Canadian Fintech Ecosystem Part 2

Part 2 of the interview with Arvind Sharma, Chief Digital and Payments Officer at Central 1, a company that builds robust products and services to empower digital banking in Canada.

To read Part 1 of the interview, click here.

Arvind, what Big Data technologies and tools do you leverage to handle large amounts of transactional data?

We looked at a few tools but ultimately settled on using Amazon Web Services (AWS) for the capability’s significant parts. I will be honest with you, from a price perspective, they were pretty good. From a capability perspective, they were really good. At the end of the day, it came down to the toolset that the teams were most comfortable with and had experience with. I am not completely convinced that either of those platforms is better than the other. 

We lean towards the tools that are available with AWS. Splunk is also a great tool, as it allows us to capture data out of the logs and make a lot of sense of everything that is going on. Also, we use Tableau for a lot of our reporting.

We are trying to standardize on using AWS and the tools that come with it. It’s cloud-native. It works very well for the credit union systems, particularly in not having to stand up for their infrastructure capabilities. People who work with those tools are readily available in the market. The credit union systems are aware that they could do a lot with the data, and that is an area that they’re evolving into. But it has not been used as much as we could have used in the past.

Who are your main competitors, and how do you differentiate yourself?

Nobody else in Canada is doing what we do in providing a platform as a service.

We host it; we provide the software, we run it. We conduct all the upgrades. It is a turn-key solution for a credit union or a financial institution to implement and work with us in integrating it into their systems.

We have a couple of differentiators. Our platform integrates with Backbase – a world-leading digital platform rated by most third-party analyst organizations like Ovum. We have built the platform so that over time, as digital evolves, we can integrate it into more components. So the first differentiator is we’ve built this on a world-class platform. 

The second is that we are building what has called a community, an ecosystem of fintech companies. We are opening up our platform to the world to say if you want to develop it, if you want to access these credit unions and financial institutions, then we could put you on the platform. A fintech company that wants to provide this service would come in and build a widget that allows the fintech to serve up their capability to those on board. We call it “The Community,” but it’s an ecosystem of fintech providers and innovators that want to build on our platform. It allows us to tap into the best the Fintech world has to offer and distribute the innovating effort. 

The final one is we have full integration into Canada. We support all the major Credit Union and Small bank banking systems. We give this access to a fintech that wants to come and work with us. They do not have to worry about the unique configurations of each of the banking systems; we have solved a lot of that. Our organization, as much as it leverages Backbase today when we say, “the Canadianization layer,” we mean integrate into backend banking systems, which is done by our implementation and development teams.

Central 1 primarily works on the Canadian market. Do you envision expansion to international markets?

Our primary clients are credit unions and financial institutions across Canada. The credit unions are analogous to Building Societies in the UK or Community Banks in the US. So our primary mandate is to serve them. 

Going to the US market and going to broader markets are not in our sweet spot right now. We have enough work to do to focus on Canada and growing here. But we are always willing to share and learn best practices so if anyone wants to touch base on what we are doing – please reach out. 

You provide a platform for financial organizations to transform their digital operations seamlessly. How quickly can financial institutions integrate onto the platform? 

Well, we have spent a decent amount of time and effort to improve our onboarding capabilities. 

Aside from that, it depends on their banking host. If you think about how banking systems work, most of the information, the accounts, the set-up of the accounts on daily processing, etc. – that’s done in what we call “the core banking system.” Forge sits on top of that and manages the interactions between the core, the customer/user, and other third party systems. If your core is one of the ones used by the credit union system (and includes products such as Temenos, Fiserv DNA, etc.), is API or ISO enabled, and you are willing to take most of the functionality out of the box, we can measure the time in weeks? Once you start adding customizations and unique features, the time becomes much longer.

So quick onboarding could be another differentiator for Central 1?

Absolutely. Thanks for pointing that out.

What are the criteria for an organization to work with Central 1?

The easiest criteria are if they are doing banking in Canada – that is what we are set up for. The platform itself can support other kinds of businesses. If they are making payments, if they are doing mobile development, we can integrate them into our platform as part of the Forge Community. There are a bunch of different ways that organizations can work with us. We’re willing to talk to Fintechs, banks, almost any financial services organization and figure out how to integrate them into the platform.

At Central 1, you use Backbase as a core component of your solution. What was the reasoning behind choosing Backbase? Did you consider other options?

We did consider several other options at the time. The primary reason for choosing Backbase was that they consistently rank top of the quadrant by third-party rating agencies like Ovum. We visited them and looked at the capabilities they were building out. We also did a proof of concept to demonstrate the pace at which we might be able to do innovation, and we talked to some customers.  

Arvind, thank you for your time to share the thoughts from the front lines of the FinTech and banking industries.

To read Part 1 of the interview with Arvind Sharma click here.

Stay tuned for the next interviews!