Whether you are scaling up your business to launch into a new market or you’re in the initial start-up phase to launch a Fintech product or service, there are some foundation layers that need to be implemented to deliver your customers the service they expect.
Putting in place your core banking system infrastructure
Implementation of your core banking system is a milestone on your journey to becoming a Fintech. It can take 6-12 months to build your own core banking system that allows you to offer domestic accounts, and to provide the infrastructure needed to connect to partners that will enable you to activate the services that provide a competitive edge. Integrated Finance can provide a white label core banking system platform that can be implemented without the complexity and time to build your own system.
As well as putting in place a core banking system, identifying the partners you need to enable these services is a challenge in itself. Not only do you need to understand which partners can support you with each part of your business operation, you need to be able to connect those partners to your core banking system. At Integrated Finance we connect our customers to our partner network, so you have the right partners to work with. We also plug those integrations into your core banking system, a process that would take 6-12 months but can happen within 6 weeks, rapidly accelerating your speed to market.
As your business grows, you will be looking at further competitor differentiators including services such as own branded debit and credit cards. This can be a hugely complex task that involves multiple partners but once achieved, offers significant pay off to your Fintech business. Integrated Finance can offer an all-in-one card programme and introductory agreements with partners, which significantly addresses the complexity that Fintechs are normally required to navigate.
Approving and ongoing monitoring of your customers
Prior to enabling your customers to transact using a domestic account, you need to put in place some preliminary measures. These include ‘Know Your Customer’ (KYC), anti-money laundering (AML) and transaction monitoring. Let us first take KYC. You need to be able to check that your customer is who they say they are and the transactions they are trying to complete are legitimate. Once they have passed KYC, they need to be verified against anti-money laundering checks. These compromise 150 lists by crime agencies of known terrorists, fraudsters, and criminals. Even once your customer has passed KYC and AML checks, transaction monitoring is required to ensure their status as a legitimate customer, undertaking legal transactions, remains the status and they don’t start to delve into illegal activities.
Offering domestic accounts
Providing domestic bank accounts is one of these steps. If a customer signs up to a bank, they would be issued a domestic account, which would give them access to the faster payment network. From an end-customer perspective, payment transfers to other countries are free, and the settlement of funds they want to transfer is almost instant. A bank outside of a domestic market can issue a local account but they wouldn’t have access to the faster payment network. They would be reliant on SWIFT for cross border transactions or international payments, which is more expensive and takes longer – as much as 3-5 days. For a Fintech, the absence of faster payments, which is a resulting benefit of providing customers with a domestic account, puts them at a competitive disadvantage in offering the services a customer would expect. The ability to provide a domestic account is essential in attracting and retaining customers. However, from a customer’s perspective, it is a baseline requirement that they expect.
Finding the right suppliers for your Fintech can be challenging
The unbundling of banking services means finding one supplier that is able to give you everything you need for your MVP is rare. A more likely avenue to market would be sourcing and using multiple providers, each offering a customised solution for a specific part of your product. However, this creates a much higher level of due diligence and technical implementation to perform.
Making sure each supplier can deliver what you need, via a channel that works for you given internal resource constraints is arguably the hardest part of building your own fintech. Integrated Finance is not a regulated entity so we can operate under any jurisdiction. Additionally, our infrastructure-as-a-service platform gives you access to on-demand core banking services, and a marketplace of pre-built connections. You and your development team no longer have to waste time setting up each individual connection, they can get on with the developments that add value to your business.
Book a demo to find out how we can support your launch and accelerate your speed to market