The Choice of Plenty: Deciding the Right Technology Solution Provider

8th February 2021

Author: Ramgopal Subramani, Chief Operating Officer, Perfios

The last decade has seen the financial services sector of India undergo a transformative change. With the emergence of new-age technology solution providers or technology-driven start-ups in the financial space, established financial institutions have begun shifting from traditional legacy systems to partnership models with these technology start-ups. Apart from established financial institutions such as Banks, small NBFCs and Fintechs have also adopted these technology solutions to accelerate their digital business. This has provided them with better digital capabilities that enable them to reach and serve their target customers better. The collaborative approach has brought about a win-win scenario for both the FIs and the Fintech solution providers. The start-ups provide Financial Institutions with technological capabilities required to stay competitive in the 21st century, while the Financial Institutions provide the start-ups with the opportunity to enhance their product capabilities through the deployment of complex solutions and help improve their market positioning. However, as this trend of collaboration continues in the industry, it is vital for all parties involved to ensure that they have chosen the right firms to partner with.

Keeping this in mind, this article aims to delve deeper into the aspects that both FIs and technology solution providers have to keep in mind while choosing partners in the industry. It helps understand the different aspects to concentrate on while choosing a partner for an experimentation approach vs while choosing one for mainstream implementation. This has also been further elaborated through a case-based example of Perfios, a product technology company enabling businesses to aggregate structured and unstructured data, curate, analyze and help in decision-making.

Experimentation Vs Mainstream Implementation

The basic requirement behind partnering with a fintech solution provider is the need for innovative agile solutions that can improve the functioning of the financial institution and strengthen its position in the industry. With the change in the financial landscape, it is vital for organizations to adapt themselves to the changing customer needs and evolve their processes accordingly.

In the case of strategic solution requirements, banks and other Financial Institutions usually choose the partnership model rather than purchasing from a vendor as this ensures continuous support and engagement. Outright purchase from a vendor is often done in the case of ancillary solutions as it involves more risk but is often cheaper in the long run.

However, before approaching the solution provider, it is important to understand the level of support that the customer requires from a partner. During the initial phases of experimentation, the ability of the solution provider to experiment and customize becomes crucial. In this phase, the discussions will mainly involve the digital/innovation team of the organization.

As the experimentation progresses towards maturity, other teams like Business, IT, Infosec, compliance, and risk also get involved. Here, the strength of the partner lies in their ability to Scale, provide the right Security and Compliance and ensure Sustainability.

Bank/ Financial Institution: Choice between transactional vs strategic approach

The software requirements of banks or even Fintechs broadly fall under 2 categories, Core platform requirement and Ancillary Platform requirement. Core platforms, as the name suggests, are those that enable banks to run their core business. This includes an Onboarding system, Origination system, Loan management systems, Treasury management systems, Payment processing systems, etc. While the Ancillary platforms like Asset management, HR management software, Identity access management, Email solutions, etc help support the bank’s core activities and ensure its smooth functioning.

Some of the key factors that are taken into consideration by the bank or the Financial Institution while choosing a solution provider for mainstream implementation are

While the above-mentioned factors help understand the amount of support a solution provider can give your organization, it is also vital to assess the business risks involved in the integration. This can be accounted for by taking into consideration the following factors

1. Financial stability

a. Is an important indicator of the sustainability of the partner

b. Lack of fund will impact sustainable support in the implementation

2. Enterprise Credibility

a. The fintech’s solution provider’s vintage in the industry in terms of, customers in production, the volume of the transaction processed,      complexity, etc. can serve as a major indicator of the credibility of the startup.

b. The Number of referenceable customers and the list of long-standing customers that the fintech currently serves can also give an indication of this metric.

3. Scalability

a. While looking at a solution, the innovativeness of the technology becomes a moot point if the fintech does not have the capability to scale the product.

b. It is important to ensure that the software chosen has the ability to bear the required load in terms of number of customers even at peak timings.

c. The software should also provide the customer with an easy integration mechanism and Skilled resources for integrating with various Client systems

    4. Process maturity (Incident management)

a. A robust process in terms of customer incident management is to be put in place. This includes tracking mechanism, ticketing system, SLA, etc

b. Security incident Management systems can take care of security threats and data breaches before they compromise the customer data.

c. Streamlined process to ensure business continuity and prevent data loss in case of server issues

d. A well-defined mechanism of investigation and resolution in case of issues arising with integrated partners.

The cost of implementation is also an important component taken into consideration while choosing a solution provider. Due to the competitiveness of the market, the prices quoted by fintech players in the market are highly competitive and many a time financial institutions make L1 pricing (lowest cost) based decision, however, we have seen that the implementation always gets delayed and over the course of implementation as bleed for the solution provider increases, it becomes challenging to complete the implementation.

Who is the Right Strategic Partner?

Successful partners are those who share a common goal, understand each other’s vision, and have common metrics for success. They are invested in maintaining a long-term relationship and try to understand the organizational structure and technical capability that the customer currently has. They try to go the extra mile to ensure that their customers are satisfied with the product that is deployed.

 Case Study of Perfios: Creating Value for the customer through relationship led business model

Taking the case of the digital lending segment, which is one of the fastest-growing segments in the country, it becomes vital for the lender to have a captive audience in order to stay ahead of his competitors in the market. A captive audience is only possible if the customer has a seamless experience on the lending platform. This where having a robust Loan Origination and Loan

Management system comes into the picture. A comprehensive Loan origination system provides Customer onboarding, a simple mechanism to integrate with multiple channel partners, Workflow and vendor management modules, and an option to digitally collect and store customer documents. On the other hand, a Loan management system provides a method to track the number of loans disbursed, the loan payments that have come in and also provides a mechanism for reconciliation.

An example of one such solution provider is Perfios, a leading product technology company enabling businesses to aggregate structured and unstructured data, curate, analyze and help in decision-making.  They enable companies to build end-to-end solutions across various domains like consumer lending, SME lending, etc.  Through its platform InteGREAT, Perfios enables banks and other financial institutions to manage the entire loan process end-to-end. This includes tracking and monitoring applications and providing Financial insights for underwriting and decisioning.


Thus, before choosing a partner it is important to understand whether they can provide you with the right support not just in the immediate future, but in the long term as well. Having a shared vision, common goal and similar benchmarks/metrics for tracking progress become vital. Any misalignment in these parameters may become the root for business inefficiencies in the future. The strategic partner should go hand in hand in taking care of all the organization’s needs like Scale, Security, Compliance, and Sustainability, critical for the continued mutual success for both parties.

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