Welcome!

Agile Computing Authors: Elizabeth White, Pat Romanski, Dana Gardner, William Schmarzo, Janakiram MSV

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
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
19th Cloud Expo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterpri...
Akana has announced the availability of version 8 of its API Management solution. The Akana Platform provides an end-to-end API Management solution for designing, implementing, securing, managing, monitoring, and publishing APIs. It is available as a SaaS platform, on-premises, and as a hybrid deployment. Version 8 introduces a lot of new functionality, all aimed at offering customers the richest API Management capabilities in a way that is easier than ever for API and app developers to use.
Personalization has long been the holy grail of marketing. Simply stated, communicate the most relevant offer to the right person and you will increase sales. To achieve this, you must understand the individual. Consequently, digital marketers developed many ways to gather and leverage customer information to deliver targeted experiences. In his session at @ThingsExpo, Lou Casal, Founder and Principal Consultant at Practicala, discussed how the Internet of Things (IoT) has accelerated our abil...
With so much going on in this space you could be forgiven for thinking you were always working with yesterday’s technologies. So much change, so quickly. What do you do if you have to build a solution from the ground up that is expected to live in the field for at least 5-10 years? This is the challenge we faced when we looked to refresh our existing 10-year-old custom hardware stack to measure the fullness of trash cans and compactors.
The emerging Internet of Everything creates tremendous new opportunities for customer engagement and business model innovation. However, enterprises must overcome a number of critical challenges to bring these new solutions to market. In his session at @ThingsExpo, Michael Martin, CTO/CIO at nfrastructure, outlined these key challenges and recommended approaches for overcoming them to achieve speed and agility in the design, development and implementation of Internet of Everything solutions wi...
Cloud computing is being adopted in one form or another by 94% of enterprises today. Tens of billions of new devices are being connected to The Internet of Things. And Big Data is driving this bus. An exponential increase is expected in the amount of information being processed, managed, analyzed, and acted upon by enterprise IT. This amazing is not part of some distant future - it is happening today. One report shows a 650% increase in enterprise data by 2020. Other estimates are even higher....
I wanted to gather all of my Internet of Things (IOT) blogs into a single blog (that I could later use with my University of San Francisco (USF) Big Data “MBA” course). However as I started to pull these blogs together, I realized that my IOT discussion lacked a vision; it lacked an end point towards which an organization could drive their IOT envisioning, proof of value, app dev, data engineering and data science efforts. And I think that the IOT end point is really quite simple…
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th 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 devices - comp...
"My role is working with customers, helping them go through this digital transformation. I spend a lot of time talking to banks, big industries, manufacturers working through how they are integrating and transforming their IT platforms and moving them forward," explained William Morrish, General Manager Product Sales at Interoute, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 19th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world and ThingsExpo Silicon Valley Call for Papers is now open.
Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more business becomes digital the more stakeholders are interested in this data including how it relates to business. Some of these people have never used a monitoring tool before. They have a question on their mind like “How is my application doing” but no id...
SYS-CON Events announced today that Venafi, the Immune System for the Internet™ and the leading provider of Next Generation Trust Protection, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Venafi is the Immune System for the Internet™ that protects the foundation of all cybersecurity – cryptographic keys and digital certificates – so they can’t be misused by bad guys in attacks...
Smart Cities are here to stay, but for their promise to be delivered, the data they produce must not be put in new siloes. In his session at @ThingsExpo, Mathias Herberts, Co-founder and CTO of Cityzen Data, will deep dive into best practices that will ensure a successful smart city journey.
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...