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5 Ways to Avoid Technical Debt in Fintech

person coding on laptop

Last summer, my son told me that he wanted to start a frozen lemonade stand in our neighborhood.

As any mom of a young entrepreneur would, I entertained the idea and asked what he had in mind. “I’ve already done the research! I’ll only need a squeezer, blender, cooler, cups, and the ingredients,” he said confidently.

Knowing we already had a blender, I offered to take him to the store to grab supplies. While he shopped for the lemons and simple syrup, I found a hand-held lemon squeezer and threw it in the cart. When he saw this, he gave me a bewildered look and said, “Mom. That is never going to work. It may for the first few customers, but as soon as I want to grow the business, I’m toast. We have to think long-term here.”

My son is 8 and knows more about scaling a business than I do.

A few boxes of lemons and a $79.99 industrial lemon squeezer later, financed with all-you-can-drink frozen lemonade for mom, he was off to start his lemonade empire. And I realized my husband and I raised a tycoon.

As my son was keenly aware, cutting corners early in a process can lead to being forced to make reparations in the future. This “debt” can become costly as you seek to scale a business.

Fintech companies are all too familiar with concepts of debt, leverage, and paydowns. In the technology side of the business, another kind of debt exists with surprising similarities. Technical debt describes design or coding practices that leave structural flaws or will require future refinement by development teams.

Technical debt is often viewed as the trade-off between short-term and long-term value in a technology product. While there are sometimes perceived benefits to the short-term in quickly releasing a product or feature, there are often long-term implications. Technical debt can be avoided, but it requires committed action from an entire development team. Here are five ways to avoid technical debt in your organization.

Clear communication on feature requirements

One of the most significant causes of technical debt is inability for the development team and product team to align on product features, scope, and audience. The classic game of “telephone” is a prime example of this. As features are passed from the business to product and on to the engineers, details can be lost or misconstrued. 

When features are being developed, it’s essential for all team members to be aligned on the use cases and “day in the life” of the end user. This does not stop at the high-level requirements, either. Discussing how edge-case scenarios can affect desired outcomes, as well as future states of the product or audience, is a primary way to avoid unneeded technical debt, as coding can be structured around these assumptions.

 Realistic development timelines

Unrealistic timelines can force developers to cut corners. Unlike construction projects where rushed completions can be obvious, technical debt created by hastened timelines can go unnoticed and come back to haunt development teams.

When features are on the line, there can be pressure to deliver the working functionality. However, there are often more efficient ways to get to the desired outcome with the proper coding structure. This means using proper libraries, correctly building for edge-case scenarios, and accounting for all potential data permutations.

A key consideration to avoiding technical debt is clearly defining the requirements and understanding the true timeline of development. These timelines then need to be communicated across the entire chain of command. Realistic development timelines ensure the code is built the right way, with less need to revisit in the future.

 Follow good coding practices 

Avoiding technical debt is a team effort that requires a defined process. Development teams should adopt a standard of coding practices, with all team members adhering to the same guidelines. 

Good coding practices include abstraction, leveraging common libraries, and avoiding tight coupling between components. These practices can prevent business risks down the line, with security as a primary example. 

Security is crucial in the fintech industry, as data is usually considered sensitive by data protection authorities. Development teams building solutions that process this sensitive information must leverage the proper encryption libraries to ensure data is secure. Adopting standards in a development program is a significant advantage in combating technical debt. 

 Building a balanced team

A proper team structure is important for checks and balances in any organization. This is especially pertinent for a development team. With a well-planned team structure, you have team members incentivized in the right way to make sure things aren’t missed. 

The absence of a balanced team can be risky, as there can be a conflict of interest that leads to rushed development or missed testing. In a development team, there should be owners responsible for product outlining, development, testing, and timing. For an Agile environment, these roles would be titled product owners, developers, quality assurance, and scrum masters. 

By properly structuring a team, guardrails are put into place that help align incentives toward a common goal of delivering secure, efficient features.

 Review and revise technical decisions

Ongoing monitoring of software infrastructure and integrations is crucial for any organization, but in fintech, it’s especially critical. With the introduction of new technologies and ever-evolving regulatory frameworks, a company’s software infrastructure, storage solutions, or functionality can quickly become outdated. This can be a leading contributor to technical debt.

Technical decisions should continuously be reviewed and revised. In addition to aging source code, engineers are constantly expanding their knowledge. It’s important to revise older, less efficient code to see what can be refactored.

 Let us help you avoid technical debt in your organization

Some degree of technical debt is inevitable in any organization, but there are actionable ways to avoid it. Measures can be taken across staffing, development, and infrastructure to reduce and avoid technical debt. Core10 can be the innovation partner you’re looking for. Contact us to discuss your goals for reducing technical debt.


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