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Digital FinTech: A Technology Challenge

The FinTech term was coined in the recent 10–15 years when Internet connectivity, cloud-based technology services and the traditional data-centric process of financial institutions started to coincide in one business. Over the years banks, lenders, debt collectors, and credit score agencies initiated a shift to expand their data acquisition and data management methods. Internet’s user access to an enormous number of commercial websites, mobile applications, online purchasing, and social networks had created a new universe for consumers where in order to receive goods or plan a trip providers would just require the number of their credit card. Online payments were the first form of a widespread financial automation thus empowering the technology to enter the financial business world.

The technology though was not limited only to automate and expand the business opportunities for already established financial institutions and services. Entirely new businesses were created with the digital financial service element as the core of their business model. These companies are more of an IT and data processing companies with the added financial services value rather than traditional institutional banking or money moving businesses. A good example is the payment portals that made it quite easy for mobile app developers all over the world to offer paid services inside their applications.

The modern FinTech company is three separate business endeavours unified in one solution:

- Financial operations management
- Cross-border legal activities
- Information technology integration and data automation

technology illustration

One particular segment in the FinTech world are the emerging automated and technology-driven debt collection companies where data exchange with the creditor (a company that has to receive late payments) and the debtor (business or individual that is owing a late payment) is conveniently automated with API messages and web or mobile applications. This model is quite scalable and it’s suited for companies with a large number of claims (submitted via API) as well as for small and medium-sized businesses that can submit a moderate number of claims using a web application on the debt collection agency’s website. As receivables management services are getting extensively digitalised, late payment processing is becoming a more automated activity, where all parties involved can track the progress, manage the funds exchange and establish affordable payment planning. Technology allows for transparency between creditor and debtor, where the collection agency is an entrusted partner.

FinTech information technology is primarily operating in a highly distributed environment where cloud-based data locations and third-party services are used by the FinTech company software in order to operate the business model. There is usually no single point of entry, neither the software is limited on a single computer, server or even geographical location. The concept of collaborating software “services” (applications running on different hardware and software platforms) is the key to creating a business domain-driven approach to solve particular tasks. Some of the services can be outsourced or supplied by entrusted third-party provider. As an example, many banks, lenders and collection agencies use outside companies to automatically enrich data they have for account holders, debtors and partners. Usually, the core technology of a FinTech company is confined to the very essence of the automation for a particular financial business model (e.g. payday lending, invoice-to-cash, factoring, collection, etc.).

The nature of the technology-driven process is opening business possibilities that were considered impossible 10 years ago. Data is not just stored, but it is constantly enriched with complex machine-learning algorithms and that’s why the decision-making process is less dependent on human error. The Internet is so information-rich environment that the FinTech business is looking at all publicly available data to offer more competitive execution of its service. The communication to the involved customers and partners is digitalised and software platforms such as complex web portals and mobile apps are the norm for a modern FinTech company.

The fast software technology innovation pace is creating a big challenge for any digitalised business in order to keep up with the new software tools, network protocols, UI and UX, authentication models and information security and encryption mechanisms. With the increased computing power there are new directions for research and development and innovation. A FinTech company needs to be on the edge of today’s IT and always look for the future. The IT department teams require software development and integration skills and proficiency in general programming, scripting, data mining, machine learning algorithms, non-RDBMS free document model databases, event-driven and microservices architecture.

eCollect is a fast-growing digitalised FintTech company offering technology integration to traditional financial businesses by automating the data acquisition, data augmentation and validation, processing of collection claims and reporting services. eCollect’s technology is based on JSON API for full tech integration with its clients and partners, but also fully functional web application is provided for easy data entry when the number of claims is relatively small. The persons or organisations contacted by eCollect during the receivables management process can use the company web portal for information regarding the claims they need to pay and all the due fees and claim-related information. eCollect is fully aimed to become “Submit and let us handle it” business augmented by technology and driven towards the cashless future of money exchange.