

Ask HN:  Looking for a Financial Startup? - BrentRitterbeck

Background:  I am analyst for a bank.  My role is somewhere between number cruncher and quant.  On some days, I'm just running calculations; on other days, I'm in the deep end of the mathematical finance pool.  I have a degree in financial engineering, and I dedicated to the field of risk management.<p>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.<p>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.<p>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.
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joncooper
Around the turn of the millenium I was a lead developer on a finance platform
that spanned order management, trade capture, and portfolio analytics,
primarily for MBS. [1]

It 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>

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brooke85
I can understand where you are coming from here. I agree with the how the
banks would react, having worked in the industry in the past and now dealing
with them from an outsider's view.

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.

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BrentRitterbeck
Brooke, thank you very much. It's nice to hear some encouragement.

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.

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GoldenMonkey
Find a customer, then build it.

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qrlawified
Where are you based?

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BrentRitterbeck
Cleveland; however, I have no issue in working remotely with someone.

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yashchandra
I have worked for banks for past 9 years. I agree that most of the software
are old, outdated and just plain fucked up. I have done so many projects where
we band-aid existing legacy systems even thought the project is called
"Strategic decommissioning of legacy platform blah blah..". Point being that
these guys are extremely difficult to penetrate into and they do not like
change. I think opportunities are boundless to create good products and sell
to these banks. But will need to go through lot of red tapes. Not to mention
the new Dodd Frank stuff. Everyone is scared as to what that is bringing and
the first question they will ask you is "Is this in compliance with Dodd Frank
regulations" specifically if related to credit, risk etc. give me a shoutout
though in case you want some more ideas. Always happy to talk.

