Ask HN: Looking for a Financial Startup?
I have identified a piece of software, used by many in a role similar to mine, that is simply insufficient for the regulatory environment the banking industry is moving towards. The GUI is slow. Documentation for anything beyond rudimentary functionality is practically nonexistent. What documentation that does exist sometimes contains significant errors. At times the system will simply return nonsense. At other times the system may not even finish, crapping out hours into a run.
I remember Paul writing about approaching banking from a tangent. This is that tangent. Not only is the software used for interest rate risk purposes (what I do), it's also used for liquidity modeling, credit modeling, and capital modeling.
I'm fairly comfortable with C++. Are there any people on HN looking to start a financial risk management software company? Are there any people with a background in credit modeling, interest rate modeling, etc. that would like to be a cofounder? I am 100% confident that this space could use a new company. Feel free to contact me. My email address should be visible.
11 comments
[ 3.0 ms ] story [ 38.8 ms ] threadIt is a sisyphysian task to sell software like this into a bank. Let me recommend the following: run screaming as far and fast as you can.
The main reasons:
- "Nobody ever got fired for buying [the existing standard]."
- "If your software fails we have no entity of any value to sue."
- There is a large existing power structure at financial firms aligned behind existing solutions. Folks who have made it their job to understand the [often crappy] systems and to maintain them. These people do not want to lose their niche.
- Verifying the correctness of your solution is extremely hard and the standard of verification required is very high.
Folks that are winning in this space, like Sungard and Imagine, have largely become services businesses. IMO that's the only viable way to play in this space.
[1] http://www.beyondbond.com/index.php
My father will never be able to retire. What funds he did set aside were slowly used up when he was unemployed. He lost his job at the height of the financial crisis. Now, the root cause of the financial crisis has been, and continues to be, hotly debated; however, I side with the people who claim risk was poorly understood, and as a result, poorly measured. My involvement with risk management is directly linked to what I have seen my father experience. I hope that clears things up.
However, it is not right to just keep accepting that the banks will always have their way, so we just throw our hands in the air and give up. It is time this old school industry was disrupted and I can see this beginning to happen with start-ups that challenge traditional banking. (such as TransferWize and Pygg)
If the banks refuse these new types of products that have been suggested in this post, then other disruptive partners could join together to tackle the industry. In saying this, there are some banks willing to challenge traditional methods, such as HSBC, who outsource most of their IT development to create the best products for their clients. In this regard, in Australia at least, they are considered a threat by the local big four banks. All in all it won't be easy as Jon pointed out, but nothing worth doing ever is.
I am not passionate about finance so this project is not for me, but I wish you all the best Brent and hope to see changes in the industry in the future from potential disruptor's like yourself.
I work inside the system. I try to push for change, but there is only so much I can do before I start to upset people. My coworkers laugh at me every time I talk about unseating this vendor.
I believe open sourcing the software will eliminate the inertia, as the software would be free (as in beer), fully auditable, and fully customizable. The money that used to go towards an expensive contract can now go towards buying expertise in the construction of the models the software will implement.