FintechOS’ $58.2M raise underlines the salience of low-code development platforms in FIs’ digital transformations

The Europe-based startup secured €51 million ($58.2 million) in a Series B funding round led by Draper Esprit to fuel ambitious international expansion into North America and Asia-Pacific, per Finextra. FintechOS’ platform lets banks and insurers—like Raiffeisen Bank and Société Générale—quickly launch new digital products by tapping into the fintech’s low-code framework and plug-and-play solutions.

FintechOS has grown its client base rapidly since its 2017 launch thanks to its ability to unshackle financial institutions (FIs) from restrictive legacy systems, helping them meet customer experience demands.

  • FintechOS grew its annual recurring revenue by 450% during 2019 and is expected to have clocked similar levels of growth in 2020. FIs’ reliance on their legacy infrastructure hinders the velocity of product development because their systems implement upgrades more slowly than modern digital architecture. FintechOS’ low-code approach lets FIs rapidly launch digital products that can be built on top of, or around, legacy systems.
  • The low-cost and self-service approach also lets FIs implement a multispeed change approach to overhauling their core systems. While it is a strategic priority for incumbent FIs to overhaul their core systems, it is a time-consuming and expensive process, and they face pressure to meet rising customer expectations concurrently. Thus, rolling out new digital products via FintechOS’ plug-and-play framework—which requires little technical expertise to run and is cheaper than building solutions in-house—lets FIs meet customer demands while pressing on with modernizing their legacy infrastructure.

Incumbent insurers are funneling resources toward their digital transformations to meet multiple pressures, and this represents a lucrative opportunity for FintechOS. Despite large coronavirus-related payouts, insurers are still forecast to grow their tech spend in key global markets at a faster rate through 2024 than in 2020 as they digitize their entire businesses. FintechOS’ solutions let insurers reduce the cost of maintaining their legacy systems—which constitutes some 70% of their IT budgets—by creating efficiencies while also adding new prebuilt products like claims management solutions. Thus, we expect FintechOS will strike a host of new incumbent insurers as partners to drive further growth.