In today's digital age, companies are taking advantage of new and innovative ways to do business. To support this, it's essential to have a solid IT and tech infrastructure usually reserved for fintech companies. The recent explosion of fintech isn't surprising as tech-savvy professionals demand tech-enabled solutions. According to CB Insights, fintech has raised US$13.4 billion in the first quarter of 2021 alone. So, how does fintech operate?
How fintech companies work
Understanding how fintech works begins with knowing why they exist. Fintech encompasses new technologies seeking to improve and automate the use and delivery of financial services. What began as back-end technology systems for banking institutions, developed to include retail banking, financial education, investment management, and fundraising. Fintech is a blended term that refers to financial technology. It refers to any tech used within the financial services industry. Simply put, fintech companies make financial services more publicly accessible (think Front of mind are PayPal, Apple Pay and Transferwise). They include traditional financial transactions such as saving, investing, and loan processing, but also disruptive trends such as blockchain and cryptocurrency, and online and mobile payment systems.
Leading fintech companies
Fintech company examples include China’s Ant Financial, currently the world’s largest fintech company and owner of Alipay, online payment processing company Stripe, and Europe’s most valued fintech company Ayden. Ayden allows businesses and merchants to receive payments from anywhere across the globe through card networks (such as VISA and Mastercard) and local payment methods. What all these fintech companies have in common is that they make life simpler, more accessible and streamlined.
Fintech office infrastructure
FinTech success depends on infrastructure support. Top of the list on fintech company requirements are support structures that leverage existing technology such as blockchain to create potentially an updatable infrastructure. Here are our five essential infrastructure points to consider when launching a fintech:
1. Software Development – Includes all the things fintech infrastructure needs under software development; conceiving, specifying, designing, programming, documenting, testing, and bug fixing.
2. Open Banking & Payment Solutions – Allows secure sharing of financial information, such as consumer banking, transactions, and other financial data to third-party financial service providers. This sharing is done through APIs with the consent of customers. It is also important to choose the right payment processing solution for your company’s needs, ensuring a smooth transfer of funds.
3. Cloud Computing – Offers computing services (servers, storage, databases, networking, and software) over the internet. Cloud computing software takes advantage of these technologies without the need for expertise. It cuts costs and allows businesses to focus on developing their own business. It also accommodates for huge digital databases required by the fintech industry.
4. Communication & Project Management – Collaboration tools ensure that fintech teams clearly understand their roles and tasks. They can stay on-track both as individuals and as a united team. This inspires good team communication and collaboration, keeping projects on time.
5. Fintech Office Essentials – Once a fintech is launched and is employing staff, virtual offices don’t impress. Investors still like to see an office as business legitimacy. Tech, project, business development, as well as the sales and marketing teams also need to mingle to create something dynamic. Flexible office space providers, such as Compass Offices, offer the necessary supporting infrastructures for both new fintech start-ups and expanding companies.
With a dedicated team of IT professionals, Compass Offices is able to tailor customised IT solutions and provide responsive support for fintech companies with more specific needs, offering the best of a flexible and technologically-advanced office environment.
Among the extensive IT services Compass Offices provides are:
- Initial setup support and plug and play solutions
- Professional helpdesk support
- Direct fibre from multiple ISPs to our network
- Dedicated IP address, Gigalink connections and private VLAN segmentation
- Bespoke solutions for increased security, redundancy and bandwidth
The rise of technology and demand for digitisation has allowed fintech to rapidly rise. Fintech business owners must be savvy in how to run a fintech company and stand out from the crowd. They must be clear on everything from understanding legal requirements and compliance, to ensuring the best infrastructure essentials to hit the ground running. Software development, payment solutions, cloud computing, project management, and office space solutions all form part of a successful fintech architecture, the future of financial management fulfilment.