Hartford Business Journal

22 Hartford Business Journal • September 11, 2017 • www.HartfordBusiness.com HARTFORD BUSINESS JOURNAL Black Dragon Capital LLC unit. He's now chairman and CEO of Massachusetts tech- nology/multimedia firm Avid Technology. "Let's put community-based institutions back in the center of these transactions," Her- nandez said, "instead of having to go around them because they lack the technology.'' To help smaller lenders, Mitchell said NYMBUS is introducing Oct. 15 its new core IT platform that bank clients can use not only to drive their daily operations but also provide new capabilities for growth. NYMBUS, for example, devised an IT plat- form that enabled two media companies — Gannett and Trinity Mirror — better manage their advertising lifecycles, billing and operational workflows. Eventually, NYMBUS eyes introducing its core product to other industries lagging digitally, such as insurance and health care. As an incentive to join NYMBUS's net- work, Mitchell says the company has been buying out some banks' existing fintech contracts and paying their termination fees. "Current legacy IT systems that run most banks and credit unions throughout the U.S, including Connecticut and all of New Eng- land, are significantly ill-equipped to support the Digital Age,'' Mitchell said. "These legacy systems are typically built around an ac- count and not a customer, thus they were never designed with current digital-channel requirements in mind and are unsuitable to service the needs of today's digital economy." Not all fintechs the same Fintech is an overly broad descriptor for in- formation-technology vendors such as COCC, the half-century-old Southington firm owned by 175 New England lenders. COCC assists banks by helping them set up and manage the digital spine that member-institutions rely on to provide electronic and mobile banking and other remote services. Windsor's SS&C Technologies is a highly successful fintech that serves primarily mutual- fund operators and other Wall Street financial-investment servicers and advi- sors. In addition, Wis- consin-based FIServ, this nation's largest provider of data- and services-processing support to banks, serves finance customers throughout New England. Four years ago, FIServ acquired former Open Solutions in a deal worth more than $1 billion. FIServ now offers many of Open Solu- tions' add-on technology products to banks, thrifts and credit unions through COCC and other fintechs. "The majority of us in Connecticut consider ourselves fintechs … that partner with finan- cial institutions,'' said Michael Nicastro, CEO of Continuity in New Haven, a "reg-tech" that aids banks with their regulatory compliance. "We're not out to do their business.'' The automated teller machine and debit cards and cellphone and personal-computer access consumers rely on to make purchases and bank online require so- phisticated software and applications algorithms. COCC, FIServ, and a roster of newer technology providers springing up, are investing huge sums to cre- ate and sustain the digital infrastruc- ture to support such offerings. Although COCC and FIServ are partners, COCC relies on its in-house team of devel- opers to devise new apps that enhance its core services, said COCC President Joseph Lockwood. "Having the ability to extend the core banking platform, while designing new consumer- and business-delivery channels provides us with an immense advantage over most fintechs,'' Lockwood said. Other fintechs, such as Payveris, as- sist banks and their depositors with their online-payments and wire-fund transfer features. Others, like Quicken Loan and Ally Bank, compete against banks with online mortgages and other loans. Wall Street investment house Goldman Sachs a year ago debuted an online bank offering savings accounts with a minimum $1 deposit. Still others, including cryptocoin providers like bitcoin, are increasingly crowding fintechs' space, observers say. But experts say changes are occurring, particularly among fintechs that collaborate with financial institutions, that within the next decade could make lenders more con- venient and responsive to their customers. It won't be enough to simply offer online transactions, experts say. What bankers really want these days, according to Rhodes-Kropf and others, is to mimic the ability of internet giants like Amazon and Google that not only track the personal profiles of their members but also their spending and other habits by monitor- ing their online activity. That means the ability to amass, analyze and then intuitive- ly mobilize those huge volumes of data into product and service offerings. But doubts are also emerging as to how transformative fintechs will be to the bank- ing landscape. Indeed, so-called "big tech'' players such as Amazon and Google, not fintechs, pose more of a disruptive threat to financial-services technology, according to a recent report by the World Economic Forum. It notes that Amazon's cloud-based web technology, for instance, is used by a number of financial players, among them Capital One, Nasdaq and Stripe. Continued from previous page Louis Hernandez Jr., co-founder, Payveris and Open Solutions Inc. Matthew Rhodes- Kropf, a Boston venture-capital investor "The (financial-technology) landscape is huge. People are trying to reimagine banking.'" Matthew Rhodes-Kropf , managing director of Tectonic Ventures in Boston and a visiting finance professor at the Massachusetts Institute of Technology.

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