Insanity is defined as doing the same thing over and over and expecting a different outcome. This adage most certainly applies to FinTechs.
The old way – building internally is costly, slow and buggy
- Costly – 40% or more of your budget is wasted building and supporting undifferentiated components like authentication, Know-Your-Customer (KYC), ACH payments, credit reports, financial data aggregation, etc. The cost of building all the features and integrating them into stacked operating workflows and processes can be significant. Moreover, there are significant costs to maintain the operational team to monitor and support these features. And for what benefit? Robin Hood and Chime don’t get ahead in this market because of their KYC or ACH capabilities. These building block components need to work seamlessly in an integrated environment. So why allocate precious resources to build from scratch when you can focus instead on engineering your core IP and value proposition?
- Slow – The average FinTech application has at least five to six FinTech functionalities. It’s often a several month process to find the right vendors, vet, contract with them and only then begin to integrate the technology and operational workflows. By the time you’re ready to launch in nine to twelve months, you’ve wasted a lot of time and resources and your MVP product is barely usable.
- Buggy – It’s challenging to secure the skilled developers who understand compliance, regulation, workflows, and financial data modelling you’ll need at the price you’re willing to pay – so many skimp and are saddled with unstable software fraught with errors that can torpedo your brand reputation soon after launch.
The changing market – a new environment for building FinTech apps
- Big money flows into FinTech. Venture-capital-backed companies in FinTech raised nearly $40 billion in 2018. That’s an increase of 120% since 2017. This investment has enabled companies to expand into new areas.
- Market demand for digitally accessible financial products. 72% of customers mostly access their bank accounts online. Only 18% typically go to a bank branch. These digital-first customers appear to be ahead of banks in terms of their willingness to use new channels. They love the convenience of banking, moving money, paying bills and managing personal finances from their mobile phones. And even KYC compliance – a mandatory requirement – can now be done quickly and securely from remote locations.
- A more level playing field. Smaller, more agile FinTechs entrants not constrained by geo can get to market faster, be low-cost producers, grow rapidly, serve new customer segments and effectively compete due to their lack of complex processes and legacy systems. With less barriers to entry, financial startups can thrive in underserved markets like SMB previously ignored by established players.
- TechFins are emerging. Tech companies are dipping their toes in financial waters to build share of wallet, enhance customer retention and drive new revenue streams. Amazon lends to small businesses to improve their customer experience and help build businesses’ capacity to sell on its platform. Apple is launching its own credit card, bringing its best-in-class customer experience to a financial product. According to PWC, 55% of bank executives view nontraditional players with their strong customer relationships to be a real threat to traditional banks.
- Availability of higher abstraction cloud computing platform services made commonplace by AWS and Google Firebase. Now, you don’t need to have your own data center — you can plug into a service that does all the low-level work. Abstraction gives you access to powerful technology building blocks and frees you from having to understand how they work.
- The presence of commoditized financial products like KYC, AML Compliance, ACH payments, data aggregation, digital wallets, depository accounts, etc. are readily available. Upstarts have access to core building blocks with sufficient quality and functionality to support any FinTech application without building it themselves. One caveat – commoditization makes it difficult to maintain uniqueness, requiring firms to differentiate via core IP and branding to provide a stronger value proposition.
A new approach for a new decade – Plug and Play Solution
With wider availability of higher abstraction services and commoditized products, don’t waste your time and energy building undifferentiated core financial features – there is a better way! We started Productfy to revolutionize the way FinTech applications are built and sprung to use! Build your application to our scalable, secured, and full-featured platform and get access to financial products like card issuance, depository services, ACH transfer, financial account data, KYC, credit reports, loyalty programs, record keeping, sub-account ledgering, and more. The platform combines a secure and scalable modular architecture with the most comprehensive marketplace of fully vetted, best-in-class financial products under a unified API with customizable widgets. It supports SMB lending, personal financial management and investment, savings, payments, loan payoff, card issuance/rewards and many other applications. For the enterprise, we offer the ability to deploy our solutions inside the organization’s cloud infrastructure. Productfy has six offerings that can serve a wide range of organizations including entrepreneurs without technical experience, development teams with only UI experience, or enterprise product teams looking for full control of compute and storage from their technology vendor. Now you can configure and test in an hour, integrate in a few days, and launch in just a few weeks! Our solution lets you focus your time and resources on things that differentiate and drive your business. With a quick launch of a fully integrated infrastructure to support your business, you are ready to go to market!
Let’s build something together!
Just login https://user.productfy.io/user/login and configure your own FinTech application and see how easy and powerful it is!