Organisations are adopting enterprise SaaS, as an alternative to conventional business software. SaaS is cost-effective, and critical business processes are put in an on-demand environment. The advantages of enterprise SaaS are :

Scalability and Accessibility

SaaS solutions reside in cloud environments. These are scalable and could be integrated to other offerings of SaaS. It can be scaled up or down depending upon needs.

Cost Effective

There is a periodic subscription to be paid to SaaS providers. There is no upfront huge payment. SaaS providers maintains the environment, and hence the maintenance costs are lower.

High Adoptability

SaaS solutions are delivered through the web. Employees master them quickly. Thus adoptability is easier.

Guaranteed Level of Service

Traditional software is not warranty-backed. SaaS guarantees the performance. There is automatic back too.

Faster Updates

There are less costs and effort associated with SaaS updates than those with traditional software.

There are some disadvantages of SaaS solutions.

Limited Visibility

There are many SaaS tools within a tech stack. Different teams may be using different apps. However, the functionality is similar in SaaS apps.

Compatability

Enterprise SaaS can be scaled up easily. It lowers costs. There are problems of integration when independent software is used, say CRM system with Salesforce. We have to troubleshoot the issues.

Security

There is easy access to SaaS model anytime. It carries a lot of information, especially crucial financial data. The data is sent to cloud with ease. It is a data security issue. There should be clear policy about data security.

Indian software-as-a service (SaaS) companies are poised to reach $30 billion in revenues, capturing 8-9 per cent share of the global SaaS market by 2025. ( Report by Bain & Co).

IT service companies no longer operate in commoditized market. As most of the organisations are undergoing digital transformation, IT service providers tend to offer end-to-end solutions through cloud-based and SaaS-based platforms. Traditionally platform refers to a package and-or point solutions. It has been broadened to make it end-to-end in scope.

The platforms are offered across several domains such as banking, financial services and insurance (BFSI), telecom and AI.

Platforms still contribute just a small part of the overall business. These are not sold on license but are deployed for the clients to get service opportunities. Some companies create productised offerings that are licensed out, but most companies offer services in a managed services platform.

A banking product Finacle (Infosys) can be sold as an independent product as well as bundled with a larger service offering. AI too is offered as a part of larger managed service contract.

Platforms provide scalability and higher and higher margins. A combination of products and platforms offer solutions to customers quickly. A SaaS model can easily incorporate new features and functionalities. It can be riveted on an existing platform.

Customers have moved or are moving from one-time license fee to a SaaS-based consumption model. Service companies realise that Cloud and SaaS are causing disruption.

Cryptos are difficult to ban effectively. Just as file sharing has not been banned effectively despite the efforts of various governments for the last 20 years, cryptos too cannot be banned. It is a peer-to-peer network. Nigeria has not succeeded to implement the ban on cryptos. Crypto investors can carry out transactions using peer-to-peer networks, and fiat money. The transactions can happen on other payment platforms.

Decentralised Finance (DeFi) platforms that operate on blockchains can be used to trade in cryptos without any intermediaries such as banks or crypto exchanges. User signups are anonymous on these platforms (no name, id markers suchas email or location). Many Chinese transactions seem to be happening this way after the ban. At least the exchanges do the KYC. DeFi platforms do not . Crypto exchanges are based on servers. DeFi platforms are not controlled by a single or group of servers. These too operate through distributed peer-to-peer networks run by computers across the world.

DeFi platforms and cryptos can be banned by banning the ports — the interfaces that that allow computers to communicate regarding a software. However, in essence it blocks other genuine software utilising the same port.

Even banned exchanges can move abroad. These then can deal with customers through private virtual networks (VPNs).

People can do transactions in other jurisdictions.

Geeta Gopinath, from IMF, is of the opinion that the ban on cryptos may be tough to impose from a practical point of view. A lot of exchanges are offshore and not subject to a particular country’s regulation. A global compact is necessary, as an individual country cannot do the regulation.

Digital currencies can be traced back to the end of 1980s in the form of DigiCash and e-gold. Later, cryptocurrency appeared towards the end of the first decade of the new millennium. Cryptocurrency is secured by cryptography. Cryptos are highly volatile.

As an attempt to make them less volatile, the concept of Stablecoins appeared. They are backed by underlying assets to limit price fluctuations and are more regulated. Several collaterals and methods stabilise them. These could be backed by commodity, fiat money, other cryptocurrency or any combination of these assets.

Digix Gold Tokens (DGX) are stablecoins which are commodity-based. Tether, Binance, Diem, USDT, USD and USD Coins are backed by fiat money. DAI is backed by cryptocurrencies. Seignoirage are stablecoins not backed by assets but by complex algorithms which control their supply.

Stabilisation makes digital currency a store of value as well as the medium of exchange.

Arth has been pegged to a basket of assets, where each asset is assigned weightage to hedge against inflation and currency risk. Arth can be treated as ‘value-stablecoin’.

The stability of stablecoins is related to the stability of underlying assets. The value may also relate to the trading volumes of such coins. These stablecoins too are subject to interest-rate risk, credit risk and liquidity-risk.

Digital lending space is growing rapidly. The working group on digital lending set up by the RBI has made certain recommendations and suggestions for regulation of this sector. Digital apps collaborate with banks and NBFCs to offer loans, and these apps are not regulated. There could be overleveraging of customers, excessive interest rates, dubious collection methods. Such issues have been addressed by the working group.

There should be a clear distinction between Balance Sheet Lenders (BSLs) and Loan Service Providers (LSPs). BSLs provide loans and take credit risk. They are regulated. LSPs could be digital lenders who provide borrowing options to the customers. They are not regulated. However, they have to partner with BSLs. LSPs manage the front-end. The segregation leads to innovation.

There should not be backdoor entry into regulated activities.

Many Buy Now Pay Later (BNPL) providers do not treat it as a loan. As a consequence, they do not follow KYC procedures while onboarding customers. These should be identified as lending products and there should be necessary checks.

All interest and charges paid should be Annual Percentage Rate (APR) and should be communicated to the customers. Many charges are collected as fees to make interest rates palatable. Short-term credit should be brought under appropriate guidelines to avoid excessive interest rates.

There should be fair treatment of borrowers, especially while doing collections.

Data privacy is to be maintained. Data should not be used for lending decisions without consent. CR reports should not reach unregulated entities.

There should be Self Regulatory Organisation (SRO) to govern this space. Digital Trust of India Agency (DIGITA) can be created. Agency of Financial Regulation (AFSR) can be created to regulate outsourced activities.

Big Tech in financial services must be looked into.