It was also a get-to-know-each-other event, with us looking to understand what MFIs in Romania are looking for from a solution provider and MFIs interested to find out how Allevo can help. Participants said MFIs are looking for something new to be implemented on the Romanian market, something that can be truly useful for both the institutions and their customers. And we were happy to hear they believe Allevo can help them be more creative and even surprise their customers with new services.

Don’t forget, if you are a Micro-Finance Institution in search for a solution to optimize your operations and you missed our workshop this week, just contact us.

Allevo, Sibos exhibitor for the last 7 years, hosted the debate “Financial Infrastructures for Public Administrations” in the Open Theater space. The session focused on rationalizing the state’s payments service. Alina Enache, Allevo Sales Manager and Mihai Guiman, Vice-president FINkers United, jointly presented how using specialized open source software applications leads to streamlining the operations of public institutions, to mitigate their operational risk and to offer a platform to scale-up delivered services. More precisely, they talked about an open source solution (FinTP) for managing public payments, architected as a service and hosted by a governmental private cloud.

A couple of years ago, Allevo embraced a major cultural change by deciding to depart from the controlled distribution of the company’ software applications, and choosing instead to freely share them. Allevo believes that this business model shift will alleviate the partnership in complementarity, will create a shared innovation platform for processing financial transactions along the entire supply chain, and, not least important, will potentiate the fundamental value of business ethics in intellectual property (IP) related trades.

There is a smaller adoption rate of open source software at the application level in the financial industry compared to other critical industries such as health care, education, automotive or utilities. Still, Allevo banks on the chance that market players (both solution providers and beneficiaries) will evaluate how they can architect their operations based on the freely available FinTP, the financial transactions processing application published into open source. Another important driver relates to financial institutions’ (FIs) business model. If, for instance, financial inclusion is their core business, than commodity solutions become instrumental in achieving the right level of accessibility.

Countries with a poorer level of banking services or with a less mature banking system can be subject to governmental policies or investment to enlarge financial inclusion. Furthermore, governments – which are generally speaking the largest corporation in a country – ‘employ’ (directly or indirectly, the latter including retired persons, beneficiaries of subsidies or social assistance, etc.) massively: in some cases up to 30% of the population is on their payroll; this in itself represents a powerful enough reason to look for better efficiency of their own operations.

Based on a fruitful partnership of over 10 years between Allevo and the Romanian State Treasury, during which we handled their most important financial operations, led us to conceptually develop this into a full-fledged solution. This Open Theater session at Sibos addressed a proposed solution that centrally manages all public administration payments – which can be extended to tax collection, public debt or public funds management.

Unlike corporate or banks’ treasuries, the State Treasury is a zero risk operation, where any solution should ensure human error containment. Furthermore, functional, technological and highly scaling (according to the evolving needs) data repositories should be warranted, while transparently interoperating with the business community’s members (i.e. with FIs).

Our solution is built around FinTP, architected as a service hosted by a Governmental Private Cloud, as depicted in the picture.

What if open source software and principles were used more extensively in FinTech? Imagine a bank powered by an IT infrastructure made up of free open source software. How would this differentiate them from a financial institution that buys licenses from vendors who provide proprietary state of the art software that needs to be integrated, kept aligned to standards and regulations, and operated flawlessly with the rest of the applications that form the system?

And this is what we tried to find answers to during BOOST – Banking On Open Source Today, the community session we organized at Sibos. To help us with the debate, we invited Mircea Mihaescu, Director Technology Research Center, Sberbank,  Mr. Matteo Rizzi, Partner, SBT Venture Capital, Mr. Radu Gratian Ghetea, President CEC Bank, Mrs. Rodica Tuchila, Director Romanian Banking Association and our new CEO, Corina Mihalache in the panel.

As outlined by studies conducted by Black Duck or other similar entities, people in the audience agreed there is a good chance such a platform would evolve much faster than systems that get left behind due to the existence of deprecated or obsolete software, derived from code often written by people who are no longer part of the company, code that nobody wants to touch, or due to the low update frequency of apps that are part of the solution. Open source software, like Linux and its famous Android sibling, Eclipse, Hadoop, MySQL or FinTP, is usually backed and maintained by those who create the project and, by its open nature, it gets to benefit from contributions of any party interested in enriching or rethinking bits and pieces of the code. This is a non-intrusive approach designed to encourage collaboration, creativity and idea generation in a community that’s open and transparent.

In FinTech, such a complete platform could serve as the base for creating a new standardization layer that goes beyond mere standardization at message level. By standardizing the way applications process financial instruments and, more generally, transactions and the way they interact with one another, back-offices of banks and treasuries of corporates, of governments and of other public administrations could achieve a semantic interpreter that can talk finance to their peers.

Despite the omnipresence of open source, it has still not gained sufficient popularity in banking and in financial services. The first application that can process financial instruments and transactions in general distributed under free open source license is FinTP published on www.fintp.org, its source code being hosted on github.