with systems and each other is constantly evolving. Social and collaboration tools provide a new way to do business, follow items through their process, and create working social networks, says Purcell.
FIS’ Brown notes that within the next few years, financial institutions will offer cross-channel experiences using mobile devices at an ATM, mobile to online for advanced authentication, real-time money movement, mobile commerce, and high-value offers and rewards.
SaaS solutions appeal to a broad market, featuring lower up-front and implementation costs. In the next few years, Fritz expects to see the shift to SaaS-based solutions level the playing field for financial vendors and their apps. "We’re already seeing what historically would be considered small customers pursuing tier one solutions, and the largest vendors are starting to look downstream for growth. As a result, financial apps will increasingly complete on their merits rather than the size of the vendor," he asserts.
SoftClub’s Kernogo says that in three to five years, he expects that all apps independently of a delivery channel will become convenient, full-fledged solutions with maximum functionality, regardless of whether they are intended for back office, front office, or self service, which will lead to a positive user experience and the management of financial flows independent of location. "
Turner notes consumerization as a trend to watch. "As the finance department’s expectations of self service and ease of use increase and the millennial generation further enters the workforce, we expect financial apps to increasingly take design cues from consumer apps," he says.
Digging into Financial Apps
Financial apps represent a range of solutions, serving many vertical sectors. Here, we highlight core functionalities of select products.
3C Software’s ImpactECS is a dynamic cost and profitability modeling platform that provides business leaders access to results that enable them to run their organization effectively. Whether the client is a manufacturer, distributor, or service provider, ImpactECS offers everything needed to build, run, and maintain models unique to their business requirements.
Adaptive Planning is used across a range of industries including financial services, high tech, CPG, retail, manufacturing, non-profit, healthcare, and media.
The company provides a complete cloud business analytics suite including Adaptive Planning, which provides complete budgeting, collaborative planning, modeling, and forecasting as a cloud-based solution; Adaptive Consolidation, which provides complete financial consolidation including GAAP/IFRS reporting, multi-currency management, intercompany eliminations, minority interest management, reclassifications, real-time reporting, and financial close collaboration; Adaptive Discovery, which provides cloud data visualization and analytics on financial and operational data providing personalized dashboards and scorecards, key performance indicators, and ad hoc analysis; and reporting, which provides complete financial and management reporting to meet a range of finance needs.
Epicor’s Financial Management solution is built around a series of unique global engines, enabling effective operations in existing and new markets as necessary. As a business is extended through a combination of organic growth, mergers, and acquisitions, it can become challenged by complex and demanding global financial and regulatory burdens—demands that must be adapted instantaneously. At the heart of the Epicor solution, the company’s global engines are designed to add accounting agility and flexibility to a business while simultaneously allowing it to meet local, financial, and legal compliance requirements of individual markets.
Epicor Global Ledger is the heart of Epicor Financial Management, processing and posting all accounting transactions created through Epicor apps, as well as entries made directly within the ledger.
Epicor Financial Management provides flexible accounting representations through multiple book functionality, which allows the creation of unlimited financial books to support a variety of financial requirements.
Epicor also offers Accounts Payable, Accounts Receivable, Tax Connect, Credit Card Processing, Multi-Currency Management, Multi-Company Management, Asset Management, Cash Management, Collections Management, Advanced Financial Reporting, and Budgeting & Forecasting solutions.
FIS provides an extensive platform architecture that enables its clients to leverage the scalability, security, and common components of strong authentication and analytics while creating a framework for integration of new and innovative capabilities.
The company provides clients with the control needed to rapidly companion develop differentiating functionality. FIS provides a cloud-based architecture, which offers an integrated cross-channel and commerce experience at the retail point of sale, ATM, paper statements, and in-branch servicing for large banks through community and credit unions.
Architected as a full app or as API services, FIS Mobile Wallet integrates into existing branded apps for banks or retailers. This delivers unparalleled security for consumers as payment credentials are stored in the cloud and not on the phone. The experience is much more than payments as customers can also redeem real-time offers, use loyalty or rewards points, and even add a tip. FIS Mobile Wallet is used to check in at a bank branch, pay a bill from a paper statement, or to withdraw funds at an ATM as Cardless Cash Access.
NetSuite OneWorld a cloud app developed to deliver real-time global business management and financial consolidation to multi-national companies and divisions of large enterprises. It enables them to automate complex, mission-critical business process in the cloud, from ERP to customer relationship management to ecommerce. The solution readily handles different currencies taxation rules, and reporting requirements at fraction of the cost of traditional on premise ERP solutions, translating into 19 languages, supporting more than 190 currencies and exchange rates, and meeting regulatory and taxation compliance for more than 50 countries, which enable businesses to deploy the solution quickly and easily in multiple regions.
SoftClub offers a variety of major financial products, including SC-BANK NT, an online, real-time, customer-centric core banking system; SC-RETAIL, a centralized system for retail banking; SC-TSMFR, an intrabank settlements center; SC-NDO and MANGEMENT, for cash-in-hand and valuables accounting, processing, and management; SC-BANK-CLIENT Internet banking solution based on SOA and WEB-technologies; SS-KOMPLAT NT, automated billing for housing, communal, and other services rendered to individuals; SC-DFA electronic depositary for securities; and SC-ANALITICA, a management information system.
SS&C is a global provider of investment and financial software-enabled services and software focused exclusively on the global financial services industry. Some 5,500 financial service organizations, from the world’s largest institutions to local firms, manage and account for investments using the company’s products and services. These clients in the aggregate manage over $26 trillion in assets.
Trinitech’s Cadency is a single end-to-end financial governance solution for the entire record-to-report process, including certification, compliance, completion, close, and journal entry. It is designed to provide CFOs and controllers with a centralized console to monitor progress, prioritize activities, and ensure the accuracy of results. Cadency is SaaS-based and includes native mobile access currently available on Apple iOS devices.
The latest technologies—including mobility and the cloud—strongly influence the demands of consumers, and in turn the businesses they rely on for daily operations. Financial apps benefit from these latest developments, and have the capacity to offer much more insight in the future with the help of intelligent data and the tools that leverage it for transparency and predictability