Based on text provided by Eduardo Martinez Garcia, CEO and Co-Founder, Toqio.
In the rapidly evolving landscape of the financial service industry, many companies are starting to consider launching their own embedded finance solutions so as to better cater to their customers’ needs. But where to start? And, most importantly, how much will a project like this cost? Money and time to market are two of the most critical aspects of creating a project from scratch, so in this article, I thought we’d go over all expenditures in order. Bear in mind that many of these costs can lead to incremental savings year after year if used effectively, even though prices will likely increase as time passes. Realistically, the quicker you can get a project done, the cheaper it is.
As an example, Eduardo comments extensively on the technology required to produce an embedded finance solution:
In general, many tech stacks are built on open-source software, a massive cost saver for most businesses. That said, proper development tools are a must-have. These stacks are best-of-breed tools that are scalable to be used by any size business. They include React, React Native, Java, Springboot, MongoDB, Docker, and others.
Once you have your technology stack chosen, you’ll need to consider the financial services you want to integrate, such as banking services, payment solutions, card programmes, lending products, and others. There are scads of pre-built modules you can pay for to be included in your embedded finance project, like real-time currency exchange rates, chat or call integration, etc. Many may be optional, it really depends on what you’re trying to build.
Though many of these tools may be free or low-cost, you’re going to need qualified people to handle development and testing, which normally amounts to two front-end developers, two back-end developers, and at least one QA testing specialist. If you already have a team of developers in place, you also need to consider how many of their regular tasks they won’t be doing while you build your new embedded finance solution, how much training they’ll need if they don’t have it, and what sort of hardware-software they’ll require to work efficiently. Bear in mind, that’s the minimum, you may need more staff to get things done more quickly or to create a dedicated internal squad. Based on what we spend on technology at Toqio, and considering the average starting pay for specific positions in the EU, we estimate a minimum spend of €200,000 for staff and around €77,900 for tech stack.
To learn about what Eduardo has to say about other costs associated with embedded finance projects, including required infrastructure, product development, post-launch support, please read more here:
What it actually costs to build a fintech solution