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Managing hyper-growth in crypto: 4 lessons from the history of digital finance transformation

Managing hyper-growth in crypto: 4 lessons from the history of digital finance transformation

As organizations race to secure their position at the top of the fast-growing cryptocurrency space, we share four lessons to help them avoid the pitfalls of the past.


In November 2021, the global cryptocurrency market surpassed a market cap of $3 trillion. Alone, that’s an impressive figure. But when you consider that the same figure stood at $600 billion just one year ago, you start to understand just how explosive the market’s growth has been throughout 2021.


As cryptocurrencies have broken through to the mainstream, millions of new customers and investors have flocked to acquire and trade them at scale. To meet that demand, new marketplaces, brokers, and other exchange facilitators have quickly emerged and expanded their offerings.


It’s an immensely competitive space. A huge number of platforms and firms are all looking to establish their names, build loyalty, and cement their positions in this nascent — but exceptionally lucrative — market.


To do that effectively, those organizations need to do four highly demanding things at once:


  • Scale their platforms and services to facilitate rising customer and transaction volumes.

  • Innovate at speed to create differentiating services that can help them gain competitive advantage.

  • Navigate the increasingly complex regulatory landscape that’s now being put in place around the crypto market.

  • Venture into offering more traditional financial services, such as consumer-friendly payment options and convenient personal transfers.


Both the pace of change and the need to innovate are extremely high. And perhaps the biggest challenge of all is that many of the organizations vying for their share of the market have limited experience operating in the financial services industry.


They’re tech companies first and foremost — whose technology and blockchain expertise is seeing them cross over into financial services. They’re on uncharted ground in more ways than one, and they’re taking big risks to be successful there.


To help those organizations navigate their evolution from specialist platform builders into mainstream financial services providers, we’ve compiled four important lessons learned from the past decade of FS innovation. 


These are pitfalls that we’ve seen numerous institutions fall into during that time. Now, we’re sharing them to help those new to the space ensure that their desire to move quickly doesn’t see them make the same mistakes.


Lesson #1: Speed shouldn’t come at the cost of security


When organizations try to roll out new services and capabilities as quickly as possible, corners often get cut. But, in an industry like financial services, security should never be one of them.


As organizations take steps to build complete, differentiated offerings, it’s important for them to recognize that rolling those services out isn’t where their journey ends — it’s where it begins.


If security isn’t given the attention it demands, these organizations can end up building services on an unstable foundation, and potentially creating huge volumes of work for themselves later down the line.


As many of the world’s biggest financial institutions have learned throughout their own digital transformation journeys, retroactively adding advanced security to existing services isn’t easy. It’s much easier to build services that are secure by design.


That’s where the size, structure, and technical expertise of today’s emerging crypto fintechs can be a big advantage. They’re well positioned to apply practices like DevSecOps that build security into the delivery process from the earliest stage, and give responsibility to those closest to new digital capabilities.


Applied well, those practices and processes can accelerate the delivery of secure capabilities, so establishing them can be a huge boon for their future.


Lesson #2: Making the wrong tech investments can limit your long-term growth potential


One of the biggest lessons learned by large banks during their digital transformations is that even if technology meets your needs today, it can become a barrier to your growth if it isn’t chosen and implemented carefully.


With today’s crypto-related fintechs making a lot of technology decisions in a very short space of time, the danger of focusing only on short-term gains is extremely high. Whether they’re adding capacity and resources to help them scale, or purchasing new pre-built capabilities to augment their platforms, any decision can have significant implications for their future.


The technology that organizations deploy to meet their immediate needs today will be the technology that supports their operations for years to come. If they make poor decisions or get locked into technology that impedes their ability to innovate and scale easily in the future — or ties them to long, expensive licenses — it can end up limiting their growth.


Lesson #3: You need to be ready for shifts in governance and compliance


Managing evolving compliance and governance requirements is one of the largest challenges for financial services organizations. And with so much discussion around how cryptocurrency transactions will be regulated in the future, it needs to sit at the top of growing crypto fintechs’ agendas.


In the past, we’ve seen how scaling compliance and governance capabilities can lead to incredible bloat across large financial services organizations. As new needs emerge, they’ve been met by simply adding more people and resources to maintain compliance. Some firms now have teams of hundreds of people — many of them working on things that could be handled digitally, or could have been mitigated by embedding governance and compliance into product and service design.


As new entrants to this space, built on flexible digital foundations, growing crypto fintechs can avoid that bloat and revolutionize how governance and compliance are managed across the sector. Practices like Compliance as Code can change where compliance is built into development processes, and help companies avoid having to retrofit compliance into new deployments.


As the international regulatory environment around cryptocurrency evolves, it’s essential that organizations remain as flexible as possible. Any day, shifts could come that force them to completely transform governance processes and alter their operations. The organizations that are ready for those changes will be best positioned to build long-term customer loyalty and trust.


Over the years, Thoughtworks has helped numerous companies evolve their products and services in line with shifting local and international compliance standards—and the two can be very different. For example, if a crypto fintech uses a data set to identify customer trends based on trading activity, internal governance would require that almost all of the personally identifiable information is obscured. Whereas the disclosure of the same information to a body like the Commodity Futures Trading Commission would require all of that information to be transparent.


Conflicts like that are common across local and international compliance requirements. But with the right technology and data architecture, they can be managed in an effective and scalable manner.


Lesson #4: Experienced partners can help you grow quickly, and with confidence


The explosive pace of growth in the crypto space is putting pressure on organizations to become experts in finance, development, security, and regulatory compliance at the same time. That’s a tall order, and an expectation that wouldn’t typically be placed on established organizations — let alone ones that are just a few years old.


That’s where expert partners come in. Today’s growing crypto fintechs have a strong vision for where they want to be and what they want to achieve, and expert partners can help them quickly acquire the skills and capabilities needed to get there.


By working with a partner like Thoughtworks, crypto fintechs can combine their game-changing business models with financial services best practices honed over many years, and apply modern platform and development approaches to enable sustainable, secure, and compliant growth.


These companies may not have been around to witness the financial services sector’s technological transformation, but expert partners like us have. When paired with digital capabilities, that kind of expertise and insight is exactly what growing organizations need to make the right moves fast, and take their place at the top of this rapidly-growing market.


Many before you have learned these lessons the hard way. Now, you don’t have to.


At Thoughtworks, we’ve helped financial services organizations avoid all those pitfalls and more for many years. Now, as a new generation of fintechs make their names in the cryptocurrency space, we’re helping them avoid the mistakes of the past, while blazing new trails and transforming the world of finance on their terms.

Learn how we’re supporting organizations across the financial services sector