Welcome!

Related Topics: Cloud Security, Microservices Expo, Agile Computing

Cloud Security: Article

Ending the Tug of War: How Startups Can Help Banks Innovate

Startups can drive amazing innovation by rapidly iterating across ideas and testing with users

Banks face a difficult tug-of-war every day. Consumers demand innovative new services - regulators demand security, compliance and soundness of all offerings. How can a bank resist being pulled in every direction and find a middle ground?

Startups Provide Innovation
Banks can look to startup technology companies for new solutions. Startups are (at least initially) unfettered by regulations, approval committees, and long meetings. This is both a scary and exciting notion for bankers. There are a host of startups in the financial technology space, and bank-grade platforms like FIS's mFoundry originated from small teams working on an idea.

Startups can drive amazing innovation by rapidly iterating across ideas and testing with users. Startup product and service design and usability typically eclipse the made-by-committee-and-regulators look of bank applications.

Banks attend conferences throughout the year looking for innovative new partners. The excitement of possible collaborations is often tempered when you return to the office and discuss the regulatory implications with your business development and compliance teams.

Banks need a way to find compliant startups that do a great job of customer service and satisfy regulatory rules and frameworks.

Startups that Scale for Security
While the early days of a startup are heady times filled with dreaming, those that want to succeed in financial services technology must understand the environment that banks face. You can easily spot the savvier startups within their first 18-24 months - where appropriate they are already leveraging big company processes and practices, to make them look like "real" companies, even if they have only 10 or 20 people.

Signs of a bank-ready startup:

  • External certifications for security (e.g., PCI Level 1 Compliance, ISO 27001)
  • They've read the latest OCC bulletin on third-party provider compliance
  • The founder or management team has a banking or large-scale fintech background

We didn't just describe a unicorn: these startups to exist. The founders know they need a bank partner to launch their product (either as a part of the solution or as a customer). The founders understand what banks need to do from their side and they built their business from the ground up with respect for compliance.

Starting Right Leads to Efficient Compliance
Startups that build solutions that are strongly compliant are often asked: "How can a small company afford that?" While it is difficult and expensive to keep large, older organizations in compliance, smaller companies find it much faster and require much less expense.

The development of Wallaby's digital wallet software began less than two years ago, and included a strong focus on security from day one. Last month, we received our first Attestation of Compliance with PCI Level 1 Security Standards. It required twelve months and less than $50,000 to achieve this because it required so little rework and retraining.

Having participated in PCI compliance audits before, we were familiar with the requirements: We had all the basics like a firewall and anti-virus. We hired engineers for Wallaby with a security mindset. We took the approach that the standards are the minimum. We built our own tools instead of spending thousands on software.

This focus on compliance extends throughout our business. In our short history as a company, numerous partners have audited us. From our financial statements to our office, we keep everything in order at all times.

The Tug of War Ends Here
Innovative customer services and compliance can live together peacefully and productively. It is a key dynamic of working within a regulated industry that is entrusted with the security of people's financial assets. While not every new company is right for banking (and not every bank is looking to partner with startups), we believe there are methods, policies, procedures and audits that can help banks work comfortably with innovative new companies. Together we can provide improved products and services to customers and improve returns for banks.

More Stories By Matthew Goldman

Matthew Goldman is CEO and Co-Founder of Wallaby Financial, Inc. Wallaby Financial is a Pasadena, Calif.-based startup that is working to bring order to your financial life by helping you pay the right way—to earn more rewards and avoid fees, by helping you use the right credit card each time you pay. Previously, Matthew was Director of Retail Strategy at Green Dot Corporation (GDOT), the nation's leading provider of reloadable prepaid debit cards. Follow Matthew on Twitter @magoldman. Learn more about Wallaby at https://www.walla.by/

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


Latest Stories
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
Enterprises are moving to the cloud faster than most of us in security expected. CIOs are going from 0 to 100 in cloud adoption and leaving security teams in the dust. Once cloud is part of an enterprise stack, it’s unclear who has responsibility for the protection of applications, services, and data. When cloud breaches occur, whether active compromise or a publicly accessible database, the blame must fall on both service providers and users. In his session at 21st Cloud Expo, Ben Johnson, C...
"We're developing a software that is based on the cloud environment and we are providing those services to corporations and the general public," explained Seungmin Kim, CEO/CTO of SM Systems Inc., in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Enterprises are adopting Kubernetes to accelerate the development and the delivery of cloud-native applications. However, sharing a Kubernetes cluster between members of the same team can be challenging. And, sharing clusters across multiple teams is even harder. Kubernetes offers several constructs to help implement segmentation and isolation. However, these primitives can be complex to understand and apply. As a result, it’s becoming common for enterprises to end up with several clusters. Thi...
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, introduced two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a multip...
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...