Why Devs Get Into Fintech
5 Reason To Be A Fintech Developer. And How To Start.
This post is intended for developers or would be developers trying to decide what industry they should focus on.
It’s split into 2 parts:
- The reasons to focus on fintech
- Best way to get into the industry (hint: Open Source Software)
The 5 Reasons For Fintech
1. Highest salaries
The highest salaries in finance are for developers and the highest salaries for developers are in finance.
According to the Bureau of Labor Statistics, these industries pay developers the most money:
- Machine Manufacturing (i.e. Semiconductor and Other Electronic Component Manufacturing)
- And not surprisingly, I.T. and Software Technology (i.e. Software Publishers)
The average salary for a Senior Software Engineer in finance is $106,882. Not bad.
2. Tons of growth
In 2014, venture capitalists invested $48.3 billion in 4,356 deals. At the same time, investments into fintech startups quadrupled, growing from just over $3 billion in 2013 to over $12 billion in 2014,.
Fintech has very quickly become a signification percentage of for tech investment allocation.
As it stand to reason, competition from all these fintech startups is also forcing the incumbents to invest in top engineering talent. Goldman Sachs, for example, is arguably more tech than finance these days. Of about 33,000 full-time employees at the bank, 9,000 of them are engineers and programmers.
That’s more engineers than Facebook, Twitter or LinkedIn!
And according to a number of folks that are smarter than me, fintech is just getting started.
3. Financial Exclusion vs. Inclusion
Money is great and all, but if you’re motivated by more altruistic reasons, don’t close this article just yet …
It’s fun to think of financial companies as evil corporations. However, the other side of that coin are the millions suffering from financial exclusion.
Allow me to quote Wikipedia real quick:
Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.
Imagine not being able to open a bank account, save your money safely, pay with a credit card or get insurance.
Sure, becoming a fintech develop can make you a lot of money. But that’s not all - your fintech products can help under-served and underdeveloped markets, you can increase financial inclusion, you can change the world.
4. Innovative work being done
Maybe your only knowledge of fintech is using bitcoins to buy reddit gold?
Well, there’s a bit more to it. As legendary venture capitalist Marc Andreessen points out, blockchain can potentially eliminate the need for any sort of third party – be it a bank or a governmental agency – to guarantee the exchange of digital or physical asset. Cut out middle man costs and vastly increase the financial autonomy of individuals. That’s revolutionary stuff, right?
Just a few of the cutting edge ideas and technologies being explored in fintech today:
- complex trading algorithms
- blockchain innovations
- quantom cryptology
- AI hedge funds
So, if you like a good challenge, fintech might be for you.
5. Untapped Potential
Financial services companies are some of richest in the world, it’s true. But they are also some of the oldest. The oldest bank in America, The Bank of New York, located at 1 Wall St, was founded in 1748.
By the nature of being so old, these companies have tons of legacy technology.
This is one of the main reason fintech startups are having success against established players. Current tech best practices did not exist at the time of creation for many legacy systems. On the other hand, fintech startups don’t have to worry about tech debt.
Room for improvement also means there’s room for opportunities. The same Bank of New York, for example, just recently opened the BNY Mellon Innovation Center - an office focused on emerging technologies, big data, digital and cloud-based projects.
Now, more than ever, fintech should be a go to focus for developers.
How? Join the Open Source Movement
I think for a lot of developers, fintech can seem like a closed, impenetrable community, and the only way to enter is the traditional (tedious) route of working your way into an industry: interview with a big firm, start at the bottom and become just another number.
On the other hand, it’s easy to get involved with an open source platform, and the next time a you see a job offering asking if you’ve worked with that platform before, you have a great answer. “Not only have I worked with it, I helped build it!”
Of course, if you’re a modern day developer, this isn’t a new concept for you. We all use open source technologies in our work-flow and most of us have contributed (or at least thought about contributing) to some of our favorite projects.
Why not contribute to some fintech projects? It can be a great learning opportunity and make you more valuable to fintech recruiters.
As a final “argument”, I put together a by-the-numbers presentation that shows just how impactful open source has been and will be on the fintech industry.
Open Source Software To Explore
So, you’re convinced in exploring open source fintech. But where to start? Here are a few of the more successful OOS fintech projects I’m familiar with:
Open Gamma - Market Risk
https://github.com/OpenGamma The OpenGamma Platform is designed to integrate with your existing technologies and built from the ground-up with high performance in mind.
OpenGamma is an independent, privately held company which has raised $23.35 million in capital. OpenGamma is working with some of the leading financial institutions in the world, allowing them to optimize their businesses in the evolving OTC markets with a transparent, future-proof risk platform.
Quant Connect - Trading Algorithms
https://github.com/QuantConnect Quant Connect lets you code your algorithms in a browser based IDE, using template strategies and free tick data. You can create new indicators, classes, folders and files.
Through Quant Connect’s integration with Tradier Brokerage, they can offer $1 per Equity Trade for an unlimited number of shares.
Fidor Techs - Bank Tech
https://github.com/fidor Fidor combines a full banking license with its own technology. fidorOS is a middleware that connects seamlessly to your existing core banking system. fidorOS is also a middleware written specifically for modern banking.
Wealthbot - Wealth Management, Set Free
wealthbot.io is built from the ground up for the digital age. wealthbot.io lowers your serviceable client asset threshold. Their technology can handle lower value accounts simply, efficiently and profitably.
Railslove/Epics - Payments Integration
https://github.com/railslove/epics In addition to credit card payments, wallets and Bitcoin also direct bank integration to be requested repeatedly. With EBICS example, can be automatically bank statements in different formats to retrieve, but also the submission of SEPA direct debits and SEPA credit transfers will be possible through an EBICS access. Unfortunately, not all banks offer their customers an EBICS access to this and is connected at most banks with a one-time or monthly fee.
Pivotal - Stock Interface
https://github.com/Pivotal-Open-Source-Hub/StockInference-Spark Stock Inference engine using Spring XD, Apache Geode / GemFire and Spark ML Lib. The demo uses three different regions for storing data. Create streams in SpringXD that orchestrate all data flow.
Shameless plug time
I want to especially encourage you to get involved with wealthbot.io
As CEO of wealthbot.io, I believe we are here at the right time. The virtual financial advisor movement shows no sign of slowing down and many, many wealth management firms are looking to build their own virtual presence.
Just take a look at this McKinsey white-paper if you don’t believe me.
To become virtual financial advisors, these firms will need developers and a platform. If you learn how to use and build for wealthbot.io, you will be the developer that can bring them both.
Another nice thing about working with wealthbot.io - it’s not a platform just for the enterprise. In fact, our mission is to help independent investment advisors. You can help an entrepreneurial, a bootstrapped RIA build her business from scratch.
Additional Sources:  - http://www.monster.com/career-start/a/5-best-paying-jobs-financial-services  - http://nvca.org/pressreleases/annual-venture-capital-investment-tops-48-billion-2014-reaching-highest-level-decade-according-moneytree-report/  - http://www.forbes.com/sites/chancebarnett/2015/07/22/fintech-investments-quadruple-top-trends-to-watch/