Refinancing Like Clockwork at VAI

Guest post by Sara Brodin, CTO, VAI Trade GmbH

Ice cream for dogs, children’s furniture, online sellers on Shopify. What do they all have in common? They are all companies who have identified the opportunity of increased revenue growth by leveraging the VAI refinancing platform. By focusing on the underserved SME sector and strong product values like customer satisfaction and data-driven methods, VAI Trade has entered the refinancing industry as a breath of fresh air.

As a financial company, risk and compliance will always be our foundation, and our experts make tough decisions every day. In comparison to bigger players who focus on refinancing a handful of larger companies, however, VAI’s business is designed around a large and diverse portfolio of companies of various sizes within various industries. This way of reducing risk has come to be beneficial, especially in today’s Germany. With volume comes other challenges, though. With many active customers having integrated VAI into their accounting, and many more waiting in the pipeline, technology and automation becomes a critical and a key enabler to the growth of the company.

As many companies do, we also started our journey with manual processes and low-tech automations. But with the number of data points moving across departments on a daily basis, especially as they have a built-in exponential factor, creating a solid and transparent platform became an early priority.

Our Technical Landscape

In contrast to classic technology stacks often found in fintech startups, the stack that we are using here at VAI is more inspired by modern industry standards. As a small disclaimer, we decided early on that going for our own banking license would slow us down rather than accelerate the growth of the company during the first years. This means that we can leverage certain technologies today that might not be options in a few years. Keeping this regulation-heavy migration on our minds, while at the same time scaling up our current business, is a key responsibility of many IT departments in our field that few people talk about. Perhaps this is why IT is seen as a blocker in many companies, instead of an enabler. We understood early on that having a scalable and low-maintenance infrastructure would be a key advantage. It allows us to have fast-paced product development and, on the other side, sleep better on nights and weekends while our customers continue to use our platform. We later discovered that a modern system also had a good impact on recruiting, which is always an upside in the crowded Berlin market.

At VAI, we prefer leveraging highly managed services. AWS Lambda, Amazon S3, Amazon DynamoDB and Amazon Kinesis are staples while scrolling through our Terraform repositories. By using Lambdas for running our service code, DynamoDB for storage, and Kinesis for publishing and subscribing to events, we have found our architecture boilerplate. As we also work with larger data files imported from external services, S3 provides both cheap storage and useful triggers for decoupling processes. In addition to this, we have an Amazon ECS cluster for older core services that we are not in a hurry to move or infrastructural components. We are not actively adding services into the ECS cluster, but it is important to me to keep the operational knowledge in the team, as this would be a possible migration path towards a bank-licensed system. After starting with a more container-based solution, we are moving more and more towards serverless. In the B2B fintech landscape, the load is not always the key challenge, and we have seen that serverless provides value from both a pure cost perspective and from a resource point of view looking how long it takes to debug problems and build new features, especially when processing larger chunks of data.

High-level overview of VAI backend

The last technology we integrated was Amazon CloudFront CDN for our frontends. When moving from server-side rendering, a relic from our early days, to a more SPA focus, this technology definitely helped us simplify a process that should always work and not occupy developer time. As a fun side effect, we now have frontend developers that are curious about Terraform. We are happy with AWS as a platform, but also a partner. There is always something new to learn, and something to dive into during our Friday Learning Sessions. At the same time, AWS gives us the tools to work on critical infrastructure where a mistake can be devastating. Before every decision in our platform we ask ourselves two main questions. Is this the right technology right now? And is this still a platform allowing developers to make the most of their capacity? By leveraging the right AWS services for our event-based micro service backend we came into a position where we can deliver new features without constantly remodeling the past. This makes us faster, and allows us to use developer time where the business needs it the most.

What is next for IT?

As everyone working within finance would agree, financial and process edge cases will never go away and our internal departments will always need some kind of support. But with a system where a service can be added in a day and we can easily support an average of 10 services per developer, we can support these internal needs and at the same time put focus on the startup cornerstones; growth and innovation. Working on strengthening our risk IP, finding new ways to reach customers and turning monetization ideas into quick prototypes, we have our work set out for us. From a technical point of view we are looking forward to moving more and more of our platform towards true event sourcing. While we are doing this, AWS enables us to move fast as a business, and makes sure that our developers are being challenged and can evolve their career as software developers. As a CTO, both points give me fulfillment.

If we could have done one thing differently?

Simple answer to a simple question. Going for an event driven and low maintenance microservice approach also means a lot of services down the line. Making sure that your service boilerplate generator is solid early on makes rolling out structural and security updates easier. Not fun. Just easier.

About VAI:

VAI Trade is a digital purchasing financer for small and medium-sized companies. The Berlin-based fintech company offers an alternative to classic banks and is thus a growth motor for medium sized companies – the backbone of the German economy. VAI uses specially developed algorithms and modern technology to provide small and medium-sized companies with uncomplicated, bank independent, transparent financing solutions within 24 hours. The platform for digital goods purchase financing is backed by the Berliner Volksbank.