4 Financial Data Challenges Your Fintech Will Probably Face (and How to Tackle Them)

Chelsea Caltuna
August 18, 2020

No one ever said running a startup was easy (definitely not us – we’ve been through it all before). We asked some of our customers what financial data challenges they faced while trying to build successful fintech startups. Here’s what they said:

Getting priced out of the “big names” in financial services.

The challenge:

Despite the digitization of financial data and developments in AI and machine learning, financial data (and other financial services) can be prohibitively expensive for startups and early-stage companies. Big name companies like Bloomberg often have a price threshold of tens of thousands of dollars…a month.

The solution:

Look around the fintech community. Not only can you find more competitive pricing, you have the opportunity to support an emerging company. Todd Flores, founder of Spartan Capital Intelligence, explains: “What I learned in times like these was that there were other disruptors in the financial services industry, offering products that were equal to or better than the traditional brand names, and at a more equitable price point (I am talking 1/10th the price)! Lesson learned: Turn to other disruptors in the fintech space for partnerships, they often offer lower cost agreements, provide much better service, and can speed up the development for your business's fintech solutions to get you to market more rapidly.”

Debating whether to outsource development or keep it in-house.

The challenge:

Fintechs have limited resources. “SCI has experienced occasions where we have identified a need for specific types of data formatted in a digestible manner for ML,” says Flores. “At this decision point, we either 1) dedicate the money, time, and personnel resources to develop the system ourselves or 2) look to other businesses in the fintech ecosystem to find a solution.”

The solution:

There’s no right answer here – it depends on your resources and available skill set. If you choose to outsource, look for developers with fintech experience. “Developers with comprehensive finance knowledge are hard to come by,” says Ulrich Ebensperger, CEO and co-founder of Ziggma Portfolio Manager. “This makes the whole development process even more complex than it already is. Not only do you have to communicate what you want to implement but you also have to put yourself in the developers’ shoes who naturally have a much more limited knowledge of the finance and accounting space. Going through this process has clearly improved our communication skills.”

James Mason, CEO of Transparent Traders, used Intrinio’s custom development services to build out his swing trading platform. “Every time work was done to build my product, they always surpassed my expectations,” says Mason. “[We] decided not to hire any developers in our company since there isn’t a need to search for anyone else.”

Finding financial data in a cloud-first platform.

The challenge:

“It was hard for us to find a data provider that makes it possible to access financial data on the cloud at a reasonable price,” says Quang Pham, CIO of Alquant. “It felt like the major data providers are still quite focused on selling their terminals. If they do provide access from the cloud, the price was horrendous. Quite often, they were overwhelmed by our requests. Sometimes, it felt like we were the only quantitative asset manager asking for access from the cloud.”

The solution:

Terminals might still be the solution of choice for large, traditional financial firms, but they’re not practical or cost-effective for a smaller company. Fortunately, a handful of companies (like Intrinio – that’s why Alquant picked us) cover an entire company under one license and make data available on any computer via a web-based portal.

Scaling financial data as your business grows.

The challenge:

When you’re first starting out, you probably don’t need (and can’t afford) enormous data sets full of feeds that aren’t crucial to your platform. But, as you grow, you need the ability to expand your data consumption – whether that means a wider variety of feeds or a higher limit on API calls. “It was important for us to be able to select only the data that we needed at the time in order to avoid having crazy costs while using only a small amount of all the available data, but then be able to add different data as our needs are evolving,” says Pham.

The solution:

The magic word is customization. Look for a financial data provider that can build a fully custom solution for you instead of forcing you into a one-size-fits-all package. This ensures you’re not paying for too much or getting too little, and you can make changes as your business needs evolve.

Want to learn more about how Intrinio helps fintechs with affordable, customizable, cloud-first financial data solutions? Check us out at intrinio.com.

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