Fintechs and financial institutions increasingly require flexible products and solutions for their clients in a rapidly changing technological world which demands ever more from them. With proprietary software having vendor lock in and recurring licensing costs, it is time to look for an open-source solution.
Having been involved in fintech since 2009, and in open-source since 2014, I feel well placed to talk about the advantages of open-source software solutions and how they can benefit financial institutes globally. So why does open-source matter?
“Open-source matters because there is standardization”
Open-source is important for several reasons, the main one being standardization. open-source is literally open to all developers, it is a community to which anyone is able to contribute and, as a result, there are low barriers to collaboration, unlike traditional financial products and services. The community will always outperform the individual, so in the long term, financial institutions will have the guarantee of a superior product, and standardized for everyone.
Another important benefit of Open-source software is that there is no vendor lock-in. Lock-ins make a customer dependent on that vendor for products and services, so any development or change they require will come at a cost, which can be substantial. With Open-source, there is no owner of the source code, it belongs to the community and can be developed by that same community. This also means there is no recurring license cost, which can be vital for a startup looking to get a foothold in the market.
An added benefit is that with Open-source, developers can retain IP rights on new developments that they produce, which can be a significant factor for startups
Fineract – an Open-source solution for your fintech needs
Apache Fineract is an Open-source software that represents reliable and affordable solutions to fintechs and financial institutions worldwide, and which can be deployed in any environment, from the cloud to physical locations. There are many different types of fintechs that are utilizing Fineract in order to meet their technological needs, including eWallets, Crypto Exchanges, Online Lenders, Investment Banks, and Neo Banks. So what are these enterprises looking for?
Functionalities
Fineract offers a vast array of functionalities, including options for wallet and Accounts, Loan Management Systems and KYC system functionalities. Taking KYC (Know Your Customer) as an example, Fineract is capable of managing any feature necessary for this fundamental aspect of financial operations which are becoming increasingly vital for transparent operations, including managing pictures, signatures or any documentation that may be required.
It goes without saying that both the flexibility and possibilities offered by this software are very appealing to fintechs looking to be innovative and to offer services to clients which will be far more efficient that the traditional services that people may be used to.
