Welcome!

Agile Computing Authors: Yeshim Deniz, Pat Romanski, Elizabeth White, ManageEngine IT Matters, Liz McMillan

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.


@ThingsExpo Stories
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 21st Int\ernational Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive advantage. By offering a suite of proven hosting and management services, Enzu wants companies to focus on the core of their ...
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), provided an overview of various initiatives to certify the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldwide re...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 - November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
When growing capacity and power in the data center, the architectural trade-offs between server scale-up vs. scale-out continue to be debated. Both approaches are valid: scale-out adds multiple, smaller servers running in a distributed computing model, while scale-up adds fewer, more powerful servers that are capable of running larger workloads. It’s worth noting that there are additional, unique advantages that scale-up architectures offer. One big advantage is large memory and compute capacity...
New competitors, disruptive technologies, and growing expectations are pushing every business to both adopt and deliver new digital services. This ‘Digital Transformation’ demands rapid delivery and continuous iteration of new competitive services via multiple channels, which in turn demands new service delivery techniques – including DevOps. In this power panel at @DevOpsSummit 20th Cloud Expo, moderated by DevOps Conference Co-Chair Andi Mann, panelists examined how DevOps helps to meet the de...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
Artificial intelligence, machine learning, neural networks. We’re in the midst of a wave of excitement around AI such as hasn’t been seen for a few decades. But those previous periods of inflated expectations led to troughs of disappointment. Will this time be different? Most likely. Applications of AI such as predictive analytics are already decreasing costs and improving reliability of industrial machinery. Furthermore, the funding and research going into AI now comes from a wide range of com...
In this presentation, Striim CTO and founder Steve Wilkes will discuss practical strategies for counteracting fraud and cyberattacks by leveraging real-time streaming analytics. In his session at @ThingsExpo, Steve Wilkes, Founder and Chief Technology Officer at Striim, will provide a detailed look into leveraging streaming data management to correlate events in real time, and identify potential breaches across IoT and non-IoT systems throughout the enterprise. Strategies for processing massive ...
SYS-CON Events announced today that GrapeUp, the leading provider of rapid product development at the speed of business, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market acr...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
SYS-CON Events announced today that Ayehu will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on October 31 - November 2, 2017 at the Santa Clara Convention Center in Santa Clara California. Ayehu provides IT Process Automation & Orchestration solutions for IT and Security professionals to identify and resolve critical incidents and enable rapid containment, eradication, and recovery from cyber security breaches. Ayehu provides customers greater control over IT infras...
SYS-CON Events announced today that MobiDev, a client-oriented software development company, will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business...
SYS-CON Events announced today that Cloud Academy named "Bronze Sponsor" of 21st International Cloud Expo which will take place October 31 - November 2, 2017 at the Santa Clara Convention Center in Santa Clara, CA. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud com...
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business - from apparel to energy - is being rewritten by software. From planning to development to management to security, CA creates software that fuels transformation for companies in the applic...