Fintech has been a rising star in tech for several years. This goliath of an industry started as a disrupter with the "humble" aim to revolutionize the financial services industry but soon exploded into everything from contactless card payments to robo-advisors to even cryptocurrencies.
But in good times and bad, it's a tough road. Many fintech startups do not enjoy the industry’s magnitude of success:
But there’s hope for fintech startups. By understanding the potential traps, a company can avoid the three most common missteps: ignoring those that came before you, understanding the importance of scope and capacity, and rushing to be the next big thing.
With the success and rapid growth of fintech, there are plenty of current technologies and open-source options out there for startups to help them get their feet off the ground. Yet, many still seem to want to go the prideful route and build their own platforms from scratch. While building a custom platform can have benefits, it can also have long-term impacts which should be considered. Choosing to go down this path means running the risk of operating on outdated technology, a pitfall that often causes operational and compatibility disruptions down the road.
Compatibility with technology used by partners, customers, or your own future business is critical to long-term viability. Building your own platform can jeopardize this critical synchronicity. Moreover, this route also often requires companies to develop code for multiple APIs, creating more work for valuable employees and distracting decision-makers from focusing on driving and growing the business.
Taking scope and capacity into consideration is important for any fintech company because refusing to do so could risk dashboard performance and make troubleshooting issues next to impossible.
Some fintech startups are lucky enough to enjoy quick growth in their customer base at the beginning of their launch; however, this rapid growth often translates to a lack of time to effectively and strategically implement network metrics. Instead, they opt to instrument everything in the spirit of getting it turned on quickly.
Although the desire to get up and running is understandable, this approach can and often does lead to an unsustainable volume of new metrics flooding the system once everything is turned on. It slashes the dashboard performance for everyone, and the sheer volume of inputs makes troubleshooting nearly impossible.
Resources aren't unlimited. Plan for your success, ensure appropriate scope and capacity are accounted for, and your project will avoid this common misstep.
Wanting to have the "next big exciting thing" is enticing to everyone, and fintech is not exempt. In fintech, engineers are always trying to be the ones to implement the newest disruptive technology and be the next industry front-runners. But it's essential to keep day-to-day operations simple yet effective.
The pressure and excitement to do this can drive engineers to try to create code that can operate without existing publishing systems. However, more times than not, this leads to a code that is missing critical features and turns a simple task into a very complicated task. This kind of code ends up causing costly operational migrations down the road.
As the line in Mark Twain's 1892 novel "The American Claimant" goes, “There’s gold in them thar hills," and the same can be said when looking at the fintech industry. However, the successful fintech companies (or miners, sticking with the gold analogy) are the startups that have fully and comprehensively thought out their infrastructure strategy. Ensuring that your company doesn't fall victim to any of these common traps can mean that your startup can grab, and hold on to, a share of the multibillion-dollar market.
