How can fintechs leverage open source in finance to accelerate innovation and efficiency?


How can fintechs leverage open source in finance to accelerate innovation and efficiency?

How can fintechs leverage open source in finance to accelerate innovation and efficiency?

The financial services industry (FSI) is a long-time consumer of open source, yet OS software and standards development are not activities at the core of FSI business models and tech strategies. Contribution to and publishing of open source in development, or allocating staff resources are still in their infancy.

If this is still new territory for the finance industry as a whole, how can fintechs and regtechs (especially ones with solid footing in OS development of their software or APIs) work through the larger open source in finance ecosystem to accelerate innovation and efficiency?

And – what other benefits will fintechs find by collaborating with this larger community of buy-side banks, sell-side firms, cloud service providers and regulators found in foundations like FINOS – the Fintech Open Source Foundation and the Linux Foundation?

Open source bedrock benefits for fintechs

Let’s talk about how the bedrock benefits of open source allow for quicker speed-to-market, cutting down the non-IP, “let’s not reinvent the wheel” work that is always needed for software development. This happens more often in finance through co-opetition, leading to more opportunities for everyone involved.

As Hilary Carter, VP of Research at the Linux Foundation said at the London Open Source in Finance Forum (OSFF):

How are fierce competitors within the industry coming together across open source technology projects and creating solutions, as well as shared value? Together, through shared collaboration and research, not just in building code bases but by sharing data and insight on the journey, on the pain points, on the common challenges. We’re creating a resource that everyone in the industry can benefit from.”

Fintechs can seize on this opportunity by gaining knowledge of financial services developers through direct interaction and collaboration on FSI-based open source projects. At OSFF London, Minesh Patel, CTO of REGnosys, talked about the takeaways from a three-day tech sprint on a trade processing regulation issue that REGnosys worked directly on with Morgan Stanley, Microsoft, and FINOS, using only open source components.

Participating in, and contributing to, OS projects gives fintechs and regtechs direct access, visibility, and lead generation with senior bank technology leaders.

How about learning the best methods to leverage the OS business model from commercial open source leaders? Fintechs can create grassroots engagement and cut out the sales/qualifications processes. This has the potential to start without funding, and if it picks up you can then go for venture-backing.

Fintech start-up OpenBB saw this as it secured $8.5 million in seed funding in Q1 2022 off of the OS project Gamestonk Terminal. For good measure, OpenBB founder and CEO Didier Lopes then doubled down on this draw of open source for fintechs in his OSFF talk about why proprietary investment research platforms won’t last.

How about shortening the journey to regulatory compliance by leveraging FSI’s experience in regulatory implementations, open sourced in just the past couple of years?

Steven Hawkins, head of DevOps transformation at ClearBank discussed how the bank leverages OS to accelerate crypto payments through its cloud API infrastructure at OSFF London. He also posited being a challenger bank – also considered a fintech – could find synergies within a larger OS community – leveraging the experience of larger banks in open source, as well as dealing with financial regulatory bodies.

From reduction in developmental costs, streamlined interoperability, efficiency in corrections and essential coding by a community of developers, organisations have become increasingly more accepting of open source as a key component of their core business model.

Fintechs are especially primed to profit from these inherent open source benefits, but even more so by being involved in the larger open source in finance community.

Get involved with the FINOS community

The FINOS Community offers projects around desktop interoperability (FDC3), digitising business logic and regulation innovation (Morphir) and curated service designs for cloud providers meeting external and internal regulatory and security controls (Compliant Financial Infrastructure – CFI) as well as 44 more all over horizontal of financial technology.

Submit your talk now for OSFF NYC happening on 8 December 2022 or join us as an attendee using the code OSFFNYCFF20 for 20% off.

Fill out the 2022 State of Open Source in Financial Services Survey and download the 2021 version to get a baseline.





Image and article originally from www.fintechfutures.com. Read the original article here.