Solving the software integration challenge, FinTech’s last mile
Sergio Barbosa, CEO, FutureBank
Co-founder and CIO of enterprise software development house, Global Kinetic, Sergio directly heads its open banking platform, FutureBank. A skilled software engineer, innovative product developer, and keen business strategist, he has participated in several notable fintech milestones, including building the southern hemisphere’s first digital-only bank all the way back in 2002.
Eyes on fintech’s last mile
Many of the banks and credit unions that we speak to are no less “progressive” than their tier-one peers when it comes to recognizing the potential of platform banking or banking-as-a-service. They just don’t have the same budgets to spend on new talent, in-house innovation hubs, and large-scale partner programs.
You’ve got to spend money to make money though, right? That’s where fintechs can help by providing banks with reasonably priced know-how and out-of-the-box financial services developed with an entirely new focus on the digital end customer.
There are new sources of revenue to be gained in both directions, of course. My focus in this blog post is, however, not on the opportunities for value creation and exchange in bank–fintech partnerships – as central as that topic is to everything we do at FutureBank. Today, I want to look at a common hurdle for fintechs getting to that point: software integration. It’s fintech’s last mile.
Software integration: Here be monsters
The promise of a stress-free go-live – “fast go-to-market”, “rapid ROI”! – typically features in every piece of fintech marketing material, with assurances based on the modern, lightweight deployment model and excellent APIs. Things tend to run differently in reality, however, and fintechs often find themselves spread thin when integrating their technology at the bank.
Implementation teams are usually ignorant of what they will find at the client. Even smaller banks have many moving parts, constituencies, and the various systems they use are technologically complex and interface in unpredictable ways. The scale of banks’ regulatory burden, especially as it pertains to digital security and risk management, is also something few fintechs really understand, despite it being a factor in nearly every answer banks give to questions fintechs ask.
When the inevitable complications arise during integration, time is lost and costs – all the fintech’s own – pile up. Progress updates may remain cordial, but the project draws senior staff away from other important aspects of their business, including landing the next sale and building the next killer feature of their product.
Solving the software integration problem for fintechs and their customers
As enterprise software integration experts of long-standing, my colleagues and I at Global Kinetic have seen this dynamic – or something like it – in play many times. Knowing the nature of the beast ahead of time would help providers plan and act with speed and precision, freeing them sooner to return to what they enjoy doing most.
That’s why we built FutureBank, a banking-as-a-service platform that integrates into the world’s most widely deployed core banking systems. It provides fintechs with a fully kitted-out digital banking sandbox for testing their software integrations against these and helps determine the level of custom work required for non-standard or customized versions out there.
Flipped 180 degrees, FutureBank becomes a fintech marketplace where banks and credit unions are able to discover, test, and deploy pre-integrated third-party products and services at low cost, with considerably less risk than they would before. We have many products on the platform, and we onboard new providers every month.
What is the experience like for our fintech customers? I’ll describe a couple of case studies in future blog posts.