The stakes are high in fintech.
As Herman Man, Chief Product Officer at BlueVine, puts it, users are willing to forgive the odd UI glitch on a consumer app — but never in a financial product. You don’t mess with the user’s money.
That said, competitive financial institutions — and the technology companies that power their increasingly digital services — must constantly innovate to retain relevance in the market. There is always some hot new startup crashing into finance, claiming to be the next great industry disruptor.
So how do you maintain sturdy tech infrastructure and a trustworthy UI while maintaining the nimble posture required to absorb and adapt to constantly changing market conditions? We checked in with three companies — founded in 2013, 2005 and 2000 — that have been successfully powering financial products for years now.
About the company: Bluevine creates financial and banking products for small businesses. Headquartered in Silicon Valley, the company has more than $750 million in funding.
Heading into 2022, what are the most disruptive technology trends shaping the fintech industry?
One trend in fintech that we’re keeping an eye on is banking-as-a-service. We’re seeing BaaS become more prominent among traditional banks as a way to better compete with fintechs. The idea behind this is that banks can’t fight fintech, so instead they become the back-end service for them. This also provides smaller community banks with an opportunity to partner with fintechs to innovate and stay ahead of the curve.
Another trend we’ve noticed over the last year is that the pandemic accelerated digital preferences among consumers and businesses, giving a leg up to digitally native fintechs.
How are your technology teams leveraging or adapting to those trends?
With more small businesses becoming digitally native, the BlueVine engineering team is working on new features to address their changing needs. Our most immediate focus is ensuring our products are flexible and mobile-first, giving business owners full power to manage their business and money from anywhere. For example, we’re enhancing permissions with a feature called account access (currently in beta) for additional users so small businesses can share the responsibility of managing finances, including transfers, payments and checks. BlueVine is looking at the ecosystem of banking as a whole and always determining where we can add the most value based on small business needs.
“The United States has more than 30 million small businesses that contribute half of both U.S. GDP and the nation’s workforce, yet only 9 percent of small business owners say their current bank meets all their needs.”
What’s the biggest technical challenge your team is working on right now?
There are a number of engineering challenges that come with building financial technology at scale. Because we’re dealing with money, we have to be robust with our offerings. With consumer apps, there’s flexibility and customer forgiveness if elements of the UI aren’t 100 percent accurate. With banking, however, every customer’s penny matters, and we have to have systems that are secure and transparent, with workflows that are clear and efficient.
For the average software engineer, what makes fintech a uniquely interesting or challenging industry to work in?
Fintech companies have a combination of capabilities that other companies don’t have. At BlueVine, we have a sophisticated model that combines traditional software, machine learning and organizational support. But what’s most unique about working in fintech as an engineer is that we combine technology with human expertise. We utilize complex technologies that are tightly integrated and support a human element within the overall operational system.
When I think about why I’m at BlueVine, I think about the fact that the United States has more than 30 million small businesses that contribute half of both U.S. GDP and the nation’s workforce, yet only 9 percent of small business owners say their current bank meets all their needs. We’re solving a unique pain point for a very important yet largely ignored group of people.
About the company: Kasasa creates banking products for community financial institutions for credit unions and small regional banks. Headquartered in Austin, the company was acquired in 2016.
Heading into 2022, what are the most disruptive technology trends shaping the fintech industry?
Disruption is an ever-present threat in the banking industry as more and more fintechs and virtual financial institutions come to market, offering technology that streamlines the consumer experience. For example, many fintechs are exploring ways to leverage AI to help consumers manage their finances — a trend that’s sure to continue well into 2022.
Despite this drastic rise in the number of fintechs aiming to “disrupt” the industry, traditional community banks and credit unions are here to stay. And it’s important to recognize that community financial institutions can use innovative technology like AI too. For example, community financial institutions can have personalized conversations with customers through chatbots to quickly answer questions, take care of everyday tasks and make recommendations. Unlike so many other fintech companies, Kasasa fully supports community financial institutions and their use of technology. Rather than act as a disruptor, we provide community banks and credit unions with the technology they need to succeed in 2021 and beyond.
How are your technology teams leveraging or adapting to those trends?
There is a misconception that community financial institutions don’t provide the same level of technology as fintechs or megabanks. At Kasasa, we’re determined to empower community banks and credit unions by equipping them with the technology and tools they need to compete and succeed. Our technology teams fully understand the importance of this. To put it into perspective, most consumers recognize the significance of eating locally rather than at a chain restaurant or buying from a local bookstore rather than placing another Amazon order. However, banking locally is just as impactful when it comes to supporting local economies and communities.
Recognizing the importance of “sustainable banking,” Kasasa’s technology teams support the needs of community financial institutions and their customers, taking into consideration evolving banking preferences. For instance, consumers today want increased flexibility and control over their finances. In response, Kasasa supplies community banks and credit unions with cutting-edge offerings that provide heightened flexibility and autonomy, such as reward checking products and “Take-Back” loan options.
“It is especially rewarding to be able to build technologies that help individuals through difficult financial decisions and processes, hopefully making their lives easier.”
What’s the biggest technical challenge your team is working on right now?
Kasasa is working on some very exciting projects that continue to drive innovation in community banking. These projects are large in scope. However, one of the most significant challenges we are dealing with is not unique to us: how to increase technology velocity by leveraging existing code and developer assets across product teams and partnering with the right players to complete the solutions we are bringing to market. Taking the right platform view of existing code assets, effectively leveraging skill sets across teams and managing cross-team programs and projects.
For the average software engineer, what makes fintech a uniquely interesting or challenging industry to work in?
Across the board, the average software engineer has the opportunity to be a part of developing innovative solutions from the ground up. Financial decisions are an integral part of every person’s life — and unfortunately, they can often be overwhelming and stressful. It is especially rewarding to be able to build technologies that help individuals through difficult financial decisions and processes, hopefully making their lives easier.
About the company: Abrigo provides financial institutions with compliance, credit risk and lending services, designed to manage risk and maximize growth. Founded in 2000, Abrigo remains a private company and acquired four other startups between 2017 and 2019.
What are the most disruptive technology trends shaping the fintech industry heading into 2022?
Woodwell: Predictive data analytics on large data sets.
Babey: Accelerated adoption of self-service and virtual business solutions, with much higher expectations from consumers.
How are your technology teams leveraging or adapting to those trends?
Woodwell: We are building a cloud-based data warehousing application that will allow us to provide our customers with deeper reporting capabilities, trend analysis and predictive algorithms.
Babey: We are making business self-service more robust via our dynamic loan application software and trying to streamline and simplify complexities to reduce the training burden. We are working to automate an ever-growing collection of internal and external services to help our customers handle more needs with less overhead.
“It is fascinating to explore and understand financial concepts that have real-world applications.”
What’s the biggest technical challenge your team is working on right now?
Woodwell: We are currently working toward a more distributed architecture and the ability to embrace containerization and cloud technologies.
Babey: Structuring some of our exciting new systems for even greater scale while maintaining security and stability of the established services our customers have integrated into their core business.
For the average software engineer, what makes fintech a uniquely interesting or challenging industry to work in?
Woodwell: It is fascinating to explore and understand financial concepts that have real-world applications, like loan approvals, amortization schedules and investing strategies. This can often help demystify these topics when we encounter them in our personal lives.
Babey: Financial operations live at the heart of all business, and solving problems in that indispensable space is satisfying and educational.