Founders' Diaries series: avoiding integration hell
You've had a great idea, raised some funds from investors and are trying to launch a financial technology company. You now need to find different vendors and cobble a solution together.
After negotiating with at least three FX providers, 2 IBAN vendors, a few data aggregators and a KYC specialist you realise there is overlap across almost all solutions.
You’re left with two options. First, build it yourself. I will explore why this option is increasingly becoming a thing of the past in a separate diary entry.
Second, go blindly with one provider and pin your success to them. Worst idea ever! Rule number one of financial services is to make sure you have built in redundancy. Redundancy is another topic I will explore in another diary entry, but for now let's continue discussing the Buy option.
Fintech services like FX, money transfer, account verification, user-level auditing, ledgering systems, KYC are all things that need to work, but none of it needs to be built internally because user experience is above all. And differntiating your product in a sea of offers is king. Besides, there are plenty of innovative fintech service providers who can simply what would ultimetly be a baseline requirement that your customers expect.
Indeed, many fintech providers offer excellent solutions, but with significant service overlap. You now have the complex challenge of combining these systems into a cohesive user experience. And the ever present challenge of maintaining connections to them all in the background.
The Workflow abyss
After 6 months of the year researching and negotiating with vendors, the development team can finally start to build the integrations. Great engineers are hard to find and most of the best lack the domain expertise or operational experience needed to build a fintech platform.
Teams are stuck in the workflow abyss of trying to build an operational platform to monitor transactions, provide visibility for auditing and answering questions (customers tend to ask questions when they’re confused about what’s happening with their money), and tools for handling exception and reconciling data from disparate data sources.
After six months, the product is far behind schedule, the costs are ballooning, the development team is frustrated, and very little work has gone into building the company’s core IP.
This is exactly what happened to us in a previous venture. More importantly, this is the reason why we started Integrated Finance.
Say goodbye to integration hell
As mentioned, numerous fintech providers now offer innovative solutions across connectivity, trading, authentication, compliance, payments and much more. These back-end functionalities are increasingly important for companies building out financial services solutions.
Therefore, incorporating existing technology and integrating solutions for complex processes using APIs is a valuable way to optimise development costs and speed up time to market. This is the bedrock of our infrastructure.
In other words, there's another way and a better one might I add. Yes, I might be a little biased, but the rest of the founding team and I have experienced first-hand the pain of integrating and stitching together financial banking providers and partner connections, and we know we are not alone in experiencing this pain.
So, if you are innovating in financial services, let's build something amazing together.