Financial Services are Missing Out on Tech Innovation

In the latest episode of FinTech Focus TV, host Toby Babb welcomed Chris Lees, the Founder of FixSpec, for an in-depth discussion about the evolution of fintech, the challenges of connectivity, and the importance of embracing new technologies. Chris shared insights from his journey in fintech, reflecting on the origins of FixSpec and the ongoing challenges and opportunities in the industry.

The Birth of FixSpec: A Solution to Connectivity Issues

Chris began by recounting the motivation behind founding FixSpec, a company aimed at solving the persistent problem of connectivity within financial services. Drawing from his extensive background in product management across exchanges, banks, and trading system vendors, Chris recognised a common issue: the time-consuming and inefficient process of firms connecting with each other through APIs. This problem, which often resulted in lengthy delays and inefficiencies, was the driving force behind the creation of FixSpec.

Chris explained that in financial services, connectivity is often taken for granted, with firms viewing themselves as trading businesses or exchanges rather than API businesses. Despite this, almost all business interactions in this sector occur through APIs, making efficient connectivity crucial. FixSpec was established to streamline this process, making it faster and easier for firms to connect, thereby improving overall efficiency in the industry.

The Challenge of Fintech Innovation

During the conversation, Chris expressed his frustration with the fintech industry’s reluctance to embrace new technologies, despite the clear benefits. He pointed out that while other industries have rapidly adopted innovations to improve efficiency and performance, the financial services sector remains conservative and slow to change. This is partly due to regulatory pressures and the inherent risks involved in financial transactions.

Chris noted that many financial institutions still rely on outdated protocols like FIX, which predates the internet. While FIX has been instrumental in the industry’s growth, its continued use in its original form has prevented the adoption of more modern, efficient technologies. Chris argued that the industry’s attachment to traditional methods, such as relying on PDF documentation, hinders progress and innovation.

The Importance of Embracing Modern Technologies

Chris highlighted the advantages of adopting newer technologies, such as REST APIs and protocol buffers, which allow for faster, more efficient connectivity. These technologies enable the automation of code generation and testing, significantly reducing the time and resources required for firms to connect. By moving away from traditional methods and embracing digital specifications, financial services can unlock new tools and processes that enhance efficiency.

Despite the clear benefits, Chris acknowledged that the transition to new technologies is not without challenges. The industry’s reliance on FIX, coupled with the complexity of existing infrastructures, makes it difficult for firms to make significant changes. However, Chris emphasised the importance of gradually incorporating new technologies alongside traditional ones, allowing for a smoother transition and ultimately improving the industry’s overall performance.

FixSpec’s Role in the Future of Fintech

Looking to the future, Chris discussed how FixSpec is positioning itself to address the evolving needs of the fintech industry. While FixSpec continues to focus on its core mission of improving connectivity, Chris and his team are exploring new ways to support firms in navigating the complexities of modern API management. This includes considering the integration of multiple API types, such as REST and WebSocket, to meet the diverse needs of different firms.

Chris also hinted at a broader shift within the industry, where traditional financial institutions may begin to adopt practices commonly seen in the crypto space. This could lead to a more diverse set of APIs being used across the industry, allowing firms to choose the best tool for their specific needs. FixSpec aims to be at the forefront of this shift, providing the tools and services necessary to help firms adapt to the changing landscape.

A Call for Innovation in Fintech

Chris's conversation with Toby Babb on FinTech Focus TV highlighted the ongoing challenges and opportunities in the fintech industry. As financial services continue to evolve, the need for efficient connectivity and modern technology becomes increasingly important. Chris’ insights underscore the importance of innovation and the role that companies like FixSpec play in driving the industry forward.

For fintech professionals and firms looking to stay competitive, the key takeaway from this discussion is the need to embrace new technologies and methodologies. By doing so, they can improve efficiency, reduce costs, and stay ahead in an increasingly competitive market.

As the industry continues to evolve, the future of fintech will be shaped by those who are willing to innovate and adapt. FixSpec, with its focus on improving connectivity and embracing modern technologies, is well-positioned to lead the way in this new era of fintech.

FinTech Focus TV is produced in-house by Harrington Starr's marketing team. Harrington Starr is a global leader in FinTech Recruitment, helping clients place world-class Testing, Software Engineering, Sales/ Marketing, Quantitative Finance, Product Management, Network Engineering, Infrastructure Support, Data, Cyber Security, IT Risk, Cloud Engineering, Devops, Application Support, Change, Transformation and many more. 

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