Common Mistakes to Avoid

Ensuring a seamless Midaz implementation requires careful planning and adherence to best practices. By sidestepping these common mistakes, you can maintain a resilient, efficient, and secure financial system.

Poor Ledger Structuring

• Mistake: Overcomplicating or oversimplifying ledger structures. For example, assigning a separate ledger to every customer creates unnecessary fragmentation, while forcing unrelated processes into a single ledger complicates management.
• Best Practice: Organize ledgers by major business lines or entities, keeping customer accounts within a minimal number of ledgers. This optimizes internal transfers and simplifies reporting.

Not Using Portfolios for Clients

• Mistake: Treating each account in isolation instead of grouping them under a portfolio. This makes it difficult to track all accounts linked to a single customer.
• Best Practice: Establish a portfolio for each customer, grouping their accounts for streamlined queries, relationship management, and reporting.

Mixing Assets in One Account

• Mistake: Managing multiple currencies or asset types within a single account, often through metadata overrides. This leads to unclear balances and reporting inconsistencies.
• Best Practice: Assign one asset per account. If a customer requires multi-currency support, create separate accounts and use naming conventions or portfolios to structure them efficiently.

Inadequate Chart-of-Accounts Planning

• Mistake: Lacking a well-defined chart of accounts, leading to inconsistent transaction categorization and audit challenges.
• Best Practice: Design a structured chart of accounts aligned with financial reporting needs. Train developers to categorize transactions correctly and conduct periodic reviews to ensure accuracy.

Overlooking External Account Handling

• Mistake: Mishandling external transactions, such as deleting an account when funds leave the bank, causing imbalances.
• Best Practice: Use @external accounts for all money flows into and out of Midaz. This maintains ledger balance and ensures transactions align with real-world bank statements.

Security Lapses in Access Control

• Mistake: Granting excessive privileges to administrators or using shared accounts, compromising security and accountability.
• Best Practice: Implement role-based access control (RBAC) from the start. Avoid using root/admin accounts for daily operations, and enforce strict credential management practices. Regularly audit permissions to prevent unauthorized privilege escalation.

Improper Error Handling in Transactions

• Mistake: Failing to handle failed transactions in the integration layer, leading to false assumptions about successful operations.
• Best Practice: Always validate transaction API responses. Implement retry mechanisms with backoff for transient errors and log permanent failures. Ensure upstream systems, such as core banking applications, gracefully handle rejected transactions and provide appropriate user notifications.

Ensuring a Robust Midaz Implementation

By proactively addressing these pitfalls, Midaz can serve as a trusted financial backbone, allowing teams to focus on innovation rather than troubleshooting avoidable issues. A well-structured, secure, and compliant implementation paves the way for seamless banking operations and long-term success.