What is a backend financial infrastructure provider?

What is a backend financial infrastructure provider?

For new and seasoned financial companies alike, effective backend infrastructure is key. However, instead of prioritizing the backend, many companies focus mainly on the frontend. In these instances, a company will spend its time and money writing appealing content and creating visually appealing designs. And while flashy home screens and memorable taglines are important for businesses, they’re second to functionality.  

If your clients can’t use your apps to make transactions or access their accounts, they’ll have little reason to work with you. Additionally, you can’t go to market or expand your offerings without first optimizing your product’s speed, uptime, and overall efficiency. Yet, backend infrastructure often remains an afterthought for companies who view frontend infrastructure as more important.  

In truth, a financial company must optimize both frontend and backend infrastructure, including APIs, if it wants to remain competitive. While frontend infrastructure plays a significant role in attracting clients, backend financial infrastructure helps ensure things are done correctly from a regulatory standpoint. And if you really want to ensure that your products are compliant and competitive, you’ll need a backend financial infrastructure provider to help you. 

What is Backend Infrastructure? 

At its most basic, backend infrastructure refers to all the server-side programming that powers the frontend. The frontend, also called the client side, includes everything seen by a user, such as log-in portals or contact forms. In other words, although the frontend is the visible part of a company’s offerings, it would be unusable without backend infrastructure.  

While the frontend is mostly powered by CSS, HTML, and JavaScript, the backend consists of servers and databases. When information is entered into the frontend, it passes through a server, which authenticates said information before sending it along to a database. The database then grabs the requested information and transmits it back to the frontend via the server. 

A good backend infrastructure developer must be able to create and manage these databases. They must have the tools to ensure accurate data authentication and transmission. Additionally, they should be skilled at implementing and integrating APIs to make the process even more seamless. They should also be knowledgeable and skilled in the industry so that they can keep up with your company’s growth, provide solutions correctly and quickly, and help guide your company’s development.

In short, your backend financial infrastructure developer must provide:

Scalability

As your business grows, your infrastructure should grow and evolve with you. Over time, you’ll require more advanced infrastructure in order to perform new tasks. You’ll also need enhanced infrastructure to improve upon old tasks, making them faster and more efficient for your users.

If your backend financial infrastructure provider can’t keep up with your growth, it’s important to find a new one. New offerings mean nothing if your clients can’t access and use them. Additionally, over time, certain technologies will become outdated and even unusable. In these instances, you won’t be able to provide for your clients’ needs, and they might just find a new provider.

In the world of crypto, adaptability is especially important, and companies that can’t keep up will quickly be left behind. For example, new tokens are emerging daily, and crypto exchanges must be able to provide their clients with the on/off ramps to use these different cryptocurrencies. Furthermore, new regulations are continuously developing. And if you can’t implement new regulatory processes into your infrastructure, from a legal standpoint, your infrastructure might as well be unusable.  

Legal Compliance 

Companies have unique legal needs when dealing in digital assets. For example, crypto exchanges operating in the US must at a minimum be registered as money services businesses or MSBs. As regulated financial institutions, MSBs must have compliance programs and fight financial crime, which requires teams of experts and dedicated systems.  

Of course, different companies will have different legal responsibilities, so it’s worth researching which ones specifically fit your business and consulting a legal expert. By partnering with a regulated financial institution that offers APIs and other backend services to support your growth, you may be able to move into new markets more quickly in the future.

Reliable Service 

Since backend infrastructure powers the frontend, consistent uptime is integral. Issues with servers or databases could lead to downtime, which might equal significant delays for your clients. Additionally, if your company infrastructure can’t authenticate data, your employees might have trouble performing certain job functions. In turn, this will mean even more downtime and frustration for both your employees and clients. 

A reliable backend financial infrastructure provider will be able to update and manage your systems when the unexpected occurs. And in cases where downtime is inevitable, they’ll keep that downtime to a minimum. In turn, your own operations can continue smoothly, which means that your clients will be able to continue conducting their own business as well. 

Secure Solutions

Security is key for online operations. This is especially true when it comes to financial infrastructure, which is a clear entry point for a variety of cyberattacks. If your infrastructure is prone to bugs, breaches, or breaking, it will be less reliable, and in the long-run, less scalable. Additionally, it will open your company up to potential reputational and financial damage. 

For these reasons, it’s important that you work with a backend financial infrastructure provider who knows what they’re doing and why it needs to be done right. A good backend financial infrastructure provider will care about security, and they’ll work hard to keep you and your clients safe. For some, this might mean offering suggestions for ways in which your company can improve its security footing. In other cases, it will likely mean outlining and implementing specific procedures and protocols for your APIs, such as IP whitelisting and user management.  

Security can be an afterthought for companies, or they might not realize how another company’s security posturing can impact their own. However, if you’re working with an unsafe company, your own company might be at risk. Via third-party supply chain attacks, your company could become compromised, which could lead to monetary and reputational ruin. You never want this to happen, especially when the target is your important files and programming. Thus, it’s also important that your backend financial infrastructure embodies safe practices itself. 

In short, your financial infrastructure provider must help you adapt, maintain, and secure your infrastructure, especially when it comes to your APIs. 

The Role of APIs in Financial Infrastructure

When implementing financial infrastructure, APIs, or application programming interfaces, essentially serve as the go-between for frontend and backend infrastructure. They’re the reason why information is able to be sent back and forth between the two, interpreted, and then given a response. Ideally, they should also allow for increased automation and efficiency while being asset agnostic. This will allow them to easily integrate with a variety of other products. 

Usually, because APIs are crucial for business functionality, they are seen as part of backend infrastructure. Other times, however, they’re seen as their own specialized offering. Regardless of how they’re categorized, their importance is second-to-none. For crypto companies especially, APIs can simplify the process of daily operations while increasing performance, automation, speed, and accuracy. However, when supplied by more than one provider, APIs can also create complications.

The more providers you have, the more work goes into the implementation and interconnection of their solutions, creating inefficiencies, magnifying workloads, and increasing the risk of an attack. Additionally, companies who work with multiple providers may face organizational and upkeep issues. For example, if there’s a problem in one of their services, they might need to reach out to multiple providers in order to solve it or even understand where the problem lies.  

Working with a single API provider solves many of these challenges. With Prime Trust’s all-in-one suite of APIs, you can take full advantage of financial infrastructure that touches each part of a user’s crypto journey. Prime Trust’s APIs include: 

  1. Custody: enables quick and secure custody or sub-custody of both fiat and digital assets, supported by a variety of account types.

  2. Payment Rails: allows for fiat movement supported by retail-friendly rails like ACH or debit/credit and institutional rails such as wire or signet transfers. Payment Rails keeps you one step ahead of fraud with scans on all transactions to help reduce exposure to some of the most common types of fraud while maintaining frictionless transactions.

  3. Liquidity: enables crypto-to-fiat trading pairs effortlessly and compliantly by sourcing from a deep pool of liquidity across leading market makers. 

  4. Compliance: delivers effective financial crime prevention and detection at scale using cutting-edge technology and a broad set of data sources, including watchlists, fraud databases, transaction monitoring systems, and document verification services

  5. Settlement: allows real-time, 24x7 counterparty settlement of funds and assets within the network, ensuring your assets are where you want them to be when you need them to be there.

  6. Capital Raise Platform: an all-in-one, SEC-compliant solution designed to help crowdfunding portals, platforms, issuers, and broker dealers raise money online.

  7. Debit Cards: a white-label card issuance program that lets you easily launch a branded debit card program, giving your users access to their fiat custodial balances through a physical or mobile wallet-supported debit card. Debit Cards is currently available through an invite-only beta. 

  8. Coming Soon - Crypto IRA: an easy-to-integrate API solution for users to create accounts to hold and trade crypto with tax benefits. Backed by Prime Trust’s all-in-one APIs, the Crypto IRA is a single integration point providing access to IRA functionality as well as Prime Trust Compliance, Custody, Liquidity, and Payment Rails APIs. 

Now that you’ve seen all the ways in which backend infrastructure and APIs can help your company, you might be wondering why you need a provider at all. Much in the same way that multiple providers can increase complexity, handling everything in-house isn’t the answer, either.

The Risks of In-House Backend Infrastructure Providers

While handling your backend infrastructure and APIs in-house is certainly possible, it’s inadvisable. Working with a provider is simply easier and usually less expensive. Additionally, if you choose not to work with a provider, then everything we mentioned before–scalability, reliability, and security–becomes that much harder to implement. 

Financial companies need scalability in order to keep up with changing financial legislation and new income sources. A company that couldn’t manage crypto ten years ago would be at a loss if they were unable to accept it today. But if your infrastructure is managed entirely in-house, you’re missing out on the expertise offered by a provider. This provider will be experienced in working with a variety of other companies. Thus, they’ll have an idea of where finance is headed, which will help them create and optimize your systems accordingly. 

Being able to stay online and operational is also key for financial companies. And with the fast-moving speed of crypto, even a single delay could mean huge losses. In turn, said delays could mean lost clientele or even reputational damage. Again, avoiding these delays requires specialized skills. And while someone in-house might have those skills, they simply can’t compete with the wealth of knowledge that comes from outsourcing to a bigger company. 

Finally, when compared to other businesses, financial companies are especially at risk for cyberattacks. And when it comes to cryptocurrencies, that risk can be even higher. Already, multiple companies have fallen to attackers and lost millions or more in revenue. But if you have the proper safety features in place, and if those features are monitored, your risk drastically decreases. Of course, managing those risks on your own takes time and manpower, which can be difficult to handle in-house. 

Working with a provider saves you time and money, and partnering with Prime Trust ensures the best experience. Our all-in-one APIs offer increased security and functionality, and our customizable solutions are scalable and dependable. If you’d like to learn more about Prime Trust’s backend infrastructure offerings, reach out to our sales team today

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