Financial Industry Prefers Cheaper, Quicker Fintech Projects

A study by business-to-business technology PR consultancy CCgroup has revealed that in the last 12 months, the majority (63 per cent) of fintech projects in capital markets have required investments of $500,000 or less.

Almost half of projects are below $250,000

Of these, 45 per cent required investments of below $250,000, and only a tiny minority required investments greater than one million dollars.

New stage in fintech evolution

According to CCgroup, this predominantly low level of investments per project signals a new stage in the evolution of the fintech sector: a move towards smaller, shorter-term endeavors, rather than large-scale tech overhauls and transformations.

Lower costs, faster implementation

One reason for this change is that larger-scale projects are more time-consuming and labor-intensive. Another is that everyone is cutting costs in the financial services field, so many players prefer to move some of their operations to the Cloud Cloud The cloud or cloud computing helps provides data and applications that can be accessed from nearly any location in the world so long as a stable Internet connection exists. Categorized into three cloud services, cloud computing is segmented into Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). In terms of trading, the versatility of the cloud service allows retail traders the ability to test out new trading strategies, backtest pre-existing conc The cloud or cloud computing helps provides data and applications that can be accessed from nearly any location in the world so long as a stable Internet connection exists. Categorized into three cloud services, cloud computing is segmented into Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS). In terms of trading, the versatility of the cloud service allows retail traders the ability to test out new trading strategies, backtest pre-existing conc Read this Term, which requires less capital expenditure. In this respect, CCgroup cites data from Aite Group showing that spending on cloud services from capital market participants will grow to $3.2 billion in two years, from $2.5 billion in 2014.

Reputation determines choice of vendor

Fintech companies could use more insight to gain competitive edge

Another question that the survey sought to answer was, from among 30 capital market companies (of which 55 per cent were Buy-Side Buy-Side The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim Read this Term and 45 per cent were sell-side), how are the buyers of fintech services selecting the suppliers.

According to Imran Majid, Deputy Head of Fintech at CCgroup, the process of deciding which vendor of fintech services to choose was complex, involving a variety of factors, leading among which was the vendors’ reputation.

Traditional values meet need for disruption

“The buying and influencer landscape in capital markets is a dichotomy. Capital markets firms are forward thinking in terms of eschewing major technology investments, to focus on CAPEX-light projects. In contrast, traditional influencing factors such as relationships, reputation and profile make the difference when a buyer is selecting a vendor,” says Majid.

“This contrast highlights the need for insight to inform the strategy of sales and marketing teams. With better intelligence, FinTech companies can stand out from the pack and gain a bigger slice of the market.”