The future of financial automation – Optimus Fintech interviewTuesday 26 September 2023 10:08 CET | Editor: Vlad Macovei | Interview We sat down with Swapnil Mengawade , CEO and Founder of Optimus Fintech , to discuss the company’s journey as it seeks to revolutionise finance operations with AI, data automation, and future-focused innovations.
We'd love to learn more about your background and the inspiration behind the establishment of Optimus Fintech. Could you share your journey and what motivated you to start this venture?
I have always been fascinated with cutting-edge technology and have been fortunate to lead some groundbreaking projects. Among these are the successful launch of NASA's payload into space and the implementation of the world's first robotic supply chain system for Estee Lauder. In the last decade, my professional focus has been dedicated to the field of retail payments.
During this time, I've collaborated closely with payments, finance, and accounting teams, assisting them in constructing a resilient financial infrastructure. I have witnessed the exponential growth of data systems with disparate file formats, transaction-level intricacies, and sheer transaction volumes that have given rise to significant challenges within payment and finance operations.
My journey of creating, introducing, and expanding retail payment solutions has imparted a profound realisation: achieving seamless financial advantages hinges on the presence of a robust backend infrastructure . This realisation led to the creation of Optimus, which aims to enable businesses to manage their financial operations with agility, simplicity, and innovation in a secure environment. We aim to empower the finance function to be pivotal in supporting the company's growth journey.
Can you provide deeper insights into the intricate challenges that are prevalent within payment and finance operations (fin-ops)? Specifically, could you shed light on the primary pain points associated with these challenges?
Fin-ops infrastructure for tasks like data aggregation, reconciliation, accounting, and managing financial operations on a large scale is a formidable challenge that every company confronts to varying degrees. Whether you're constructing a robust underlying framework from the ground up or integrating with external service providers, you'll encounter a plethora of intricate decisions that need to be made to facilitate the most efficient means of aggregating, monitoring, reconciling, and accounting transactions across the full life cycle of money movement. This cycle involves intricate services, unique scenarios, and intricate fund movements. When these aspects are not managed effectively, it can have detrimental consequences.
Back-office operations may need help with missing payments, settlement outages, incorrect fees, and financial records failing to reconcile. At the same time, your fin-ops teams are sidetracked, dedicating valuable time and resources to trace the whereabouts of a specific payment. These issues can directly impact the bottom line through revenue leakages, high operational costs, increased dispute rates, etc. We have also seen fin-ops teams manage payment data in unsecured environments like Excel or non-PCI-compliant tools that have led to data security issues. All these challenges can disrupt the progress of your finance and IT roadmap, diverting focus away from creating exceptional user experiences.
When it comes to payment and finance operations, do you observe a uniform set of challenges across the various market segments you cater to, or do these challenges exhibit variations depending on the specific segment?
While there are common challenges in payment and finance operations that apply across various market segments, there are also variations depending on the specific segment. There is a need for robust financial systems, effective risk management, and ongoing investment in technology and expertise to address them effectively. Additionally, specific market dynamics and competitive landscapes in each segment influence the emphasis placed on certain challenges. Whereas a bank sees regulatory compliance as a top priority, a merchant sees customer payment disputes, chargebacks, cart abandonment, and fraud as its top priority challenges.
Payment operation teams need to implement a unified payment back-office to ensure that all commissions and transactions are reconciled accurately and promptly. Failing to do so can result in various challenges, such as:
Inability to detect and resolve transaction leakages which leads to revenue loss;
Scalability issues with growing transaction volumes;
Increased operations costs and process inefficiencies;
Lack of process standardisation across payments, accounting and finance teams;
Poor financial oversight due to a lack of record-level auditability and accountability;
Creation of data silos due to data being stored on multiple systems across various teams;
Sub-optimal financial control on money flow;
Unresolved payment incidents impacting customers that lead to higher chargeback rates;
Increased cost to serve through customer support and fin-ops involvement.
Could you offer a glimpse into the customized solutions and innovative technologies that your organisation has developed to address the specific challenges encountered within distinct market segments? How do these solutions benefit your clients within these segments?
At Optimus Fintech, we utilise our extensive knowledge in finance, payments, data science, and AI to tackle a difficult issue – automating back-office and n-way reconciliation processes. This involves collecting, verifying, and standardising data from various sources, reconciling all transactions, linking a transaction through its life cycle and delivering precise financial information and analytics.
Optimus Fintech is an enterprise SaaS platform that is PCI-DSS certified. It provides services that cover four critical areas of back-office automation.
Data preparation : seamless gathering, validating, and normalising data from disparate sources with 150+ integrations into ERPs, payment gateways, acquirers, networks, banks, etc., allowing teams to achieve their business initiatives faster.
N-way transaction reconciliation : high volume transaction matching engine that reconciles millions of transactions in minutes to remove revenue leakage, immediately finding and fixing exceptions and anomalies. It also constructs and links a transaction through its life cycle.
Analytics and reporting : intuitive, simple, and easy-to-understand dashboards ensure teams can move quickly and confidently based on data insights to monitor channel performance, fees, payouts, etc.
Ledgers : organic accounting that models any money movement use case with precise financial accuracy using core accounting primitives and double-entry standards.
Optimus delivers a return on investment for organisations in year one in the form of:
Optimised operations : significantly decreases your operational efforts and IT costs with zero code data orchestration.
Optimised accuracy : ensures zero revenue leakage across order to cash cycle and resolves customers’ issues before they turn into chargebacks.
Optimised insights : save time and money with payment reporting that includes fees, commissions, payouts, and approval rates.
Optimised accounting : stay audit-ready with complete order-to-cash traceability for each record.
How do the solutions provided by your company benefit the customers within the segments you serve? In what ways do your offerings improve their financial and operational experiences?
Transaction-level reconciliation and life cycle view serve as the linchpin in ensuring the alignment of individual transactions with their real-world counterparts. This alignment encompasses critical aspects such as timing, direction, and amount, involving multiple parties and services. This precision is of paramount importance in financial products, as it guarantees the prevention of payment mishaps and the assurance that funds are precisely where they should be. Nonetheless, reconciling payments is a multifaceted task that extends beyond mere intuition. It necessitates aggregating payment data from diverse sources, meticulous handling of exception cases, and synchronisation with settlement timelines. Constructing efficient, scalable processes capable of adapting to your business's growth trajectory poses a substantial challenge.
Consequently, businesses can shift away from reliance on spreadsheets, static SQL queries, or delicate in-house solutions. Instead, they can harness Optimus' reconciliation platform to automate their financial workflows. We provide the essential infrastructure for payment reconciliation, consolidating disparate data sources into a unified financial data platform. Our platform excels at translating payment transaction data from various sources, such as Payments Service Providers, accounting products, ERPs, banks, and databases into standardised formats. This enables companies to validate and analyse their data across providers swiftly, and promptly detect and resolve anomalies in the process.
What exciting developments and improvements can we expect to see on the Optimus Fintech product roadmap? Could you provide a sneak peek into the future of your product offerings and how they will continue to evolve?
Optimus Fintech is gearing up for an exciting year ahead! We have received an overwhelming response from the market and are now focused on deploying our current pipeline and engaging with enterprise merchants, PSPs, gateways, acquirers, banks, and card schemes.
To enhance our efficiency in addressing reconciliation discrepancies, we are implementing an AI/ML-powered recommendation system. This system can quickly analyse patterns and identify inconsistencies, eliminating the need for repetitive manual tasks. It uses advanced data mining and analytics technologies, such as neural networks, to examine datasets, identify connections, and determine the best course of action. By detecting and fixing issues before they impact revenue, organisations can greatly reduce revenue leakages.
Our vision is to become the go-to source for payments, finance, and accounting teams by providing a single source of truth.
About Swapnil Mengawade
Swapnil Mengawade is the Founder and CEO of Optimus Fintech Inc. For a decade, Swapnil has worked in the retail payments arena transforming payment back offices for Fortune 500 companies. In his 15+ years in technology management, Swapnil has pioneered groundbreaking initiatives, from launching payloads into space at NASA to implementing the world's first robotic supply chain system at Estee Lauder. Swapnil holds a B.Eng in mechanical engineering from Drexel University and an M.Eng from Cornell University.
About Optimus Fintech
Optimus Fintech is a plug-and-play cloud platform that streamlines payment data management and automates financial workflows through its comprehensive solutions covering data aggregation, reconciliation, exception management, fees and commission validation, in-depth payment analytics, and reporting. A PCI compliant data platform, Optimus is trusted by renowned Fortune 500 companies, processing over 1 billion annual transactions securely, empowering businesses to effortlessly track, manage, and account for money end-to-end.