DEAR SHAREHOLDERS,
It is with pride I address you this year. I do so with a tremendous sense of gratitude to our
company’s employees across the world. I am delighted to be the part of this fantastic and dynamic
organization. The hard work and customer trust sustained stand testimony to the team work of our
employees.
As I look back on the last decade, we have witnessed a technological boom that has changed all areas of
life including professional, personal and social. The banking and financial services industry has not escaped
the transforming effects of rapid technological change. What was science fiction 10 years ago has become
science fact today and, technology has changed the way we perceive life and interact with each other. Some
members of the banking industry were reasonably good at adapting and integrating the technology changes in
order to better serve their customers. There is a significant number in the industry who failed to keep up
with the pace of change especially after the financial crisis as its attention was focused elsewhere.
On the other side, innovation was becoming a much reduced priority for the banks, technology index
started to become a game changer in everyday business. Leveraging the new age technology and exploiting a
regulatory regime that was, in many areas, quite permissive, Fintech firms began to offer consumers a totally
new way to deal with financial solutions - a way that was far simpler, faster and easier than what traditional
banks offered.
By bringing the innovative use of technology into the design and delivery of the financial services,
Fintech firms transformed, and are still transforming. Blockchain, Artificial Intelligence and robot advisors
are just a few examples of the innovations provided by Fintech firms. However, there is much more than just
technology and its integration into the banking system. The Fintech firms introduced exceptional customer
experiences, specifically in the most lucrative business areas that were typically offered by traditional
banks.
TRANSFORMING CUSTOMER’S JOURNEY
With all the noise in the market about technology - from AI to blockchain - it is easy to get carried
away with the hype. While technology is clearly important, we need to remember that customers remain at the
core of financial services. Of course, financial services operate in the wider economy and as such, it is
intrinsically linked to wider economic cycles. However, focusing on things that banks can exert more
influence on; I think the biggest threat and opportunity will come from opening up of the chance to offer
better financial services. Fintechs pose a large and growing threat to traditional players. Last year was a
record year for Fintech investments - with more than 2 billion invested worldwide. The challenges posed by
new regulations such as Open Banking, are also significant. But where some see challenges, others see
opportunities. We are advising our customers on how to counter the threats while capitalising on these
opportunities. The lending and transaction banking landscapes are complex and fast changing. Delivering the
products and services that customers expect, demands a breadth and depth of functional coverage: breadth,
because customers have wide ranging needs - from simple overdrafts to complex leasing agreements - and depth,
because even the simplest overdraft is becoming increasingly complex. In transaction banking, the challenge of
gaining the visibility that corporate treasurers need amid rising levels of volatility, is making a difficult
problem even more complex. Our solutions address these issues for our customers. This is recognized and
Nucleus is sought for its solid experience gained in the realm.
With unpredictable fast evolving customer behaviour and rapid advancements in technology, digital
capabilities are now rapidly becoming table stakes. Lending is transforming beyond digital and the lenders of
tomorrow must be ready to deliver unique and personalized experiences that customers of tomorrow will demand.
With more than three decades of lending business domain expertise, Nucleus Software is contributing
significantly to this revolution in the financial services industry. Nucleus FinnOne Neo Cloud combines the
advanced capabilities of the 10 time winner of the world’s best-selling lending solution with cloud
based, model specific benefits. The solution, which provides end-to-end digital lending capability along with
mobile apps and readily integrated analytics, has already been adopted by 25 leading financial services
companies in India within the last 21 months.
But it is more than that - the pace of change of technology, the rise of an ever changing ecosystems and
the regulators are all putting pressure on financial institutions. Old, monolithic, inflexible systems simply
can’t cope - they are difficult to change, costly to maintain and hard to integrate.
Nucleus solutions eliminate these hi-tech induced problems while also preparing our customers for the
future. Whether they are large banks digitising their entire retail lending process end-to-end, or corporate
banks providing advanced working capital finance solutions to multinationals or new market entrants
disrupting their segment with loans approved in minutes, we serve them all.
Our solutions deliver the business agility today’s lenders need to cater to the complex needs of
lending to retail customers as well as large corporate and small-to-medium enterprises (SME) customers. We
cover the complete loan lifecycle across multiple channels, including web portal and mobile. We are using
cutting-edge machine learning and artificial intelligence capabilities in Nucleus Lending Analytics to enable
lenders to make faster and more informed loan decisions through data visualisation and business insight
generation.
With all the focus on technology, it can be easy to forget that financial services is a ‘people
business’ - where customers rely on lenders to help them achieve their ambitions. And while a lot of
attention is being paid to the potential negative implications of automation - for example, the list of
professions that might be eliminated by new technology - we need to remember that automation transforms
rather than destroys. Take for example, VisiCalc - the first spreadsheet software that was launched in 1979.
It has been reported that it made hundreds of thousands of accounting clerks redundant. In the USA alone
there are 400,000 fewer accounting clerks than in 1980 but there are also 600,000 more jobs for regular
accountants because crunching the numbers became cheaper, more versatile and more powerful and hence the
demand went up. Automation reshaped the workplace then and it continues to do so today. People are very
adaptable and they are very creative. People are the driving force behind our success and that of our
customers’ success. The capability that Nucleus has to work on this adaptability and creativity is what
our customers recognize and look for working with Nucleus. I would like to thank our customers for helping us
learn with them to build a domain expertise essential for transformation. Their continuous support and the
confidence they have demonstrated in us has helped us jointly create value that we are proud of.
OUR PEOPLE, OUR PRIDE
Nucleus Software is a company that truly supports and believes in its people. What makes Nucleus stand
out is that Nucleus is convinced that every single employee has a stake in the company’s success. We
are very team-driven, and operate in a way that puts collective goals ahead of individual achievement. In
last 3 decades, we have grown very quickly, and we continue to succeed because we are an agile organization
that can rise to any challenge we may face. I am delighted to see that - from leadership to team members -
everyone at Nucleus is very enthusiastic and fun to work with. We love what we do, and it shows in the strong
relationships we have built with our customers. I am proud to be a part of this leading organization and
pleased to witness that we keep on growing and keep on delivering great results all around the world.
AS WE GO ALONG...
Since our foundation in 1986, we have grown steadily, expanding into new markets and new countries,
building all the time on our values-based approach. While technology continued to evolve continuously
throughout this period, I think we are at an inflection point - where the combination of advanced technology
and business expertise can deliver tremendous change. The key factor is in how to put it to use, how to use
it to solve business problems for one’s customers. I think we have proven ourselves in this regard over
the last three decades and things will only accelerate from here.
We are a global business; with customers in more than 50 countries around the world. In the last year, we
have seen significant traction in markets all over the world, including Vietnam, Indonesia, Kenya, the Middle
East and India. The level of engagement from our customers continues to increase and we have seen some great
opportunities coming in, building of course on our global footprint. We will continue to focus on our key
markets, including India, South East Asia, the Middle East and Africa, as well as our growing markets in
Australia and Europe. We are also looking at the Americas as we believe our solutions can help financial
institutions in that region capitalise on the opportunities emerging in those regions that are created by
digital disruption.
I would like to thank all our stakeholders, including investors, customers and employees. We look forward
to the continued support of all stakeholders in this journey.
S. M. ACHARYA
CHAIRMAN
Date: April 23, 2019
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