Interview: Martin Coen, CEO of Dovetail
Payments software vendor Dovetail is one of the very few independent fintech beacons in the industry, having not fallen into the hands of a large tech conglomerate. The company pioneered the concept of a “payment services hub” – before analysts coined the term – and has maintained double digit growth over the last decade. So what’s next? Banking Technology talks to Martin Coen, Dovetail’s CEO.
With clients including Deutsche Bank, HSBC, JP Morgan, Bank of Montreal, Intesa Sanpaolo and ING, and its software used for processing tens of millions of transactions per day worth trillions of dollars – across everything from global securities settlements, large-scale corporate collections and disbursements through to SME and retail payments – it would be fair to say that Dovetail has earned its place among the global payments tech leaders.
From the outset, the company’s culture has been that of innovation, emphasises Coen.
“We pioneered fully integrating item-level, real-time processing of high- and low-value payments; we pioneered online personalisation of processing for product segments as well as individual customers and accounts; and we pioneered synchronous as well as asynchronous interaction with end customers onto the same business logic and state – supporting full omnichannel banking,” he states.
“Unlike others, we have focused on organically building a clean modern infrastructure for payments – not acquiring older applications to expand our capabilities in ways that would only replicate the silo limitations already suffered by banks.”
With the real-time payments putting even more pressure on legacy bank infrastructures and the increasing focus on digital transformation at a strategic level, the demand for modernising middle and back office payments infrastructures is growing rapidly.
Solutions for these increasingly outdated infrastructures might not be the most glamorous of technologies, but they are the backbone of any genuine tech renovation initiative. So, Coen points out, being truly customer-centric, real-time, agile and able to integrate with internal and external systems, processes and services is not possible without a modern processing engine.
“A digitally enabled back-office designed for this purpose is essential,” he states.
“We are now seeing digital transformation strategies providing the necessary framework/blueprint for business cases in back office payments renovation.”
And there are increasing numbers of successful case studies that demonstrate what is possible. “We’ve implemented synchronous APIs for banks to offer real-time interactive services to their customers as well as enabled bank relationship managers the ability to customise product offerings for individual clients and accounts”.
Walk the digital walk
But whilst everybody is talking the “digital” talk, are they walking the walk?
“We have seen significant transformation in segments for non-bank financial institutions and multi-nationals, more recently in retail, and now in large and medium size corporates segments,” Coen observes.
“But digital overhaul for banks is still in its early stages, especially in the way banks address the wider corporate market.”
Perhaps this is because the undertaking is harder than it first appears, he muses. “Banks will need to deploy innovative products more rapidly than ever before while maintaining robust and secure operations and compliance.”
Payments are the lifeblood of commerce, with entire national, regional and global trade and commerce relying on payments to function, from making salary or pension payments, to collecting utility direct debits, to settling securities trades, or enabling a cargo ship to dock in a port.
“Some of our clients move trillions of dollars in value a day and the exacting requirements of their customers put a huge focus on payments and any changes to this environment.
“So for them – and for their customers – reducing payment processing from hours to seconds and increasing STP rates by over 300 basis points using adaptive repair makes a great difference.”
The speed of change
“The exciting thing about the speed of change in payments right now is the sheer breadth and scale of the projects on the horizon,” Coen says.
“We have recently taken multiple orders for replacing large-scale legacy batch ACH systems in the US.” Thank the country’s real-time payments drive for that.
“We are also seeing the mainstream adoption of the public cloud for payments now a reality, with one of our clients about to move their entire wire operations to it.
And finally, banks around the world “are realising they need to move to a full 24x7x365 payment capabilities” – which translates into ample business opportunities for Dovetail.
“Overall, the next few years will be an exciting time for the payments industry and Dovetail.”
This interview is also featured in our flagship Banking Technology magazine, the September 2016 edition. Read it here.