We’ve been delighted to begin relationships with several global financial services leaders on some mission-critical projects that are powered by Erlang, Elixir and BEAM VM technology. Although the specifics of the work are under strict NDAs, we have outlined some of the projects in this article along with those ubiquitous end-of year musings on the broader FinTech ecosystem. You’re also invited to visit our industry hub page for more info on our experience in building scalable, reliable systems for the FinTech industry.
Recent FinTech projects
Universal multichannel bank-insurer
This firm focuses on private clients and SMEs in Northern Europe and South-East Asia. We supported the building of a mobile app which uses the highly scalable message server powered by XMPP, MongooseIM, as one of its core components.
Major African based financial services group
The Erlang-based message broker software using AMQP and MQTT, RabbitMQ, is used here for various business applications to implement critical banking operations around offers of personal and business banking, credit cards, corporate and investment banking and wealth and investment management. We reviewed the existing RabbitMQ architecture and suggested performance enhancements to deliver high availability on a Kubernetes platform in a new data centre.
US financial services organisation
This financial service firm combines traditional banking services with the offerings of a technology company to provide a comprehensive suite of products in a banking-as-a-platform solution, encompassing lending, payments and risk management. We came onboard to review the existing RabbitMQ architecture and code and to advise on a scaleup strategy to take the bank to the next level.
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What else has been happening in the FinTech space?
Global FinTech investment trends remain strong following on from a record year in 2018 (fuelled by Ant Financial’s massive $14bn deal in China). According to Innovate Finance’s report ‘A Fine Year for Fintech’, investment levels in the first eight months of 2019 were strong – with just under $17bn raised from more than 1,000 deals. According to the EY Global FinTech Index 2019 – there is a 71% UK adoption of FinTech while it’s 87% in both China and India and 46% in the US. The UK Government’s 2019 ‘UK FinTech – State of the Nation’ report, found of the 89,000 finance and insurance firms in the UK, there are over 1,600 UK FinTech companies, a figure set to double by 2030.
World FinTech Forum
In November we attended the World Fintech Forum in London. Global operators form throughout the FinTech ecosystem came together to debate important and, at times, controversial topics. You can read our blog post on the 10 Key Takeaways from the conference, we’d be happy to hear your thoughts on any of the topics covered.
Barclays Rise appearance – building scalable systems
Rise is a global community of the world’s top innovators working together to create the future of financial services. We visited them earlier this year to discuss how startups could future proof their applications via building distributed, massively scalable and fault-tolerant systems with high availability.
Dominic Perini, our Scalability Architect and Technical Lead, was presenting and you can view his presentation slides for How to Build Systems that Scale on our LinkedIn channel.
We’ll be returning to host another technical session on scalable systems for FinTech startups at Rise during the new year, stay in touch and make sure you’re the first to hear about it.
Working with FinTech Alliance
This new online portal for the global FinTech community connects the UK to a worldwide ecosystem in partnership with the UK Government. Fintech Alliance provides a multifaceted digital engagement platform to bring the global FinTech ecosystem together to explore, engage and do business.
We’re delighted to be a member of the community from the outset of the project and look forward to working together on knowledge sharing and growth of the network in 2020.
5 Top FinTech Trend Predictions for 2020
1. You need more than just great UX
Until recently, traditional financial institutions delivered similar products and services through the same channels at the same cost. Customers were forced to use slow, clunky web apps that made performing simple, everyday functions a nightmare. This was the setting where nimble FinTech startups enjoyed a serious competitive advantage over incumbents by offering slick, mobile-centric user experiences. Great UX is now standard in every new FinTech innovation and product launch. In order to onboard new users in 2020, FinTech companies need to move towards more inventive ways to win business and retain existing customers. Hyper-personalisation, through successful use of the vast amounts of data being collected, will be one of the key competitive differentiators in the industry.
2. Blockchain or DLT use to increase
Gartner, the global technology research firm, estimates that the blockchain market will be worth roughly $23 billion by 2023. Blockchain technology holds the power to improve trust, provide transparency and potentially lower costs, reduce transaction times and improve cash flow. Moving forward it won’t just be the giants like JP Morgan, Citigroup and Wells Fargo who are investing serious resources into blockchain.
Of course, caution does remain around blockchain initiatives, due to the issues of regulation, scalability and interoperability. Global banker, Arzu Toren, was a guest contributor to our blog considering the big questions in blockchain. BEAM VM, which Erlang runs on, is ideal for blockchain development – our friends at ArcBlock joined us for a webinar on using the BEAM for blockchain and also wrote about the key advantage of using Erlang for blockchain development projects.
Ultimately, true advancements will emerge from the intersections of different disciplines. Interfaces of blockchain technologies with other technologies (AI, ML, IoT) need to be explored as the field moves to actual design and engineering.
3. More AI in financial services
While Gartner estimates the blockchain market will be worth roughly $23 billion by 2023, the estimated business value created by AI is a whopping $3.9 trillion in 2022. The key to using AI in FS will focus on the ability to create personalisation at scale and in real-time.
With the use of data and concerns over security and privacy of paramount importance, when FS companies use AI in the decision-making process they need to factor a human into the loop. This is partly out of regulatory necessity but also because there are inherent fears that, if AI is left to operate autonomously, then something might go wrong. We’ve all seen the Terminator films, right? Well, while I can’t necessarily imagine my Robinhood robo advisor going rogue and chasing me across the US, I do sleep better at night knowing that ultimately there is some human accountability in place when it comes to my money.
4. 5G and IoT set to impact
The 5th generation of mobile connectivity promises superfast download and upload speeds as well as more stable connections. 5G mobile data networks started to be deployed in 2019 and availability will expand in 2020. The greatest initial impact will be that all components in the Internet of Things (IoT) universe will be able to connect with each other seamlessly, collecting and transferring more data than ever.
Financial institutions will need to understand the business implications of having super-fast and stable internet access everywhere. From a customer experience perspective, virtual assistants will be able to provide more contextual recommendations in real-time.
5. Execution over tech exotica
As with startups in any industry, what differentiates those that succeed from the rest is the ability to execute – deploying new apps and digital products rapidly, getting to market in the shortest time possible and being scale ready from the start. This agile mentality is not generally associated with traditional banks and financial institutions but is one that is being increasingly adopted by those incumbents proactively looking to maintain their competitive position.
In many instances, leading FinTech companies are not working with new technologies, they are using established battle-tested open-source tech whenever possible to be able to concentrate their resources on areas of their business which will determine their success. It’s this strategic mindset which looks set to offer the best opportunity for longevity and survival in the FinTech space.
We are currently experiencing a rate of technological change in banking like never before. Disruptive enabling technology’s use will continue to usher in the next great leap in the growth of FinTech in 2020. New FinTech related investments and innovations for the consumer and enterprise markets will continue to prosper with prototypes and POCs evolving into full scale, consumer facing apps and digital products.
Erlang Solutions works with partners, including Vocalink/Mastercard, Danske Bank, Safaricom, Bloomberg and OTP Bank, to prototype, design, build, monitor and maintain hyper-reliable, scalable and concurrent solutions for blockchain, smart contracts, TPS and switching solutions.