Modern customer-facing financial services are all built on a stack of third-party vendors, with three core business models emerging – unregulated BaaS providers, regulated banks and fintechs offering BaaS APIs or unregulated API routing layers.
We might be biased, but with the help of Integrated Finance, we think the API first, developer friendly routing layer model gives some major advantages to businesses building financial service products and here’s why.
Building and maintaining multiple providers
As the new financial services technical stack emerged so too has a plethora of suppliers that focus on each specific layer. With many fintech vendors looking very much like enterprise sales organisations, identifying subtle differences in services providers can be hard for customers without specific background knowledge. Time then is wasted on selecting the wrong vendor, getting a commercial agreement and integrating. The huge opportunity cost for a business is not working on your core offering.
Beyond the distraction of building your core I.P another distinct challenge is that whilst each supplier does more or less the same thing, the way you interact with these vendors varies greatly. The data required to post and receive information for account generation, FX, and regionally specific payments has no unified standard. There is no open banking API for this stuff.
Simplifying difficult to do, legacy financial integrations
Anyone who has tried to connect to a bank running on legacy systems will know what a pain it can be, both from the customer and bank’s perspective. For customers, legacy connection methods are difficult to implement without specialist help because of sparse information in the large code repositories.
Banks and legacy bank integration firms have been slow to externalise their knowledge, making it harder for developers from outside financial services to find useful help without paying and third parties to do the integration on your behalf.
Integrated Finance builds and maintains difficult, legacy integrations and transforms them into a simple to use modern API. Crucially, banks will continue to play an integral role in our ecosystem, providing a modern wrap-around for their own legacy integration methods.
Focus on your core offering, unleash your developers
Let’s face it, financial service integrations are not cool. They are also probably not your core customer offering. During the initial stages of getting a product working, integrations might seem important but as a business scales they soon lose their allure.
It’s a problem we see again and again, choosing whether the team’s responsibility is to look after non-core integrations, when there are super cool (and urgent) core customer features to build. So it gets neglected and responsibility falls through the cracks. Then disaster strikes, one of the vendors changes their APIs and your whole system goes down and the CEO shouts at you.
API routing layers solve this problem, allowing your development team to focus on your core offering and not needing to worry about maintaining uncool financial plumbing. Our platform attaches a SAAS fee to the unsexy task of building and maintaining integrations to your financial service providers. Overall organisational cost is lower than having your developers distracted and focusing on non-core features.
Advantages for product teams
Using a routing layer gives a product team access the functionality of a company with significantly larger resources. Built in redundancy where you can easily route traffic to multiple providers or add and subtract vendors quickly and easily. The API routing layers enable fast growing products to quickly achieve the right cost, speed, reliability, or experience optimisation for your business.
Leveling the playing field. Turning high fixed cost financial infrastructure into a pay-as-you-grow subscription
Financial service companies of every size can now, either early in their development or as they scale, add massive optionality and coverage to their product offering via our API routing layer. Our customers are able to enable similar impact and feature depth as much larger and better funded competitors at scale.
Get in touch to find out more about Integrated Finance.
