Their customers have come to expect a level of security and dependability from their financial services providers with good reason, as the wellbeing of individuals and businesses alike often depends on the trustworthiness of these institutions.

In contrast, the fintech industry has introduced a new era of agility and innovation. Without the burden of legacy systems, fintechs have the freedom to rapidly develop value-added services using modern technology such as cloud, artificial intelligence, and event-driven serverless architecture. Fintech companies have the advantage of quickly adapting to market demands and evolving needs without the long arm of bureaucracy and outdated infrastructure which is incompatible with modern technology stacks.

The dichotomy between stability and agility has created a unique challenge for fintech companies looking to disrupt the financial services technical landscape. Whilst advanced technologies offer the potential for transformative change, they cannot ignore the demand for trust and familiarity that is deeply ingrained in the industry. Interestingly, the relationship between these two types of businesses is often symbiotic, as the fintech’s customer base usually comprises those very same traditional firms. Traditional financial institutions possess a vast amount of customer data, industry expertise, and established distribution channels, all of which can be leveraged by more agile fintechs to develop innovative solutions. Conversely, fintechs offer traditional firms the opportunity to enhance their own capabilities, modernise their operations, and add value to their customers by integrating these solutions which could not be done in-house. This mutually beneficial partnership allows both parties to capitalise on their respective strengths, creating an ecosystem that drives progress in the industry as a whole.

One way to bridge the gap between the advanced technologies of fintechs and the stability needs of traditional institutions is for the fintech to put an interface layer between their core product and the customer which insulates the consuming institution from the underlying technology. This interface is more palatable to a risk-averse financial services company, providing similar stability, security, and reliability that aligns with the expectations of the industry. By abstracting away the complexity of the underlying technologies, a fintech company can present a seamless and intuitive experience which directly adds value to its customers.

At the core of this interface is a robust and highly resilient infrastructure which ensures the reliability and scalability of services that a financial institution would be comfortable with. Comprehensive security measures such as encryption everywhere, tightly scoped permissions, and an air-gapped tenancy model, are just a few measures which safeguard the sensitive information entrusted to the company. This secure foundation is essential for building trust with the traditional financial institutions who still have regulatory obligations and hold their customer data in the highest regard.

This hardened interface layer insulates the main product, which is delivering all the value, which can incorporate cutting-edge technologies like artificial intelligence, event-driven architectures, and comprehensive telemetry. Once the interface delivers the "traditional" data into the fintechs product offering, the real value can be unlocked through advanced data enrichment, predictive analytics, and innovative applications of emerging technologies like blockchain. This layered approach is what enables fintechs to deliver actionable insights on raw data and transformative solutions which these institutions can benefit from.

The financial services industry is undergoing a profound transformation as agility and innovation of fintechs collides with the stability and trust of traditional institutions. The most successful players in this market are finding ways to adapt to the traditional nature of the industry and leverage their strengths, rather than try and disrupt them. Fintechs have the advantage of agility, as they are unencumbered by legacy systems and bureaucracy, which is what gives them runway to implement new technology to address evolving market needs. By harnessing things like blockchain, generative AI, and big data analytics, fintechs are redefining what is possible in financial services. Rapid decision making means quicker resolution on customer pain points, and fintechs can bring products to market at a pace which simply cannot be matched by a financial institution. At the same time, traditional financial institutions have valuable assets which fintechs cannot replicate themselves, such as deep industry expertise, extensive customer relationships, and trust that can only be earned over time. By forging strategic partnerships, these established players can harness the creativity and technical agility of fintech, thus modernising their own operations and enhancing their customer value.