Scaling Your Fintech Business with the Right Core Banking Platform

Scaling your business means adjusting your operations to match market conditions and your main business goals.

For fintechs, the core banking platform is super critical for enabling this expansion.

This article explores different scaling methods and shows how the right core banking platform lets you grow your fintech business successfully and sustainably over the long haul.

Keeping Up as Your Clients and Transactions Multiply

When your fintech business grows, you'll probably get more clients and transactions happening on your platform. So your systems need to scale up to handle all that new client data and transactions smoothly without hiccups.

The crucial factor here is ‘workload scalability’ – your system’s capacity to fine-tune performance (and cost) based on changing demands; basically, how it adjusts when processing spikes upward (say, when your clients or transactions surge unexpectedly).

Cloud scalability is another essential ingredient for efficient business expansion. Unlike on-site hardware that's fixed, cloud platforms like Microsoft Azure and Amazon Web Services (AWS) provide built-in flexible scalability.

Cutting-edge core banking platforms tap into these cloud solutions to easily dial fintech IT resources up or down based on shifting demand. This includes scaling your servers, storage, computing power and other resources up and down smoothly. Fintechs score major benefits from this scalability since it enables cost-effective expansion of services on demand.

One day, your core banking platform needs to handle a lot of transaction volumes without breaking a sweat. It should allow your fintech to scale elastically to manage traffic spikes: make sure your platform can scale up by distributing transactions from your app over multiple machines and servers.

Geographical Expansion

The third is geographic expansion, which involves expanding your fintech operations beyond your native town into new regions and markets, often – though not always – because the local opportunities have been exhausted, there is growing demand in other locales, or there are new opportunities cropping up elsewhere.

Geographic expansion offers you the opportunity to diversify your revenue streams and exploit the vast number of markets and geographical areas out there. However, there are numerous areas where, before you operate, you are met with different regulations.

This is where leveraging capabilities of the right core banking platform can make your geographic expansion smooth sailing.

So, what capabilities should you look for in a core banking platform to support your fintech's geographic growth? Flexible platforms offer features tailored for launching in new markets:

• Hooking up with local players - Connecting with local banks, payment providers and companies is key for serving up your fintech offerings effectively in a new region. Flexible core banking platforms simplify this by enabling quick integrations with new partners. It guarantees you will be able to plug into the market and start using local mechanisms for payment, currency and networks that you’ve never used before.
• UI Localisation – being available in the local language is important, which means that the platform makes it easy for you to add more languages for the backend tools and the frontend interfaces your client or your internal users are dealing with, such as the website, app and support portal. You don’t want your clients or your staff to talk to something that doesn’t speak their language. When your fintech offering speaks their language, your clients and staff are well-pleased.
• Adapting workflows – An agile workflow engine that enables mining, spreading and tweaking processes on the fly is a key ingredient to a successful geographic expansion. Every region has its share of whacky regulations, which means you need to be able to adjust a workflow to take into account locally required deviations: extra fraud checks, or a transparency report, or whatever.
• Optimising ops ­­– The operator interface for your core banking system should offer a simple interface for adding new fees and quickly changing or removing rules, or creating bespoke reports, and other micro-adjustments for a new market.
• Localise end-user apps - The ability to customise white-label end-user applications such as mobile apps and web portals to reflect each region’s specific needs should be straightforward.

Expanding Your Product Line

Growing your fintech's product line by adding new offerings is another proven growth strategy. Spotting underserved customer needs or white space opportunities in existing or new markets can help you boost revenue and customer retention when your services expand.

But how does your core banking platform help you expand what you offer? The right adaptable platforms make it smooth and painless to integrate new capabilities like payment methods, card programs, third-party services, and more. This enables you to quickly roll out new fintech offerings to meet demand.

And if you cook up an entirely new product line, like moving into crypto or microfinance, your core system infrastructure needs to easily support incorporating these new products, services, flows, and data needs.

Ideally, your platform should allow you to access the underlying source code so your team can build custom solutions for entirely new offerings. The right core platform is like a flexible foundation you can continually build on top of.

Strategic Collaborations

For fintechs, teaming up with other companies can be extremely powerful for expansion. Strategic partnerships let you draw on the strengths of partners for mutual benefit.

Winning collaborations happen when fintechs partner with companies bringing complementary strengths to unite into an unbeatable combo - for example, by jointly delivering full solutions neither could offer alone, or launching new products together.

One example is a fintech partnering with a Banking-as-a-Service (BaaS) or embedded finance provider to offer new capabilities like payment methods, card issuance, or AML/KYC verification services.

In cases like these, your core banking platform needs to support incorporating these third-party solutions seamlessly, with ready integrations into leading BaaS, payments and identity providers. The right partnerships can mega-hack your fintech, enabling it to grow more rapidly, leveraging partners’ domain expertise, infrastructure and customer bases.

Digital Transformation

Utilizing new technologies, fintechs can share their stories and impact audiences worldwide and at all times of day from any connected device. A massive trend now is the digital transformation revolutionizing finance and making it more tech-driven, mobile and convenient.

Your customers increasingly expect seamless digital financial experiences across websites, apps, wallets, and new channels. To meet these expectations and stay competitive, fintechs need to offer state-of-the-art mobile apps, intuitive web portals, digital payment capabilities, and experiences powered by AI and big data.

Modern core banking systems play a huge role in enabling fintechs to digitally transform. By integrating sophisticated capabilities like machine learning, predictive analytics and natural language processing, your core systems can drive automation, sharpen decision-making and derive rich customer insights from data. This results in next-level efficiency, lower costs and hyper personalization.

The right digital core banking foundation allows you to rapidly deploy innovative customer experiences, while optimizing back-office functions. With a future-ready platform, fintechs can build next-gen offerings aligned to customer needs and take their business to the next level.

Final Thoughts

It is important to select a platform that fully supports the business direction, target markets, resources and capabilities of your business.

Just keep in mind that each fintech has specific scaling needs, and sometimes even totally new or customised scaling solutions that maximize the likelihood of sustainable growth for your specific fintech.

The secret is a core banking system that is agile, adaptable and future-fit, that can carry you forward with ease, whatever clients you add, whichever services you adopt, which geographies you cover, whichever products you craft and, of course, which channels you reach. Put a smart, scalable engine under your growth ambitions, and your fintech future can take any form you desire!