Valuing Innovation

Indian software company Nucleus Software spread its wings into Europe when it set up a Dutch subsidiary in 2005-06 and there’s been no looking back. Team Connect spoke with CEO Vishnu R Dusad to delve into the recipe for success for software companies serving the European market.

Nucleus Software focuses on solutions for the banking and financial services industry? What are the special challenges this industry faces and how does specialised software benefit the sector?

Nucleus has a single point focus on the banking and financial industry for the last 25 years. We have taken the product route to bring value to our customers with not only our domain expertise but also by following the best operational practices. Our flagship product has been rated as the number 1 selling lending product by IBS Publishing and has been implemented by many known banks. We have associates from the banking industry and very specifically from every region of our operations who not only understand the domain very well but also provide us thorough leadership on trends. Our single-minded focus on products helps us bring this vision in form of innovative features in our products. We not only believe in installing our product, but ensure that customers are able to get their ROI at the earliest. Risk, operational excellence, flexibility and cost are some of the challenges the industry

is facing these days. For example, one of our visions is to make the processing of the Rs 100 (Euro 1.65 loan) loan profitable in India (microfinance).

India’s software prowess is now well accepted internationally, but many pass this off as a low-cost offshoring-focused success story. Do you think Nucleus’ growth story proves this theory wrong by showcasing Indian innovation and entrepreneurship? How?

With increased salaries in India and with cost pressures worldwide, the cost differential as an advantage is evaporating quickly. Now, the mantra to ex

cel is ‘Value for each Penny Spent’. Nucleus believes that the only way to survive and bring value in this context to the customers is to deliver quality and innovative solutions for the problems. We believe growth in terms of numbers is a by-product of doing right things and contributing to the society and through our customers, changing the lives of millions of people. As long as we are able to have a futuristic approach with innovative solutions, questions around growth should not arise. With this ethos in mind, Nucleus chose the path of investing heavily in product, which has resulted in our growth.

How did the company choose the Netherlands as a preferred location to invest in? How does being located in Amsterdam benefit your business?

Geographically Nucleus was stronger in the eastern side of the hemisphere, and to increase our presence in the western hemisphere, Nucleus started looking at Europe as an important market about 2 years back, taking time to understand the different cultures, languages and the way business functions there. The European market has always been a challenging and growing market and to address the huge potential available in this market, the Netherlands was the best strategic location to operate from and to grow business not only within the Nether

lands but also the other European countries. We set up a wholly owned subsidiary in Amsterdam in FY 2005-06.
The advantages of investing in the Netherlands were the supportive corporate tax structure that avoids double taxation on income and capital, and reduces withholding taxes on dividends, a flexible legal form and a well-established, reliable jurisdiction.
Amsterdam has become a major European financial center known for its efficiency and low costs in trade finance. The region is placed in the top three preferred European locations for ICT companies. While many technology companies prosper in Amsterdam, the economic make up is more akin to that of other major European cities with a greater emphasis on the service sector. In fact, locating in Amsterdam has helped us in winning a sizeable business opportunity with a European client.
Over the years, our committed professionals have provided solutions par excellence and the company has been able to create a global footprint of clients and partners across multiple continents with multi-product, multi-service, multicurrency and multi-lingual implementations, leading to worldwide acceptability and customer satisfaction.

I understand that even downturns are being turned into advantages with Nucleus focusing on delinquency management, for instance. What are the benefits of these products? 

It is often said that recovering your debt from a default customer is expensive, painful and often does not provide much results. While most of the people focus on having systems in place to evaluate the customer at the acquisition stage or once it has happened, Nucleus is coming out with a solution that looks at healthy customers and predicts the probability of their default by looking at their spending patterns. We are not only looking at delinquency management but also pre-delinquency management. Essentially our suite of products covers risk from customer acquisition to the end stage until the recovery happens.

You have recently attended the SIBOS event in Amsterdam? How do you see Europe and the Netherlands markets for banking technology shaping up in the future? What value do you propose to add to the operations of European clients?  

The paradigm looks to be changing from conventional banking and IT systems to experimentation with new processes, ways of doing business and pressure on experimenting with new technology. With limited opportunities and with the market place mushroomed with players, innovation seems to be the way forward. Clearly, the opportunities seem to be in the areas of risk management, cost optimisation with more focus on servicing revenue and business that can prove to be adhesive. Nucleus is adding supply chain modules to its cash management solution, which already caters to liquidity management, payable management and receivables management along with lockbox facility. We are also adding a pre-delinquency module to our flagship product to enable the bankers to detect the probability of their customers defaulting before it actually happens.

Interview featured in Indo Dutch Connect, Issue 48; www.indodutchconnect.com