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Startups face Integration challenges with Banks

Of past year a lot of noise have been created by the Fintech sector and loads of start-ups have mushroomed. With many innovative ideas the primary assumption is that, when we have the empirical data then the trends, modelling, any exploratory or discovery driven models will get the best solutions for the end users.

To realize this vision, one primary thing is required. DATA. All startups know that Banks or any legacy financial services company owns the data and they shield the data as their treasure cove. So the first goal for most of these startups is to get endorsement or get any of these big banks as their POC customers, that give them a little glimpse of the data that the partner or mentoring bank would be willing to share or expose.

Once the small startup team can see the data, then they can identify the chinks in the armors and improvise on the shaky idea to a strong data driven test that will mature the algorithms and hence a more stabilized performance of the application proposed to the big partner and to the end markets i.e. to the end users.

All said and done, banks are slowly but surely are getting a little bold themselves and are allowing the sandboxes to these startups to play with the data, before they identify their golden use case and zero in on monetizing it.

A couple of months, and some successful use cases displayed, comes the success of getting the nod to productionizing the overall solution. And comes with it the real challenge to open the right access routines and place this solution to the production environment of the company. The hoops a startup needs to go through before anything hits production is frustrating and very disturbing to a cash strapped startup.

If you talk to many startups, you’ll realize the challenge of getting anything hitting any of their client’s production environment is tremendous. The security polices, the firewall changes, the IT Security Department’s approvals for the strategic deployment of anything on production adds stress to the project timelines & funding.

 

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Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 22 January, 2018, 17:54Be the first to give this comment the thumbs up 0 likes

Startups are driven by credos like "fail fast", "iterate", and so on. While okay for selling t-shirts, apples and oranges, a typical startup approach is catastrophic while handling money. I'm glad banks are making it hard for startups to access their production systems. And, in any case, I haven't come across a single earth-shattering product from a fintech that'd make me want to rush to get it.

Shailendra Malik
Shailendra Malik - DBS Bank - Singapore 22 January, 2018, 23:19Be the first to give this comment the thumbs up 0 likes

I beg to defer. Yes there are stronmg entry barriers for start ups to get into financial sectors, thats okay and understandable but many times the reason of delays in integration is purely driven by lax culture of managing production systems themselves, and the ingrained inertia to change to something new. I am all in for delayes due to security clearances, additional testing including Penetration tests for the new solutions with incresed threat through DDoS or other brute force attacks, but what gets challenging is unwillingness to change.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 23 January, 2018, 09:011 like 1 like

Then you should also beg to differ with your own post. Your post raises concerns about delays caused by "security polices,..." but your comment seems to accept delays caused by "security clearances", etc. Besides, I don't see any mention in your post of your concerns about delays caused by lax culture, ingrained inertia, etc., which are mentioned only in your comment?

Anyway, as I said before, "I'm glad banks are making it hard for startups to access their production systems." I really don't care why that's the case.

Shailendra Malik

Shailendra Malik

SVP - Tech Delivery (Data Platform)

DBS Bank

Member since

25 Apr 2016

Location

Singapore

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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