October 10, 2016
One of the core differences between the FinTech world and traditional financial institutions lies in the underlying technology and the level of freedom to build it. Unlike traditional banks, FinTech startups are free from legacy systems and operate mostly in the area of law that allows them to be relatively free. Hence, they can build their services on experimental algorithms and pivot them as they please to find the best solution.
Startups can also take a mixed approach and source underlying technology solutions for different services from the best in the market – other tech companies specializing in banking technology. Whichever is the choice, the bottom line is that FinTech startups are free to either build their proprietary back-office solutions or source the best technology and custom-build their back-office (or mix it all up) relatively freely.