Software firm, PHL banks in talks for cloud-based technology use

INTERNATIONAL software company Oradian is currently in talks with several Philippine banks for partnerships on the foreign firm’s cloud-based technology to be used in the lenders’ core banking business.

Oradian’s chief said they are in discussions with several banks that are interested to use the firm’s cloud technology.

The top executive, however, noted they will only make their digital platform available to financial institutions that seek to close the gap in financial inclusion and whose target sectors are the unbanked Filipinos and small and medium enterprises (SMEs), among others.

“We are in discussions with other institutions right now... It’s both rural banks as well as commercial banks who want to tap that market and are looking for efficient tools to actually serve that market as they’ve realized their existing tools, which they use for their commercial banking space, they’re not efficient enough to serve these SME segment,” Oradian Founder and Chief Operating Officer Julian Oehrlein told BusinessWorld in an interview.

Asked if they are looking at sealing the partnerships by end of the year, he said, “We’ll see what they decide, but yes, we are confident. If we just continue doing what we have been doing, then we’ll be very successful in the Philippines.”

Currently, the Croatian technology company has already been tapped by 13 companies in the Philippines ever since it entered the country a year ago. These firms have been using Oradian’s cloudbased system called Instafin for their core business activities.

Under Bangko Sentral ng Pilipinas (BSP) Circular No. 808 or the Guidelines on Information Technology Risk Management for All Banks and Other BSP Supervised Institutions signed in 2013, the regulator mentioned of cloud computing as one of the emerging outsourcing models banks could use in their IT systems.

Cloud computing is a migration from owned resources to shared resources. Client users receive IT services, on demand, from third-party services providers or cloud service providers through the Internet “cloud.”

In July, Cantilan Bank, Inc., a rural bank, announced its partnership with Oradian, under which the lender will use the digital platform for its core banking operations, making it the first bank in the Philippines to use cloud-based technology.

The rural lender had said it sees a drop in its operational expenses as well as growth in its revenues by 2018 after it initially rolled out its cloud-based system in its operations.

Asked if they plan to encourage other banks to adopt cloud computing, Mr. Oehrlein said, “Yes... we’re continuing on the trajectory and continuing on the growth.”

However, he noted: “We’re not looking to work with the core business of Tier 1 banks… If they are planning to open microfinance operations — for example in rural spaces or for SME lending — then we’re open to partner with them for that specific space.” —