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Last updated: Aug 17, 2022

Qualifications for fintech engineers

Author: David Kornhaber
Last updated: Aug 17, 2022
What's inside

Fintechs hitting growth milestones — from seed round to Pre-IPO and beyond — face the same good-problem-to-have as any other startup: how to smoothly onboard a squad of new engineers. But fintechs confront a second set of hurdles many other startups don’t face when bringing in software developers, namely finding skilled candidates who also possess critical, sector-specific knowledge.

The devs you hire must know traditional finance, fintech, and regtech like the back of their hands. If they're working on a product related to the stock market, then they need to easily differentiate between market staples like a call, a put, and a stop loss, and they should be able to toss around insider terms like elDV, AISP, APA, CFI, and EBITDA as casually as frisbees.

Hire engineers without this fund of knowledge, and you can expect to hit multiple potholes along the software development road. Not to mention that you might just be putting your entire business at risk in downright scary ways.

Understanding of financial industry products

First up: Fintech developers need to know the products and processes at the heart of the traditional financial industry: stocks, bonds, and derivatives, along with prospecting, account maintenance, and the like.

Vention Head of Fintech Sales Andrew Madigan stresses the importance of financial product know-how with every client. "There's a lot of commonality across most engineering sectors," he says. "Very roughly speaking, if you can create a platform to sell bananas, you can create a platform to sell shoes, without necessarily having to know the difference between bananas and shoes. But if you're creating an OTC derivatives platform, you must know what OTC derivatives are, what function they serve, and how they work."

Engineers who aren't conversant in financial industry offerings are at risk of missing fintech-specific issues because they don't know what to look for. A bona fide fintech engineer comes to their work so well-versed in the products that make the financial world go ‘round that they can spot fintech-coding red flags that those products raise. Case in point: When our financial-data client Barchart came to us for a core revamp and all-new capabilities, we could deliver a robust, scalable solution quickly because our engineers already had deep, relevant industry knowledge.

"I talk to ambitious engineers all the time," says Vention Head of Fintech Andrew Haines. "I tell them that you can be an engineer, or you can be a fintech engineer. A fintech engineer is someone I can explain a street-level finance-business problem to, and they come up with a coding-level tech solution for it. They understand the financial sector on a granular level, with no need for a translator."

One other benefit that this level of expertise delivers: Qualified fintech engineers know how customers use financial information and systems in the real world. They understand that coding problems in a fintech product could lead not only to lost time or lost convenience but potentially lost money and diminished (or even destroyed) customer loyalty.

A grasp of legal aspects

Given that numerous agencies govern finance (in the US alone: SEC, FINRA, FDIC, OCC, etc.), you have to hire fintech developers who understand and factor for the regulatory environment in which the software and products they build will operate. Imagine, for a moment, the perils of a dev building a wealth management product not knowing about fair valuation codes, or one assembling a lending product having no idea that federal fair lending laws often sit alongside individual state regulations.

Our workplace-investing client Vestwell operates across the US. One API project we undertook for them required us to change core logic to accommodate the particulars of individual state plans (we dedicated an entire team to produce a system for Oregon). The task was hiccup-free because our engineering crew was well-versed in the nuances of inter- and intra-state regulations.

A sensitivity to regulations among devs becomes doubly important when you consider that the relatively loose regulatory environment fintechs have enjoyed for years is changing. Fintechs are beginning to face the same level of scrutiny as their cousins in traditional finance; engineers who are ready for this will make life that much easier for companies trying to concentrate on growing their business.

“Products are one side of the fintech coin,” says Haines, “Regulatory compliance is the other. Engineers who know both are exceptionally valuable to a client.”

Ready to take on your next fintech project?

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Expertise in cybersecurity

Knowledge of the financial world is only one fintech engineer gotta-have. Software development for financial companies takes place within a security context unlike that of any other sector.

Many industries deal in information consumers hold dear — the healthcare and legal sectors, for instance. But no industry handles quite the flavor of "charged" data as the one people entrust with their money. And cyber-criminals never tire in their attempts to breach fintechs' data security ramparts, as the Evilnum hacking group's dogged efforts to hack European systems illustrate.

Whether hiring fintech engineers yourself or through a vendor, you must be sure they’re qualified in the security requirements of the systems they’re building.

Security standards vary by region — from the US to the EU to Asia and everywhere in between — and every area offers its own certification programs. Haines urges US fintechs to look for devs who have earned cybersecurity certifications such as CIISP (Certified Information Systems Security Professional) or CISA (Certified Information Systems Auditor).

For our part, Vention is slightly fanatical on the subject of security; our security audits are a cornerstone of our practice.

The right mindset

Product knowledge, regulatory compliance, security: three areas beyond coding over which successful fintech engineers must have mastery. But there’s one more quality fintech experts possess: a particular mindset.

Haines says that most talented engineers are visionaries — hopeful souls who dream about the wonderful things their work can accomplish.

"But the truly valuable fintech engineer is just the opposite," he says. "This is a person who has a hacker mentality, who can imagine everything that can go wrong with a system, the awful things that could happen if the company's walls are penetrated by the wrong people."

The highest-level fintech engineers realize that a hacker only has to succeed once, so they must design systems that succeed time after time, all while being scalable, flexible, and reliable. It's not a particularly rose-colored worldview. But it is the right way to view engineering challenges when industries, fortunes, and livelihoods are on the line every day.

The sector-specific demands of fintech engineering go far beyond the "does-it-work?" standard that can apply in less sensitive business arenas. It's a skill set that not everyone possesses. But those who do present unmatched value to a fintech on the move.