04 February 2021

Erlang Solutions: resilience, scalability and the future of financial services 

Written By FinTech Alliance

Erlang Solutions: resilience, scalability and the future of financial services 

Resilience across sectors 

The iconic, brutalist AT&T Long Lines building in Manhattan, which was built in 1974 to house telecom switches, included a tank in the basement with enough fuel to power the generator for two weeks in case of a blackout. Even if there was a total power outage across New York, emergency calls could still be connected. 

Francesco Cesarini, Co-Founder and Technical Director at Erlang Solutions, says financial services companies need a petrol tank of their own – or at least some means of staying up and running in the event of a crisis. From his many years of experience in the telecommunications sector, Cesarini says there are a lot of lessons from telco that can be applied to FinTech – not just the need for a backup power supply – when resilience is tested. 

This past year has placed huge demand on financial services, exposing many systems that weren’t built with scalability and reliability in mind from the get-go. Cesarini says this mirrors what he saw in the telco space back in the 90s. Distributed, scalable full product systems have always needed to handle massive spikes in usage. Then, it was everyone picking up the phone to wish their friends a happy new year; now, it’s online payments at a time when nobody can leave the house. 

 

Resilience from day one 

“Scalability and reliability aren’t things you can bolt on as an afterthought; that results in a very poor user experience,” says Cesarini. “Especially in the FinTech space when this happens, customers can very quickly move to alternative providers. Financial services by its nature is high volume, and its important data is being passed on reliably. So we can apply lessons from other verticals, like the telco space, in FinTech.” 

The need to scale quickly and reliably isn’t the only similarity that can be drawn between the two industries. “Telcos used to be slow, large and inflexible monopolies. But in the 80s and 90s, markets became deregulated and they had to become agile. This was the only way for them to go in head-to-head with the challenger operators, be they mobile or fixed networks.”

Today, larger telco providers are carriers providing infrastructure for innovative new players – and Cesarini predicts this will be mirrored in financial services. “This will allow smaller players to step in and gain market share, leveraging the existing infrastructure of the larger providers.” 

 

How partnership builds resilience

In this new, competitive and changing marketplace, Erlang aims to help its partners deal with the challenges of resilience and scale – not only by building software in Erlang, Elixir and other BEAM technologies, but offering support and consultancy through the journey of digital transformation. With its clients ranging from startups to Fortune 500, FinTechs are a key focus for the business, and it’s an interesting area for Cesarini. “We want to support with the reliability and scalability of the product, because FinTech leaders are best placed to concentrate on aspects like customer experience and making their ideas happen.” 

The answer, Cesarini believes, is to have no single points of failure. In other words: “You need two of absolutely everything,” While that might seem a daunting task, he’s keen to add that you don’t need to build a huge team in order to achieve resilience early on. Just look at WhatsApp, which was built using the Erlang programming language and is a key client of Erlang Solutions. “When they got acquired by Facebook, people were sending more messages a day on WhatsApp than all the SMS messages in the world – but they did this with a backend team of 10 developers,” recalls Cesarini. 

“So you really don’t need hundreds of people as long as you build the technology right in the first place,” he explains. “The focus for WhatsApp from day one was scalability. We helped them ensure the platform would be reliable very early on, before they even had an office actually.” 

For many FinTechs, this focus on reliability involves making tough decisions. Founders want to get their product off the ground fast – but as the business succeeds, the tech must scale to match. Cesarini says it’s possible to marry the two: you just need the right technology, and to be thinking about scalability from day one. “You can go to market with the MVP and test your idea, but in parallel you need to focus on the back end of your structure too.”

This is where a good technology partnership is vital very early on. “They can focus on the customer facing aspects like user experience, which is what they’re good at. What happens after you’ve pressed the button is irrelevant, as long as it works – and that’s where we step in.” 

 

Lessons learned 

For the coming year, Erlang Solutions will leverage its relationship with its parent Trifork Group to provide comprehensive end-to-end services to its clients and help them scale – not least in the FinTech space, working with notable names like Klarna as well as exciting startups in the blockchain space. 

Key challenges will include operating in the “new normal” which will be a hybrid of the physical and digital. An interesting area for Cesarini is the potential for blockchain to bring solutions into developing markets. “We want to help create banking services where they are not currently available – and we can do that by embracing blockchain beyond just the buzzword,” he explains. 

Exploring new ideas becomes easier when you can quickly put a minimum viable product in place, safe in the knowledge that when the innovation gets off the ground it will be able to scale and reach as wide an audience as possible. FinTechs will certainly remember the lessons they have learned in 2020 when it comes to resilience, and can also benefit from the experience of other sectors when it comes to building products that last – even if they don’t immediately install a petrol tank in their basement.

 

 

A new look for 2021... 

Erlang Solutions has recently worked with our clients and partners to better understand the areas where we excel. These key areas have been used as the core of a refreshed brand built on the foundation of the three building blocks of our business over the last 20 years: Capability, Consultancy and Community.


We will continue to bring our expertise in building the reliable, scalable, fault-tolerant technologies that financial services need to our current and future FinTech project engagements. To see our exciting new visual language in action please visit our new website - we’d love to hear your thoughts.

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