Banks turn backs on local technology

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Banks turn backs on local technology

Technology is more innovative if it has been adopted overseas, a panel of financial services experts has said.

Speaking at the ‘Opportunities and Innovation in Financial Services’ seminar in Sydney last week, the expert panel concluded that IT systems are more attractive to banks and other institutions if they are being used internationally, rather than just in Australia.

“If it’s somewhere else, it’s better – I don’t know [why],” said David Fite, partner at J.C. Flowers & Co.

“To find innovation, you have to look globally.”

The flipside is that, as a technology developer, ‘it’s [also] a lot easier to get innovations adopted internationally than in your home country,’ Fite said.

Tony Ward, founder and chief executive of TCS Financial Solutions, agrees. Ward founded the successful Financial Network Services (FNS), which he sold to Tata Consulting Services in 2005.

“You’re never a profit in your own country,” Ward told the packed audience.

“The issue in Australia is you can only go so far. You have to look at how to sell your product on an international stage.”

FNS used expansion in Asia to fuel growth and make its core banking technology desirable to top-tier banks in Australia.

“We had a number of customers in Australia, all tier-two,” explained Ward.

“We looked at the United States but came to the conclusion that it’s still difficult to get into and not necessarily the most rewarding.

“Don’t necessarily assume it’s the pot of gold it appears from the outside – the prices aren’t as good because there is more competition,” Ward said.

Ward said China is ‘a magnificent market’ but requires local people and partners to make it successful. India is more difficult ‘because it works to an L1 concept, essentially the lowest price’.

Ben Cukier, a partner at the New York-based venture capitalist firm FTV, urged local technology developers not to dismiss the U.S. market entirely.

“There’s only one word for the U.S. market, and that’s ‘brutal’,” said Cukier via videconference.

“But a lot of [your] competition starts here, and if a product is going to make it in the long run, with a few exceptions you’ve got to make it [in business] here.”

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