Why easy integration is key to generating value from fintech technologies

Of Tim FitzGerald, EMEA Financial Services Sales Manager, InterSystems

In today’s highly competitive, rapidly evolving market, financial services organizations are under constant pressure to find ways to generate more revenue and stay ahead by developing new products and services faster, while still relying solely on existing resources . .

In recent times, this has led many financial organizations to turn to external fintech solutions to help accelerate the innovation process and quickly achieve new digital opportunities. As a result, fintech partnerships have become critical components of financial institutions’ growth strategies, rather than the technology experiments they once were.

Partnering with fintech gives financial services firms the opportunity to access innovation. However, many financial services firms can bear bitter testimony to the fact that difficult and costly integration can see the value of such initiatives diminish before their eyes, and sometimes end up being lost altogether. Common challenges can vary from unforeseen problems that tie up IT resources, project costs get out of control, and timescales that deviate drastically from what was planned or desired. Ultimately, these delays can result in a loss of competitive advantage as rivals take advantage and launch similar solutions much faster.

So, to ensure innovation success, it is important that financial services firms can quickly and easily leverage and deliver new fintech services and applications by seamlessly integrating them with their existing production applications and data sources.

Getting the integration right

Fintechs have become increasingly attractive over time as they typically have access to the latest technologies, modern application methods and distribution platforms. But for banks to use these cutting-edge applications and tools effectively, these technologies must be woven into their existing infrastructure, much of which is likely to be based on legacy technology.

Successful integration therefore requires an understanding of the intricacies and idiosyncrasies of these legacy systems. It also requires knowledge of the underlying data architecture and how to connect the new technology to systems that were not built to connect in such a way. While this problem is far from insurmountable, getting it right will take time, resources and budget.

Careful consideration is also required when undertaking the integration to ensure that the resulting architecture is not too complex. After all, if it consists of multiple technology layers from different vendors, all with different versions and releases, any future change could hinder the bank’s ability to leverage the benefits they set out to achieve.

The next priority will be to decide how best to feed data from existing systems into the new system and in what format. To get around this, it is all too easy to layer mining tools on top of a host of other tools, including transformation tools, data pipeline solutions, master data management, databases and data lake technologies. However, companies will then be left with a multi-headed monster that no one fully understands.

Such an approach to data integration is also inherently complex and expensive to design, deploy, manage and maintain. Fortunately, adopting a smart data structure approach, a next-generation architecture, can provide a way for financial services firms to overcome these challenges.

Two-way connectivity – and how to achieve it

By leveraging a smart data fabric, financial services firms can connect and collect real-time event data and achieve unmatched integration capabilities using a single end-to-end platform alone. This approach helps eliminate the complexity and inefficiencies of manual integration and other legacy approaches, allowing businesses to integrate applications faster and more efficiently. It does this for businesses by essentially creating a dynamic real-time, two-way gateway between cloud-based fintech applications and their own production applications and computing resources.

The smart data fabric integrates real-time transaction and event data, along with historical and other data from the vast number of different back-end systems used by financial services organizations today. It transforms the data into a common, harmonized format to feed cloud fintech applications on demand, delivering seamless, real-time, two-way connectivity and integration with the firm’s existing legacy enterprise data, production applications and data sources.

Not only does this help organizations realize faster time to value and achieve implementations that are both simpler and easier to maintain, but it also gives institutions the flexibility needed to drive rapid innovation and keep critical initiatives on track. In addition to this, it helps future-proof their architecture by making it easier to incorporate all fintech applications and technologies available on the market, thus empowering them to respond to new opportunities and changes in their environments.

Ultimately, there is great value in being unlocked from fintech solutions and applications. However, this is only possible through quick and easy integration. By implementing a smart data structure-enabled data gateway, financial services organizations can ensure that they are able to quickly and easily integrate new solutions into their existing infrastructure to ensure they can keep pace in a rapidly evolving landscape.