Fintech giant Finastra launches centre of excellence with focus on banking at Hong Kong’s Cyberport
Vista, Finastra’s owner, is targeting more acquisitions in Hong Kong and the mainland
Financial technology giant Finastra launched a “centre of excellence” focusing on the future of banking in Hong Kong’s Cyberport on Tuesday.
Robert Smith, the chief executive of Finastra’s parent, private equity fund Vista, said the new centre would not only provide a way of presenting Finastra’s technology to potential clients, but also be a means by which Vista can identify new businesses in which it could invest.
Vista, which has US$30 billion under management, invests in companies in the enterprise software industry, and its firms employ 10,000 staff members in Asia.
“At the centre, we will see 200 to 300 new companies in the area of fintech, which no one else will have a look at, and we can see how they could get involved with our ecosystem, either as partners or as acquired companies,” said Smith, also Vista’s founder and chairman.
Vista is an active acquirer, and Smith said it had acquired just over one company a week in 2017.
He also has ambitions for some bolder targets.
“There are some enterprise software companies that live inside Chinese state-owned enterprises, which, if they decided to become third party software companies, would be huge. The question is how you take these businesses and move them out, but we have done more carve outs than anyone else on the planet, so I hope we would be a part of it,” he said.
The announcement of the centre also provides a boost to Hong Kong, and Cyberport, sometimes described as a white elephant project.
“We hesitated a lot about where to launch our first centre of excellence in Asia, but we believe that Cyberport is a very interesting location, as it gives access to a wide range in terms of fintechs. And, as Finastra has a large business in China, Japan and Korea, from a geographical point of view it made sense too,” said Imad Abou-Haidar, managing director, Asia-Pacific for Finastra, which describes itself as the world’s third-largest fintech company.
Software companies have long provided services to financial institutions, but are now moving more into the spotlight as financial institutions look to open up more of their systems to external providers.
Last week the Hong Kong Monetary Authority, Hong Kong’s banking regulator, published a consultation paper on open application programme interfaces (APIs) in the banking industry, asking for comment from industry players.
However, while the paper said banks welcomed the idea of opening up their systems to external players, only one bank in Hong Kong had opened some APIs to external players, nine planned to but had not done so yet, and 10 that did not have a road map.
“I would not be surprised if we are somewhere around those numbers for the rest of the region,” said Abou-Haidar. “But as there is an ability here to leapfrog and move very fast away from legacy technologies, I would anticipate institutions in the region will move very fast.”