I wish to express my gratitude to all our shareholders investors staff and partnersfor their continued support. Their support is critical in our mission to help ourcustomers succeed and has been at the heart of our success for the three decades. Todaycustomers in 50 countries are leveraging our experience commitment and vision to drivetheir businesses forward and keep their competitive edge.
DELIVERING RESULTS IN A CHALLENGING ENVIRONMENT
2016 was a very eventful year - the global economy registered tepid growth with modestand uneven recoveries in many advanced economies - markets were unstable buffeted bypolitical shocks such as Brexit the Italian Constitutional referendum and the results ofthe U.S. presidential elections. Rapid technological change and rising customerexpectations continue to disrupt entire industries. However the global economy also beganto show signs of improvement throughout 2016. The Indian economy grew by 7% in Q4 of 2016despite the effect of demonetization. From your company's perspective demonetizationhelped us by promoting digital transactions. A large segment of the Indian population isnow moving into digital transactions and many more people are now a part of formal bankingservices. Globally significant economic and political volatility will have an impact onthe financial services sector. The U.S. equity market surged to all-time highs and theFed's decision to raise rates suggest that the long period of accommodative monetarypolicy in the U.S. may finally subside at a faster rate than many had anticipated.
The Brexit victory sent economic shockwaves through global markets leaving Britain andthe entire Eurozone in a period of deep uncertainty. There is ongoing anxiety over whatwill happen once Britain leaves the EU and some realignments with long term implicationsare expected. The FinTechs meanwhile continued their disruptive approach and as reportedby Frost & Sullivan the Australian FinTech sector will grow at a compound annualgrowth rate of 76% reaching A$4.2 billion by 2020. The Middle East is still adjusting tothe effect of lower oil prices and new waves of protectionist measures seem likely aroundthe globe.
Against this backdrop we made good progress on our strategy delivering strongoperating performance and cost efficiencies as well as solid returns. In today's rapidlyevolving environment investors are looking at us more than ever before and theresponsibility that we feel for our customers has never been greater.
KEEPING PACE WITH NEWER TECHNOLOGIES
Chatbots. Personal assistants. Robo-advisors. Machine learning. Cognitive computing.And so much more. While the term Artificial Intelligence (Al) has been around for 60years it has finally become part of our daily livesand how we bank invest and getinsured. Some financial institutions have been investing in Al for years. Other firms arenow beginning to catch up thanks to advances in big data open-source software cloudcomputing and faster processing speeds.
Today the world's leading banks are experimenting with robotics and artificialintelligence to improve efficiency and stand out in a market where banks are becoming moreand more standardized in terms of technology and services offered to customers. Bots arebeing used in many areas including providing online interactive mortgage advice toconsumers and many processes are now completely free of any human engagement.
Our teams are engaged in continuous conversations with our customers and are helpingthem tackle the biggest issues facing the financial services industry. We are continuouslyenhancing the capabilities of our solutions to be able to add value to our customers.
THE CONSUMER S JOURNEY
To help our customers become more customer-centric we have made it a priority to embedour solutions deeper into the consumer's journey. This means thinking about financialservices not as a separate activity but as an enabling activity that should be seamlesslywoven into a consumer's everyday life.
We are taking our digital capabilities to existing customers and prospective customerswhile also investing in disruptive innovation that will drive productivity in the future.Guided by a strong executive team we launched a new product during the year - LendingAnalytics to help companies leverage the power of analytics in lending and continued tobuild on the market for FinnOne Neo Cloud which enables companies to take advantage ofthe power of cloud.
These solutions have opened new target markets for us. We have helped customers allover the world go-live and benefit from the advancements in technology.
From an economic perspective we expect 2017 to continue to be challenging andvolatile. The financial services industry stands at an inflection point. The next fewyears will be critical as companies around the world embrace digital technologies - CloudAnalytics Robotics and Artificial Intelligence.
Nucleus Software is well positioned for continued success in the future. We can helpour customers and prospects make the right technology decisions in order to lead theirmarkets and beat their competitors. We take responsibility to ensure that new technologyis adopted in ways that are aligned to the organizational goals and long term objectivesof our customers especially in times of changing economic scenarios.
Your company is committed to delivering great products and outstanding experiences toour customers. We are committed to make people's lives better by changing the way theworld moves. We are committed to creating value and delivering long-term profitable growthfor our stakeholders.
Your trust is what drives us. I thank you for the confidence you have placed in ourcompany. We are looking forward to the next stage of our shared success.
April 25 2017