Russian market of bank informatization
Article is included into the IT overview in banks 2018
Suppliers of IT and cybersecurity for banks, the card of the market
In April, 2019 the analytical center TAdviser issued the "Information Technologies in Bank" card on which it reflected structure of key processes of banking business and noted the IT companies developing products and rendering services for digitalization of these processes. The card covered 270 players of the market – 230 suppliers of the IT products applied to digitalization of basic processes of banking activity and 40 developers of solutions for information security support  (more detailed).
Banks spent 20 billion for the SMS and pass to push-notifications
In 2018 banks in Russia spent for mailing of Sms in total 20 billion rubles, counted in AC&M Consulting company which data were provided at the end of May, 2019. Against the background of growth of operator rates credit institutions more and more actively master push-notifications.
Banks pay the cellular companies for sending everyone the SMS. For the last few years the cost of one such message grew 0.03 to 0.7-1 rub, two market participants at the end of May, 2019 told RBC.
For clients the service of push-notifications costs as much how many informing through the SMS (in some banks this service is free). At the same time mailing of messages through push channel costs banks cheaper.
The share of push-notifications from the total number of messages (about 30%) which the bank sends to clients appeared the highest at Alfa-Bank. Raiffeisenbank has a ratio of push-notifications and Sms makes 1 to 3, at Otkrytiye bank the share of push-notifications reaches 25%. At Sberbank the indicator is about 20%, the Moscow credit bank has 15%.
To advantages of this technology refer its free of charge (a number of banks saves from 15 to 25% of costs for the customer notification thanks to push-notifications) and also a possibility of transfer of bigger information volume thanks to adaptedness of service to mobile devices.
However completely banks will not be able to refuse SMS mailings, the analyst of AC&M Consulting Oksana Pankratova says. For sending push-notifications three conditions should be complied at the same time: the presence at the client of the smartphone installed on it the application of bank and connection to the Internet.
| ||In Russia penetration of smartphones makes about 70%, and there are many places where the mobile Internet therefore the push channel does not give a 100 percent guarantee of delivery of the message does not work — the expert explained.|| |
In the relations between software developers and banks there came the change
Against the background of digital transformation in banks the developer of solutions for the financial sector of Diasoft began to be transformed and itself, passing from vendor model to consulting, the chairman of the board of directors of the company Alexander Glazkov in February, 2019 told TAdviser. A task of vendor – to offer the market a product which for financial institutions would be many times cheaper than own development, he says. Earlier Diasoft it worked well. But for the last three years the situation changed: this segment became very much the innovation, and there are no mature ready-made solutions meeting requirements of digital transformation, in the market yet.
On ripening of solutions of a new class time is required, Glazkov considers. Therefore now vendors are forced to be built in process of transformation of banks and to be engaged jointly with them in development of solutions. At the expense of it the development component in projects of Diasoft significantly increased.
| ||We do not wait any more when the customer comes to us for the ready-made solution. It is already impossible, and this trend will remain as early as years 10 until there is a digital transformation. Now we should define his requirements together with bank and be built in development. It is more similar to consulting process, than to delivery of ready-made solutions, - Alexander Glazkov noted.|| |
He added that at the same time Diasoft continues to perform also functions of vendor, but it ceased "cling to the code". The code of the developed solution opens to bank. It bears big risks for vendor, but it builds up customer relations so that to minimize them.
Diasoft notes that quite recently banks tried to undertake practically all development of banking software, and it created difficulties for business of software developers. But as a result banks did not manage to make it, and now they began to resort to services of the third-party companies more again.
| ||Technologies should grow ripe at first is time. Secondly, internal development has no such motivation on efficiency as at the third-party developer. Therefore after attempts to undertake development, to build from scratch, banks began a thicket to address suppliers of technologies again. Our business in 2018 grew by 30% on this wave. Further banks and will continue in-house development, but at more active vendor interaction of the application software, - the chairman of the board of directors of Diasoft considers.|| |
World analysts, Gartner, in particular, speak about relevance of the idea of 2-speed architecture which cornerstone the product accounting systems which should be changed for digital economy are. Historically they were created in order that in them employees of the bank worked - it is the functional systems for workers, Glazkov notes. And within digital transformation demand for systems in which the process architectural approach – both for customer service, and in an operational part is implemented grows in banks. Now employees are transferred to processes.
Such products for customer service, note in Diasoft, banks began to implement within digital transformation few years ago. It pulled for itself need to remake and the accounting systems because now they should service not employees of the bank, and to work for support of processes, Alexander Glazkov says.
| ||For example, when we did the project in VTB on a mortgage - it is a frontal system, our costs for integration with a back office were the biggest. It is because the back office was not suitable for digital transformation, it it is necessary to remake. And it is the following wave in banks for which we prepare because similar "weights standing" prevent digital transformation. The frontal systems require change of all IT landscape, - Glazkov explains.|| |
One more trend in the field of bank solutions in Diasoft call microservice architecture. The first versions of the products making a solution stack for microservice architecture appeared less than 5 years ago, Glazkov notes. Then it became suddenly popular, and now practically all banks want to have only such stack. It is possible to carry to it, for example, the Open source software of Kafka, Kubernetes, Docker, etc.
| ||At first it seemed that it is hype, but as a result these products gave fantastic effect, meet expectations and risks. And they force us as vendor quickly to be rebuilt on a new technology stack according to architectural transformation. Vendors of banking software which do not do it just will not survive in the market, - the chairman of the board of directors of Diasoft says.|| |
Growth of the financial technical-market by 12% to 54 billion rubles is Deloitte
In October, 2018 the consulting company Deloitte published results of a research of the Russian market of financial technologies. Experts expect the 12 percent growth of this market to 54 billion rubles at the end of 2018.
According to Prime business news agency with reference to data of Deloitte, 76% of the companies are positive for current market condition in terms of financial wellbeing of business. 60% of respondents with optimism look at market development perspectives.
Since the beginning of 2017 on October of the 2018th in the Russian market of financial technologies 17 bargains for the total amount of 19 billion rubles were concluded. Average age of the company working in this sector is 3 years, and the average number of employees in one company — 15 people.
To number of the factors promoting growth of the financial technical-market, experts refer the growing demand for services of a vrossiya, activity of the regulator as a result of which infrastructure and also dynamism of the offer — regular entry into the market of new products and services forms.
In the Russian Federation payments, money transfers, scoring (solvency assessment) and crediting are among the most popular financial technologies. Market participants connect big perspectives with artificial intelligence, machine learning, predictive analytics, deep learning and Big Data.
Among the main barriers interfering market development of financial technologies — unattractiveness of the sector for external investors, low solvency of the population and geopolitical risks.
Deloitte notes that financial technologies in Russia develop unevenly. So, disruptive projects are available mainly to residents of million-plus cities or clusters where they purposefully develop technology infrastructure and accustom people to use it.
Situation in the market
In the Russian banking sector decrease in quantity of financial institutions continues. 2017 showed that problems are not only at small or average financial institutions, but also at such large players as Yugra bank, B&N Bank, Promsvyazbank or FC Otkrytiye. Among the acting participants of financial market competitive struggle gain is noticeable that is expressed as in attempts to provide more advantageous conditions on main products, and in the form of offers or services not from the financial sphere from the affiliated companies or partners.
| ||At the moment in the market of bank informatization among large financial companies implementation of "pent-up demand" for IT projects about which spoke a few years ago became noticeable. The projects frozen in 2015-2016 are reviewed for the purpose of their start in the current conditions now, - Anton Golovaty, the director of business development LANIT-Integration notes (enters into Lanit group).|| |
If to speak about small and medium financial institutions, then a situation completely return. Freezing of projects and minimization of maintenance costs of IT infrastructure and also transition to open source options and attempt of the solution of the majority of tasks by own forces is visible.
| ||Most likely this trend will remain in the next few years and it is quite possible that we are waited by further enlargement of the market. Similarly also risks with which we live the last several years will remain: gain of pressure upon a financial system of the country and sanctions to leaders of financial market. Both risks can lead to more detailed consideration of alternative candidate solutions of standard tasks, - Anton Golovaty considers.|| |
According to Pavel Zubkov, the director of the department of work with financial institutions of AiTeco company, the market of informatization in the Russian banking sector is in a stagnation stage, excepting national banks and certain retail players.
| ||In my opinion, there is a transition from the strategy of active development of IT infrastructure to the strategy of preservation and maintenance in working order of the current IT perimeter. As for forecasts for the visible future, everything will depend on economic country situation in general. I can only tell that growth of a share of insourcing and import substitution in the financial sector in the next years will continue, - he tells.|| |
Yury Teryokhin, the director of work with financial institutions "The swagger is Development center" (FORS Group), believes that between large and small banks the gap caused both by the excessive concentration of assets in TOP-10 banks and which is planned in CENTRAL BANK reform of banking licenses - division of banks on large federal with the full license and small regional with the limited license will even more go deep.
Small banks, according to him, will attract clients with the offer of more advantageous conditions and products without additional costs on automation. The main IT costs should be expected from large banks and mid-sized banks from TOP-50. They will also be "engine" of innovations in bank informatization, the representative of FORS believes.
Rapid stratification of the market of bank informatization against the background of reforming of the industry is noticed also by Yulia Amiridi, the deputy CEO for business development of Intersoft Lab company.
| ||The competition between the large state-controlled players, such as Sberbank, VTB, Rosselkhozbank who are temporarily "nationalized" FC Otkritie, B&N Bank and Promsvyazbank by subsidiaries of foreign banks and several largest private banks of the country continuously stimulates growth of investments into IT. At the same time other market participants not so successful and the deprived financings at the expense of the state, are forced to tighten more tightly belts and not the first year to minimize IT budgets. As a result the technology gap between top financial institutions and other banks continues to grow, - she explains.|| |
Revenue of the Russian IT companies from projects in banks
|' '1 V of Technoserv Group enters Technoserv Consulting company which revenue from IT projects in banks makes 1,327.5 million rubles for 2017 and 1,251 million rubles for 2016.||TAdviser 2018|
|' '2 Revenue from integration projects, including deliveries of software and the equipment
|' '* Revenue from projects in banks, insurance and investment companies. Data are provided after the publication of rating
Current status and perspectives of bank informatization
As for a current status of bank informatization, according to experts the main business processes are automated in all banks. At the same time, the analytical systems are actively applied, special attention is paid to information security, use of data centers goes deep, and in large banks Big Data technologies are used.
According to Yury Teryokhin, the director of work with financial institutions "The swagger is Development center" (FORS Group), in the next two years, systems which are automating not basic functions of banks, but their surrounding landscape and an inner pattern and positively affecting efficiency of primary activity will be improved generally. They are already used by banks and are at the ascending development stages:
- regulatory functions: Basel, IFRS, asset-liability management,
- information security,
- integration with external suppliers of additional services,
- profound process automation of decision making which in banks in the advertizing purposes is called "artificial intelligence" (AI); transfer of a part offline - processes in online.
| ||The main IT costs of banks, in addition to costs for maintenance of the existing systems will also fall on this direction. Generally it is custom or own developments of banks that will give the chance to enter the market of bank automation to the IT companies from the non-bank sphere. Besides, it is expected that within the next 2 years the bank of "bad" debts which will demand specific automation for work with toxic assets that will also demand accomplishment of custom developments will be created, - he considers.|| |
Alexey Katrich, the commercial director of the company "Technoserv Consulting", assumes that identification of the person becomes key function of bank retail gradually, and banks turn into confidential partners at transactions.
| ||Today development of new technologies — cryptography, biometrics — allows to transfer function of the entrusted agent to digital space. For this purpose there are different technologies, including a blockchain. All this leads to tectonic shift in banking when financial companies begin to pass from the b2c model to the b2b model. There is a concept of bank-as-a-platform — banks reserve function of control of the main bank risks, function of a guarantee of safety of deposits, but all relations with the outside world begin is under construction through an open architecture, through API that allows the external organizations to be connected to the bank platform. Many products turn into the products white label. And now you can purchase financial services at the checkout of the retailer or at gas station, - he explains.|| |
Maxim Bolyshev, the associate director of department of banking software of RS-Bank of R-Style Softlab company, speaks about the continuing market digitalization. He notes that banks become more "smart" — there comes smart banking time. Requirements to saturation of remote links and quality of the provided services increase, banks pay more attention to collection of data on clients, their processing, increase in speed of decision making and development of offers. There are more demanded systems using artificial intelligence, machine learning and Data Science.
| ||In the next two years we not only will see departments of banks without personnel, but also we will be able to become the client of bank, without coming to department, - he predicts.|| |
Andrey Gorshkov, the director of the department of network integration of AMT Group, notes that due to reorganization of a bank segment and enlargement of financial institutions there are changes in information and information communications systems.
| ||For the purpose of simplification of operation, reduction of operating expenses, lease of communication channels at consolidation of banks there is also consolidation of banking information systems, processings, telecommunication infrastructure and communication channels, unification of technical solutions at all levels. Taking into account that these solutions are constructed, as a rule, at different times on the different principles, works on consolidation require careful planning of all actions in the course of migration from old on the new unified solutions. Upon transition usually give preference to the centralized model when all main information resources and, respectively, telecommunication nodes are located in several geographical and spaced reserved DPCs.|| |
Yury Vostrikov, the commercial director of NORBIT (Lanit group), tells that technologies provide to banks of advantage in fight for the client. The banking sector changes quickly enough therefore flexible completions of functionality long ago of the implemented systems, including CRM became demanded. For example, many banks complement the CRM system with new tools which can simplify communication with clients and partners, to exclude loss of leads and also more effectively to use client data.
| ||A specific place among automated information systems already now is held by mobile applications and Internet banks. Due to further digitalization the share of online transactions will grow. It will demand from banks of more careful relation to remote calculations and data security about the user. Banks in fight for the client will use digital technologies to the maximum. Therefore the role of the divisions which are responsible in banks for IT-Innovations considerably will grow, - the expert says.|| |
In general, according to him, a lot of work on implementation of the large-scale projects connected with the program of development of financial technologies till 2020 provided by the Central Bank is necessary to banks. In the nearest future the cryptocurrency and a blockchain will get under legal regulation, and many financial institutions will include digital transformation in the strategy of development of the business.
Mikhail Golovachev, the CEO Amtel-Service, speaks about stagnation in the market of bank informatization at the expense of a counterbalance of negative factors, such as reduction of number of banks and rather difficult economic country situation, and drivers of the market, such as Big Data, Machine Learning, cybersecurity, including biometric identification. As result – considerable decline in demand for the IT equipment and infrastructure projects, and at the same time, continuous growth in the sector of information security and also growth of interest in IT services, including to clouds, outsourcing of IT and cybersecurity of functions.
| ||The general dynamics of the Russian market of bank informatization according to the results of 2017, according to us, does not exceed 5-10%, at the same time growth in the directions of cybersecurity and сервис&аутсорсинг - more than 20%. In the next years we predict similar dynamics at the level of no more than 10%, mainly at the expense of the largest players of the banking sector and also pragmatism and restraint of less large financial institutions, - Mikhail Golovachev noted.|| |
According to Sergey Sherstobitov, the CEO of Angara Technologies Group, at many banks in Russia already very saturated IT infrastructure, at the same time, in the company note decrease in rates of bank informatization.
| ||In the next two years the most part of cybersecurity projects in large banks will be focused on development of the internal centers of information security monitoring (SOC), and for mid-sized and small banks transition to service model and a transfer of the maximum number of IT and cybersecurity services to outsourcing will become the main trend that will allow to optimize considerably costs and will increase quality due to profiling of these services at professional contractors, - he tells.|| |
At the same time explicit process of consolidation of bank assets will continue therefore, according to Sergey Sherstobitov those banks which will be able quickly to attach to themselves new and unlike financial structures in the organizational and technology what landscape will become the most successful.
He also adds that the current transition of banks to "digit" will urge on development of a segment of mobile applications and chat-bots which are aimed at improvement of customer interaction and the maximum personalisation. The flexibility and convenience of online interaction with partner bank will become a decisive factor of the choice of services of specific bank the client.
Konstantin Usakovsky, the deputy commercial director of Aplana Group, considers that the bank industry in Russia practically reached the universal level of informatization. At the same time the competition of banking products and services became so high that it is often difficult to end consumer to select advantages of one or other bank.
Stages of centralization of IT systems and global optimization, according to him, already behind. Central Bank rate on restructuring of this market leads to the fact that a large number of tasks of informatization comes down to integration of different bank information infrastructures, the choice of optimal solutions and models. "Permanent" issues on updating of infrastructure, increase in level of reliability and availability of services, decrease in time of an entry of products into the market are in parallel resolved.
| ||In the next two years the trend of development of providing banking services through remote links without visits to departments will proceed, infrastructure for carrying out non-cash transactions will develop even more actively, - he foretells.|| |
Alexey Trefilov, the director of ELMA, notes that they in respect of technologies of Russia and CIS often decently lag behind the western colleagues, however in the financial industry we develop on an equal basis with the advanced countries, being ahead of many in Europe.
| ||There still not bad big and clumsy banks with outdated services feel. At us they quickly would lose competitive struggle if had no this or that monopoly, - the expert believes.|| |
In Russia, according to him, among banks there is an active "race of arms". There is also demand for qualitative products, and the offer from vendors, and high expectations of consumers. Nobody is able to afford to issue the bank guarantee for weeks — today everything should be done quicker, he explains.
| ||The forecast for the next two years — competitive struggle will amplify, will become tougher, and all will benefit from it. First of all, the consumer who will receive even more high-quality service, - Alexey Trefilov adds.|| |
Vadim Shustov, the deputy CEO of Jet Infosystems company, says that the Russian banks continue the movement from old, classical model of work with clients through cash desks today – to new digital formats. First of all it happens due to full-scale development of instruments of digital-banking and bigger informatization of processes of service in departments.
| ||This trend concerns strong players of the banking sector – representatives TOP-20. It is obvious that they in the next two years will continue the technology growth. The others owing to budget restrictions will be focused on certain client segments and to be guided one survival more and preserving of the available base, - he believes.|| |
Alexey Kolesnikov, the sales director of iSimpleLab, speaks about growth of the market of bank automation, connecting it with the fact that banks change the concept of work and conduct search of new sources of income.
| ||"Digitalization" of banking services becomes the main driver now. For this reason on the next two years we do not predict decrease in demand for such services as systems for remote servicing of clients and services which develop based on remote channels, - he says.|| |
The trend of growth is seen also by Yury Goltser, the technical director of the department of CRM of Navicon company. According to him, the banking sector, being dependent both on increased requirements of the regulator, and on the growing customer needs, one of the first in the Russian economy reacts to emergence of new technologies.
According to it, one of the main innovations which try to implement in the Russian banking sector right now, – remote identification of clients using the Single Biometric System (SBS). It allows banks to implement the strategy of completely digital banking, at last.
| ||We expect that in 2018 the leading banks will begin to implement gradually it in the processes. The share of products for which the digit will be the basic and even only channel of providing will increase: first of all, smartphones and other "improvised" devices, - he explains.|| |
Also banks continue to experiment with Big Data and artificial intelligence. The field of their application is extensive, and banks try "grope" where such innovations will be most effective. So far such spheres as personalisation of products, services and communications with clients using predictive analytics and also use of speech technologies, voice and chat-bots, implementation of decision making support systems and robotization of internal processes (RPA) are in the lead.
The most perspective in the current conditions Yury Goltser sees technology of robotization of business processes. Banks actively invest in the technologies allowing them to reduce costs – and by means of program robots they can significantly reduce costs of employees for accomplishment of the routine, repeating transactions (document creation and exchange of them, formation of diagrams and changes, registration of holidays). RPA already helps large foreign and global banks to minimize or even to exclude human intervention in accomplishment of tasks and acceptance of management decisions – and, respectively, to increase operational efficiency up to 70% growth. Gradually the trend gets accustomed in Russia, he notes.
Artem Gavrichenkov, the technical director of Qrator Labs, tells that on a status of information infrastructure banks - not only Russian, and both foreign, and international - are divided into two categories. Some of them pass through a hearth of digital transformation, converting the experience and examination in banking into conditions and requirements of the modern consumer; others arose in new quality at once, and this new quality became their business card.
| ||It is difficult to claim at the same time that digital transformation though is already fully completed somewhere. Despite external, often, lightness of software tools IT, process of migration from infrastructure of former generation on new generation it is always expensive, is not fast and problematic. However within the next two years we have the right to expect the mass finish of these procedures then the first category considerably will lose in number, - the expert is sure.|| |
| ||It is already visible how financial companies of new generation will look. It in the first and also in the second and in the third queue - the IT companies, with the certain specifics including, for example, increased requirements to information security, privacy and protection of user data. However in general any qualities inherent to the IT companies will be present at banks considerably that, naturally, will demand (already requires) from the last to refuse a number of habits and features of corporate culture, - he adds.|| |
Barriers of the market of bank informatization
At the same time, the tendency to creation of home software companies servicing requirements of the leading credit institutions on an uncontested basis is capable to lead to decline in quality of software and IT services already in the nearest future and to reduce rates of their informatization.
| ||But even on this background it is difficult to predict some technology breaks among the smaller banks living in the mode of tough IT economy. They are concentrated on maintenance of operability of the current IT infrastructure and requirements of the regulator and minimum invest in IT, selecting the projects with fast return aimed, first of all, at cost reduction and growth of profitability, - Yulia Amiridi says.|| |
Maxim Nikitin, the vice president of Maykor, the CEO of BTE (BTE), adds that the Russian financial sector not always manages to pick up the last developments and to timely implement them in operational process.
| ||The matter is that traditionally the most favorable environment for development of implementation of new technologies is the flexible decentralized business. At us in the country such organization type of business actually is absent. Besides, legal regulation in the development areas and use of the latest technologies considerably lags behind in Russia that also slows down process. In addition, it is necessary to take into account the fact that for technology breakthrough any sector needs investments which in view of a difficult economic situation should not be expected in the nearest future. With respect thereto, we assume that in the next two years implementation in banking activity of technology new products will moderately happen, - the vice president of Maykor tells.|| |
Status of the Russian market of bank informatization in 2016 and the forecast for 2017-2018
The Russian market of bank informatization has not the best times. Most of respondents of TAdviser of experts speak about stagnation or decrease in market size. The main part of projects represent support and development of earlier implemented systems now, or are directed to optimization and cost reduction (is more detailed...).
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