4 Common Features in the Best Fintech Solutions
If you’re contemplating trading in off-the-shelf software for custom fintech solutions, you need to know what’s possible and what’s prudent. Some vendors are happy to give a customer anything they ask for, without bothering to educate them first on what they should ask for (it’s easy to bill more hours that way!). However, the best vendors will help you understand what’s possible, and what’s wise, so that you only pay for the features that really help your business.
It’s easy to focus on the whiz-bang aspects of new software, like fancy new dashboards, but that isn’t what makes the best software. Rather, it’s the infrastructure — the girders, trusses, pipes, and conduits that support the pretty facade.
What infrastructure should a fintech software company provide?
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Access controls
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Audit trails
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Legacy system integration
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Application programming interfaces (APIs) (both existing and new)
It’s important to understand these, so you’ll know what you need and how each component reduces both costs and risks in the long term.
1. Access Controls
By definition, fintech solutions work with sensitive data. Many people in your business need access to the data, but not every role is created equally, so your software shouldn’t treat them equally. You want each user to have exactly what they need to get their job done (and no more), but it’s all too easy in a poorly designed system for various actors to accumulate permissions they don’t need. For example, what happens to employees’ permissions when they change roles within your firm?
A poorly designed system can leak delegated authority. Even if you trust your people, mistakes can happen, and accounts with too many permissions can become targets of third-party attackers. One notable example is the Capital One data breach in 2019, where an associate who worked for their cloud hosting company exploited their insider access to steal personal information of over 100 million customers. Because access control poses a multi-pronged security risk, it’s always prudent to be cautious.
2. Audit Trails
It’s not enough to verify that someone has authority to access data and take action, you should also monitor and log each person’s activities. Just because you trust an intern to view the same accounts as their superior doesn’t mean that you trust them to do so when nobody’s looking. Logging views and actions is useful for all sorts of reasons — to understand how an account evolved over time; to gain insights into employee capabilities; to perform catastrophe recovery; and to maintain compliance with internal and external regulations.
The takeaway? Be sure your fintech software company ensures that your custom tools protect sensitive information from third parties or rogue employees and monitors access for compliance with regulators.
3. Legacy System Integration
Fintech solutions are not stand-alone custom tools. Rather, they’re usually embedded in a web of heterogeneous, often legacy, technology. The other elements can be anything from in-house spreadsheets, pipelines of CSV files coming in from partners via email, existing dashboards, partner databases, and more.
While some vendors might suggest that you should start over from scratch and replace all of your existing tools, this approach may be a non-starter for multiple reasons. Cost alone can make it implausible. Timelines for deploying huge rewrites can be prohibitive, and there’s often so much subtle business logic embedded in existing toolchains that a complete rewrite is a disaster waiting to happen.
The best fintech solutions, therefore, are unlikely to be one-off solutions or total rewrites but will minimize costs and preserve your existing business logic. Think of working with your fintech developer like partnering with a “legacy software modernization company.”
4. APIs
APIs are standard interfaces that allow different software applications to communicate and exchange data with each other and support legacy system integration. In FinTech, APIs enable seamless integration between various systems, facilitating real-time data sharing and automation. It allows developers to connect disparate tools, much like you might snap together LEGO building blocks.
If new software is required, yet old solutions can’t be immediately discarded or replaced, a fintech software company can leverage APIs to add new functionalities, services, or data sources without rebuilding the entire application from scratch, saving time and resources.
Do you have a process where an employee pulls a report on Bloomberg, copies it into an email, sends it to someone else, that person puts it in a spreadsheet, and a third person keys it into an application? This entire process — with all of the costs, delays, and opportunities for error — could plausibly be replaced by simple “glue code” from APIs that piece together disparate parts into a cohesive system.
Many familiar tools have APIs. Excel has an API, as does Gmail. Many of the tools your firm is already using likely have APIs. An API development company can build fintech solutions for you by connecting tools that you already use. Overall, APIs play a crucial role in empowering fintech developers to create innovative, feature-rich, and user-friendly applications that meet the evolving needs of consumers and businesses in the financial services industry.
Filling the Remaining Gaps With Automation: RPA vs BPA
In some cases, existing tools don’t have APIs, and that’s where two other tools come in. Robotic process automation (RPA) is a technique where software emulates human activity, like data entry, clicking a mouse, etc. RPA bots can interact with existing applications through the user interface, making it easier to automate processes without the need for complex integrations.
Business process automation (BPA) links together steps in data flow, detects that a step is done, and automatically triggers the next step. Business process automation vs robotic process automation (RPA vs BPA) isn’t an either/or question — sometimes both are called on to deliver the right fintech solution where the risk of human error can be reduced and where APIs do not currently offer a convenient shortcut.
What a Fintech Software Company Can Do for You
How do you know if you’ve found the right fintech software company?
Look for a fintech software partner who will conduct a thorough examination of your existing processes to understand them before making any changes. They should seek to understand different employee access roles to propose a model of roles and capabilities that works for your organization and secures your business.
They should write only the code necessary to give you the new features you need while using APIs to achieve seamless integration between your internal and external tools.
The end result — if done right, by people who eat, sleep, and breathe custom fintech software — will be a secure tool that harmonizes all of your existing processes and complies with regulatory and auditing requirements. Why embark on this journey? To accelerate processes, boost capabilities, minimize errors, and enhance management oversight of crucial operations, all with a singular goal: amplifying customer base and transaction volume, ultimately driving up profitability. To find out more about how DBA partners with businesses to build custom fintech solutions, book a meeting.
