EXCLUSIVE: “Plugged into Success” – Vitus Rotzer, Bottomline in ‘The Fintech Magazine’

There’s mounting existential pressure on banks, but that’s not a reason to slow SaaS migration, says Bottomline’s Vitus Rotzer. If anything, it’s a reason for speeding up!

In a world where the ‘business norm’ means weathering unpredictable events of the internal, external, and geopolitical kind on a rolling basis, agile software-as-a-service (SaaS) solutions have become one of the great fintech heroes. They began to gain traction in 2019, thanks to their plug-and-play capabilities and promise of infinite flexibility.

But the business-saving potential of SaaS came to the forefront just a year later when providers started churning out the two tools that were so central to financial players’ ability to survive COVID-related storms: new front-end experiences, which helped to differentiate brands and satisfy customers; and back-end services that offered swift delivery and management of new technology without burdening overstretched internal IT teams, who were already grappling with a tsunami of pandemic pressures.

The benefits were palpable, with Mambu’s 2023 Benchmarking Survey showing that companies who had partnered with hybrid integration models or a SaaS platform over the course of 2020 and 2021 fared remarkably better than those who hadn’t. Adopters averaged an improved annual revenue growth during the trying year of 2020 of 14 per cent, versus one per cent for the rest of the market.

They also recorded a bounce-back rate in 2021 of 34 per cent, compared to 10 per cent for those unaided by SaaS. Now, with COVID hopefully behind us, the imperative for adoption might appear less urgent.

But Vitus Rotzer, chief revenue officer – Rest of the World Banks& NBFIs EMEA & APAC, for Bottomline, warns against shifting digital transformation strategies to a lower gear.

“It is true we have just started recovering from the pandemic; nevertheless, we have a true melting pot of factors within the payments industry where a great deal needs to be considered, agreed upon, and planned for in 2023 and the longer term,” he says.

“SaaS, ultimately, allows companies to continue meeting the needs of the customer, which is a defining trait of competitiveness”

As an international SaaS provider that assists with digitising safe and secure payments for 10,000 businesses globally, including 1,400 financial institutions, Bottomline is concerned with preparing solutions for a future in which the only certainty is change. Rotzer, for one, appreciates the minefield of known challenges that lie ahead: the shift in hitting SWIFT CBPR+, the deadlines for ISO 20022, the new initiatives from the European Commission to make instant payments in euros available to all EU and EAA citizens, and the mandating of fraud prevention practices, to name a few.

But December 2022’s The Future of Competitive Advantage report, Bottomline’s rolling bank survey to assess progress toward completing digital payments transformation strategies, revealed a real disconnect between mindset and the reality of tomorrow’s payment landscape

.Interest in migrating towards a single SaaS platform had cooled by 15 per cent compared to last year. And yet, in the same breath, respondents said their biggest internal issues were all ones that could be directly improved with a SaaS solution.

“Twenty-seven per cent complained of suffering the most from legacy systems, 23 per cent from a lack of interoperability between internal systems, 12 per cent singled out disjointed access to rails, and 13 per cent warned of limited in-house IT resources,” says Rotzer.

The results would indicate that companies feel they are keeping pace with regulations, mandates, and industry best practices – or, at least, consider their strategies to be along the same lines as those of the competition.

Only 20 per cent of respondents were sceptical of their firm’s transformation progress, and Rotzer questions whether the confident majority may be underestimating the challenges ahead. He was also surprised to see that the interest in scalability was low (seven per cent), considering how intricate roadmaps are becoming and the augmented need for top-down buy-ins.

In his eyes, outsourcing a winning architecture remains an ideal, cost-effective way to combine solutions for all of the above.

“Studies and results show that partnering with a SaaS provider benefits these key activities: deadlines can be met, extra traffic from new payment rails can be managed, and the resulting internal infrastructure becomes smoother, in turn lowering costs and allowing for further revenue to be generated from additional services,” says Rotzer.

In one area of payments, at least, he has seen positive progress.

“When looking at the global landscape of B2B payments, I see an increased number of banks moving away from the ‘on-premises solution mindset’ to favour leveraging new SaaS propositions,” says Rotzer. ”I hope this decision-making trend continues because, as the global reliance on digital banking increases, so will the demands on financial players. SaaS, ultimately, allows companies to continue meeting the needs of the customer, which is a defining trait of competitiveness. My interest is in seeing the landscape thrive through this.”

Bottomline’s The Future of Competitive Advantage 2023 report will be launched at Sibos in Canada in September.

This article was published in The Fintech Magazine Issue 29, Page 59