While South Africa’s economy may be a bit shaky right now, many fintech and software startups have their sights set firmly on landing large corporate clients in 2024, both at home in South Africa, and abroad.
However, to attract corporate clients, it is not enough to show software development acumen. It is critical that software suppliers in South Africa also address their prospective clients’ regulatory requirements with which they are forced to comply. This includes mitigation measures that address the risks inherent in 3rd party supplied software.
With a two-decade track record, ESCROWSURE has emerged as a trusted partner for software companies, earning the confidence of global central banks, leading financial services in South Africa, and prestigious blue-chip corporates. As specialists in mitigating software risk, ESCROWSURE offers bespoke escrow solutions tailored to the distinctive risk profiles of individual businesses. Since 2004, ESCROWSURE has proudly held the position of the market leader and is the preferred software escrow brand for enterprises in South Africa. This enduring success reflects the company’s commitment to providing comprehensive and client-centric solutions in the dynamic landscape of software escrow.
When it comes to winning more blue chip corporates, there are a few things that software development companies should bear in mind to help seal the deal.
1. Have Resilience for Cloud-Hosted Technology
Most newly procured applications will be hosted and accessed remotely in the cloud. Resilience is often overlooked, especially when it comes to cloud-based applications. While cloud-based applications offer benefits like quick scalability, there are misconceptions about their inherent resilience. Many people assume that cloud providers guarantee the security of critical applications.
In fact, according to a recent report by Fortinet, while cloud technology’s adoption remains strong with 39% of organisations hosting over half their workloads on cloud platforms, 95% of the surveyed businesses cited concerns about their risk exposure in public cloud environments.
95% of businesses are concerned about risk exposure in public cloud environments.
However, cloud service providers are only responsible for the security of the cloud environment, not the application and data itself. Users must secure their application and data, which places the responsibility on fintechs and startups to demonstrate their willingness to mitigate this risk by providing reliable backup solutions.
Understanding the shared responsibility model of the cloud is essential to manage associated risks. Clients need to know their suppliers have mitigation measures in place to safeguard access to applications and data even in the face of severe disruptions.
For startups aiming to scale, dealing with resilience regulations is an essential area of focus.
2. Comply with International and Local Regulatory Requirements
Large corporates rely more and more on third-party apps for business critical processes. If these apps are vulnerable to untimely outages, the outcome will be unwelcome service disruption which often results in regulator fines for the user entity.
In response, financial services regulators worldwide are making new rules, like PRA SS2/21 in the UK and the Digital Operational Resilience Act (DORA) in the EU. Our own Financial Services Conduct Authority and Prudential Authority published Joint Communication 4 of 2023 setting out principles for IT governance and risk management that financial institutions and insurance providers “must comply with, in line with sound practices and processes in managing IT risk”. In essence, regulations now require firms to have measures in place to mitigate the risks of and resolve service delivery failure.
These regulations emphasise the importance of escrow agreements for on-premise software applications and SaaS escrow for cloud-based applications, along with verification services, offering firms assurance that applications can be quickly restored if their vendor is unable to continue service and stressed exit plans in the event of terminal supplier failure.
To reassure corporate institutions, software vendors need to ensure their solutions comply with these regulations providing software escrow options from the get-go.
This proactive approach will give them a competitive edge when competing for new clients.
As startups compete for sales ascendency and for funding, building resilience into software solutions becomes key. This not only enhances their value proposition, but can also help to attract the additional funding, vital for upscaling.
Talk to the experts at ESCROWSURE today, and prepare for growth in 2024
Set up your software development company for success in 2024 with your partner in escrow solutions.
How can we help?