Tibits I learnt from Silverlake Axis AGM 2018

Fortunately, despite being rotated out to another role, I'm glad to be able to attend an AGM (with the pain of using leave).

I kinda like AGMs like these as the crowd tends to be more savvy which is a more stark contrast to blue chip companies like Singtel. The crowd was rather small too.

Some slides:

So let on with it:

• Silverlake Digital Economy (SDE), the fintech platform, has been lagging in performance. It serves as a "co-core", which I interpret as an add-on module on top of the core banking software Silverlake Axis Integrated Banking Solutions (SIBS) that Silverlake Axis provides. Uptake is expected to increase as banks are looking at fintech yet bundled with core banking, but after core banking serves are addressed.
• The recent fintech craze has made banks confused on what to spend on, core banking services or fintech. It made spending on core banking services stall for about 4 years. This has killed quite a few small competitors of Silverlake Axis.
•  Terminos, Oracle and BCS are moving out of the core banking services as they cater to the lower end of the market but can't sustain due to small order contracts (<5M) with a lot of work
• Silverlake Axis go for higher end contract
• Core banking and fintech are now seen to be mostly exclusive of each other, so both with exist with one another, banks still will live on.
• Declining Gross Profit Margins and Net Profit Margins are due to a combination of a few factors
• Stalling of spending as said above.
• Spending on R&D to prepare for the new landscape
• Revenue mix, such as 2014 to 2016 has seen more licensing as compared to 2017 and 2018 where banks cut back on capex.
• SAL has a backlog of 300M in orders
• Contracts are paid in RM for Malaysian contracts and SGD and USD for the rest
• Customer acquisitions
• Big Banks such as Maybank, find it harder to switch their core banking to SAL because of the costs (hundreds of millions to billions), only will switch if it breaks down really badly. 
• Some banks would rather pay a fine than pay for the switch (or at least delay it). 
• Some CEOs due to the short term in the company would prefer to focus on producing numbers and defer it in hopes their successors will do it.
• Others such as those in the western hemisphere is heard to have ego issues in addition to the cost of switching.
• Core Banking tends to take 1 year to change due to many issues such as regulatory, compilance, etc
• Silverlake Axis is looking at using SDE bundled with SIBS to grab customers in the future. Praises was said about this in an article here during the Digital Collaboration & Transformation Conference (DCTx 2018) by Chris Skinner, CEO of The Finanser Ltd and Author of Digital Human.
• Credit Cards
• Currently, credit cards are in very competitive spaces and expect margins of Mastercard and VISA to reduce due to competition from Alipay, Grabpay, etc.
• Silverlake Axis won't be affected much as they are the processor and not the player.
• Moving forward, Silverlake Axis is looking to acquire more companies and add it to their platforms as part of expanding features for future bank requirements and uses.
• Other small details
• Maintenance and enhancement CAPEX was due consolidation of offices post acquisition and renovation
• Software licensing CAPEX was due to product enhancements and development (incremental R&D)

Thank you for reading.

That's all for the post.

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