Founded in Minsk, Belarus and Princeton, New Jersey in 1993, EPAM Systems has grown to become a 33,000-strong software engineering company that combines technical know-how with business experience to help customers stay competitive as they embark upon mammoth digital transformations.
Today, with customers in over 25 countries, EPAM is considered one of Fortune’s 100 Fastest Growing Companies and has been on Forbes’ 25 Fastest Growing Public Tech Companies every year of publication since 2013.
A significant part of EPAM’s operations sits within the financial services – including five of the 10 largest investment banks. “The payments space is being massively disrupted by new technology and it’s a good place for EPAM to develop ideas,” says Alistair Brown, Global Head of Payments at EPAM.
Prior to joining EPAM in 2015, Brown worked at financial services giants American Express and Mastercard, so has seen first-hand the issues faced by large organisations as the payments landscape evolves. While problems were easy to find and some innovation could take place, it was tough to implement improvements due to a lack of technical budget and implementation know-how.
EPAM developed its ‘consult, design, build’ model to help solve these issues. It encompasses every stage of FinTech execution, from pinpointing initial pain points right through to making solutions a reality. “First, we consult the large financial institutions – and smaller startups – as to what is happening in the space generally, what’s changing, and what the competitive landscape is like,” Brown explains. Having had these discussions, EPAM then works to “design a solution to the issues we’ve unearthed”.
The “killer”, as Brown calls it, is EPAM’s ability to implement this solution thanks to the thousands of experts at its fingertips. “We’re in a great position to build that design; to make it happen.” The full complement, from design to build, is something the “domain is crying out for”, he says, especially since the majority of larger financial institutions spend most of their IT budget keeping the lights on, leaving little room for innovation.
One key change for EPAM to help its finance clients navigate is growing competition in the banking space. “We hear a lot about PSD2 and Open Banking, and challenger banks are having a go at an alternative bid that would be better for the consumer – who is now the centre of the whole journey,” says Brown. PSD2 focuses more closely than previous regulation on protecting the rights of the customer over their data. “Third parties are let into the existing retail banking system offering a better, broader range of opportunities for the consumer,” Brown explains, adding this will “kick off all sorts of technology opportunities”.
Despite the rise of FinTechs spurred on by a more open, competitive landscape, Brown points out that the majority of these companies have yet to turn a profit and are not yet considered the norm, with most consumers having a traditional incumbent as their ‘main’ bank which their salary is paid into. “The surprise is that despite the new tech, thinking and business models, people are still going back to the original ‘heritage banks’,” says Brown.
Looking to the future of FinTech, Brown is adamant that, as seen with PDS2, governments and regulators must support the opening up of the space and foster innovation, while at the same time placing the consumer front and centre. “This is very large-scale stuff, so solutions are only going to be found and implemented by consortia and organisations supported by the government at the very least, if not financially sponsored as well,” he comments. “They need lots of encouragement.”
The rise of FinTech, whether through competition or partnership, stands to impact society from top to bottom. A key side effect to the payments revolution – one which Brown hopes is a “direct, deliberate effect” – will be financial inclusion, which doesn’t just mean expanding banking opportunities across countries with traditionally poorer infrastructure, but also means extending finance here in the UK to small businesses, or individuals with little to no credit history. “The system is cheaper and more easily available, so the unbanked have a chance to be banked – and that is hugely exciting,” he notes.
More and more challenges will be thrown up for traditional incumbents as finance continues to open up and consumer demands evolve. It will be vital for such organisations to partner with tech companies who can not only innovate and understand issues, but, like EPAM, can make these vital changes happen – and fast.