What is Innovation as a Service and how to apply it to the financial universe?

Published on Jun 23, 2023.

reading time 11 minutes reading

As the financial industry continuously evolves, the capacity to innovate has become essential for keeping a successful and competitive business. In this context, Innovation as a Service has emerged as an effective response to growing demands in the industry.

 

IaaS-based solutions involve building a process for identifying, sorting and creating new offerings capable of going to market rapidly. After all, a growing number of users for all types of solutions—including financial ones—demands quick innovation and is interested in paying for services that are promptly on demand.

Therefore, Innovation as a Service can help companies from any industry to build and scale their own financial productsand services. That strategy enables organizations to focus on their core capacities, while leveraging third-party expertise to drive their innovation capacity.

In this article, we’ll discuss the benefits and challenges in adopting IaaS and how institutions can leverage the expertise from an expert partner provider to accelerate their innovation cycle.

 

Past versus present: The revolution of cloud computing and managed services

 

A few years ago, setting up a simple website to go live was far from being as easy task. The process involved leasing a physical space, installing ventilation systems, acquiring servers, contracting a dedicated link and setting up the entire operational system, database, applications, security, firewall, redundancy and backups.

Also, it was necessary to rely on a rather large team so that they implement it and keep it up and running. Not to mention the challenge in foreseeing demand and anticipating growth, while affording the costs incurring from an underused infrastructure. Indeed, it was quite a task to undertake.

It all changed in 2006, when Amazon introduced and marketed their cloud computingsolution. That might have been one of the greatest innovations of the century, changing the technology industry completely. That’s because cloud computing providers adopted the concept of managed services.

By taking charge of managing, monitoring, updating and continuously maintaining cloud resources, managed services allow companies to spare their first-party IT teams from dealing with operational tasks so that they can focus on strategic activities that actually add value.

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Cloud services: How do they work?

 

Since they first emerged, cloud computing services have grown so much and so quickly that they’ve become default for the entire global technology industry today. But what is behind that? Why is cloud computing so popular and so quickly?

Basically, cloud services have eliminated the need to worry about all the activities that don’t give you a competitive edge, although they might somehow add value to your final customers.

In other words, the cloud computing model provides processing, scalability and expertise, in a business model that is XNUMX% associated with the value you add, rather than the cost of components you have to afford. As an example, you don’t need to acquire a machine or contract a link; instead, you pay per gigabyte stored or transferred.

But why did we start this discussion by mentioning cloud computing? Because that model is essential for delivering Innovation as a Service once the cloud provides the infrastructure and resources required to offer innovation as a service for companies..

With cloud computing, organizations gain access a variety of innovating technologies and solutions in a convenient and cost-effective manner.

 

Read also |  Web3: Understand what it is and the changes it can bring the financial industry

 

What is Innovation as a Service?

 

The term “as a service” refers to something “as a service” – Acquiring as a Service , Crypto as a Service, Fintech as a Service – and is related to cloud computing technology. The main idea is offer a business model where services and solutions can be accessed remotely.

Putting it simply, a company chooses the service they’re looking for and pays for it, while a provider is responsible for the structure and tools required . At the same time, the client company can gain access to the service from any device.

There is a wide variety of choice for cloud computing as a service, such as the popular Software as a Service (SaaS), as well as Platform as a Service (PaaS) and Innovation as Service (IaaS).

With Innovation as a Service,a provider offers the entire solution ecosystem related to managing innovation. That is, companies can run their innovation processes by using third-party tools and services as a complete solution to that end.

The COO at Dock Henrique Casagrande talked about innovation as a service at the event Innovation Pay 2022. Watch the video below to learn more about it!

 

“As a service”: How is it different from outsourcing?

 

Since some companies already use third-party services in Innovation as a Service, you might be wondering about the difference between the “as a service” model and outsourcing practices.

Outsourcing involves contracting peripheral activities, which don’t add value directly to the business and customer. Also, the contract is based on a fixed model based on costs, rather than the value added, like a retailer contracting accounting and cleaning services.

On the other hand “as a service” involves activities that are XNUMX% related to your core business, adding direct value. It is a model XNUMX% aligned with your business, enabling your teams to focus on what gives you a competitive edge for your final customers.

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Why does the concept of Innovation as a Service go beyond technology in the financial industry?

 

For companies providing businesses with infrastructure in the financial service industry, cloud computing hasn’t only been an innovation for technology, but also for business models.

For companies providing businesses with infrastructure in the financial service industry, cloud computing hasn’t only been an innovation for technology, but also for business models. how to look at the issue and its solution”, says the COO at Dock Henrique Casagrande.

It is a well-known fact that cloud companies have abstracted the technology layer. But when it comes to companies in the financial industry, providers have additional layers that are even more complex to abstract and deliver as a service. It is important to consider, for instance, the stages for regulatory, compliance, financial and accounting issues and extensive licensing processes.

“Why would any company need to discuss collaterals with a credit card brand? Or why would they discuss an update on the Brazilian Payment System (SPB) catalog? Or the regulatory adequacy regarding new rules? Everything that doesn’t give a competitive edge for that client operating in the financial industry can be abstracted and delivered as a service”, says Casagrande.

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Read also | Buy Now, Pay Later: a model with huge potential in Latin America. And opportunities for your business!

 

Innovation as a Service: Applying it to the world of financial services

 

While great innovations don’t happen overnight, banks and fintechs can get stuck in the innovation cycle and never get to the execution stage.

In this context, Innovation as a Service can drive innovation effectively and efficiently, paving the way for developing financial services and products that are impactful and innovative.

An example is the Embedded Finance <span style="color:#fff">now</span>is an example of that, since it can benefit from Innovation as a Service by leveraging the innovative solutions and resources in place to improve financial service offerings embedded in non-financial platforms.

By relying on IaaS, neobanksfintechs and organizations from a variety of industries can provide a number of services that were once exclusively available to banks and financial institution, such as payment account, prepaid and credit card, withdrawal, deposit, transfer, bill payment, etc.

A Dock started offering that model for the industry in 2018, when we released Banking as a Service“Our digital banking operations were up and running within three months, by relying on our clients’ low upfront costs and lean teams. That wouldn’t have been possible if those clients did it all on their own. Now, our challenge is to take Innovation as a Service to a number of different lines of business,” says our COO Henrique Casagrande.

 

Drive your business with IaaS by partnering with Dock

 

The Innovation as a Service model not only enables companies from any industry to add financial services to their business strategy—without the need to become a bank—, but also ensures that innovation processes are conducted in record time and in association with consumer demands.

Dock is a provider in means of payment and makes their solutions in Banking, Cards & Credit, Fraud Prevention e Acquiring solution through Dock One, a unique Banking and Payments platform that companies can use to easily scale their financial transactions anywhere in the world.

See some of the advantages in relying on Dock solutions to drive your business below:

  • Regulatory issues, licenses and certifications under Dock’s responsibility
  • Business expertise, as Dock serves as a trust advisor
  • Quick time-to-market, within a few months
  • More time for your company to focus on your customer experience
  • Lower cost over building your own operation
  • Complete and flexible technology infrastructure

By partnering with Dock, banks, fintechs and companies unlock their business potential and accelerate their innovation cycle. Want to learn how to do it? Watch the video on Dock One:

 

Innovation as a Service: Takeaways from this article

 

  • The term “as a service” refers to anything that works as a service and relates to cloud computing technology.
  • Cloud services have eliminated the need to worry about all the activities that don’t give you a competitive edge, although they might somehow add value to your final customers.
  • There is a wide variety of choice for cloud computing as a service, such as the popular Software as a Service (SaaS), as well as Platform as a Service (PaaS) and Innovation as Service (IaaS).
  • Innovation as a Service can help companies from any industry to build and scale their own financial products and services.

 

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