How Fintechs Can Benefit from Integration Transparency

Fintech is extremely convoluted. Market leaders combine different products by the dozens under their umbrellas. With this in mind, it’s quite challenging even for professionals to figure out how all these products are connected internally and externally. Therefore, further development of the ecosystem is slow and inefficient. This factor and many others drive the trend of integration transparency forward these days. 

Companies that hold the biggest market share usually combine many sublines of business by building their own products and adding features or through mergers and acquisitions. The information about the connections between the parts isn’t always publically available, which may cause confusion when the other potentially beneficial partners consider integrating with the company.  

Ryan Anderson from Vestwell points out that such confusion and delay in making partnerships result in Fintechs suffering great profit losses:  

“A delay can always have a direct impact on revenue because there will always be partners or clients withholding business until a certain integration or feature exists. That said, we’ve found the most important thing we can offer is transparency. We [at Vestwell] have a very good grasp on our product roadmap and regularly share details with the advisors, enterprises, and payroll providers we work with so they can plan their own sales strategies accordingly.” 

Swati Bairathi from 55ip also highlights the importance of free data flow across various platforms in every line of business:  

“The Wealthtech world is an increasingly connected place with data flowing between various service or product providers as the clients demand best-of-breed solutions and look for specialized offerings for each functional area.” 

When we consider these thoughts, we can see the market is drastically in need of accelerated integrations and streamlined processes for matchmaking between various service providers. 

Why are integrations delayed?

The absence of clear requirements for integration or a description of the API freezes the implementation to three months on average, says Vadym Shvydkyi, Head of Software Delivery at INSART. The reason for such a dramatic delay is the organization’s complex platforms that are to be integrated with each other. The tech vendor isn’t able to access the inner structure of the companies they integrate with to get the necessary input data and convey requirements for an integration project until the reps of the companies do this. This results in three months of downtime for a development team after signing the integration contract. However, if there’s a huge experience in such implementations in place, the technology vendor may slightly streamline figuring out the data through robust processes and pinpointed questions to both parties during the requirements elicitation step. 

This is a good example of how delay influences the profits a company can earn by implementing client-side integrations. Let’s assume that on December 1 a company signs a contract with a new client and provides them access to the API. The estimated value the contract will bring in is $20,000 a month, $240,000 annum. However, they can start charging them only after they implement your API. 

“Any delay in integrating with additional platforms would mean a suboptimal experience for advisors on these platforms and continued operational overhead on our resources.” — Swati Bairathi, 55ip

The other reason for a delay in implementing planned integrations is the lack of development resources, either software engineers or the time of senior management necessary to manage integration teams. Often the pitfall on the road to scaling the development team is the packed schedule of a CTO, which makes it impossible to delegate the implementation to the team, or security concerns and a bureaucratized process. In fact, the2019 Deloitte Global Human Capital Trends research says only 8 percent of companies know how to delegate software tasks to dedicated teams, which prevents many business people from considering scaling their software development resources. An obscure structure also complicates any changes that may help to scale teams, whereas transparent processes in a company make it easier to add development resources quicker. The structured framework to working with dedicated integration teams may be useful to overcome the issue; still, there are other factors that influence integration dealmaking.