Building Fault-Tolerant Systems with Elixir: Lessons from the Fintech World

When I first started working at Coverflex, a fintech startup, I was excited about the prospect of solving real-world problems in a fast-paced, highly dynamic environment.

But as any engineer in this space knows, fintech comes with its own unique set of challenges: ensuring uptime, handling high volumes of transactions, and maintaining security and reliability under pressure.

Enter Elixir, the language that transformed the way I approach software development.

In this post, I’ll share how Elixir’s features, particularly its fault-tolerance and concurrency model, helped us build resilient systems—and the lessons I learned along the way.

The Fintech Challenge: Why Fault Tolerance Matters

In fintech, failure isn’t just an inconvenience; it can lead to lost money, regulatory issues, and damaged customer trust.

And in the fragile early-stage start up environment that Coverflex was when I first joined the team, failures like this can have catastrophic consequences.

Systems must handle:

• High availability: Transactions need to process without interruption.
  
• Concurrency: Thousands of users may perform actions simultaneously.
  
• Error recovery: Even when something goes wrong, the system should recover gracefully without user intervention.

At Coverflex, we used Elixir and its ecosystem to address these challenges head-on.

How Elixir’s Features Deliver Fault Tolerance

Elixir is built on the Erlang VM (BEAM), designed for building distributed, fault-tolerant systems.

Here’s how it helped us meet fintech demands:

1. OTP and Supervisors

Elixir’s Open Telecom Platform (OTP) includes tools like Supervisors that allow applications to recover from failures automatically.

A Supervisor is a process that monitors other processes, restarting them if they crash.

Use case:
In our banking infrastructure system, we used Supervisors to monitor key processes like:

• User authentication
• Payment gateway integrations
• Data synchronisation with external APIs

Whenever one of these processes failed (e.g., a payment API timed out), the Supervisor restarted it without affecting the rest of the system.

See the Supervisor docs for practical walk-through of setting up Supervisors in Elixir.

Example code:

defmodule PaymentSupervisor do
  use Supervisor

  def start_link(_) do
    Supervisor.start_link(__MODULE__, :ok, name: __MODULE__)
  end

  @impl true
  def init(:ok) do
    children = [
      {Task, fn -> PaymentProcessor.start() end}
    ]

    Supervisor.init(children, strategy: :one_for_one)
  end
end

2. Concurrency with Lightweight Processes

Elixir processes are lightweight and isolated, allowing us to handle thousands of simultaneous tasks efficiently.

This was critical for managing high transaction volumes.

Real-World Use Case:
When users performed transactions simultaneously, each transaction ran in its own process.

This ensured that a failure in one transaction wouldn’t affect others.

This was easily implemented using Elixir’s Task.async:

Task.async(fn -> process_transaction(transaction_id) end

3. Pattern Matching for Error Handling

This is one of my personal favourite aspects of developing with Elixir.

Elixir’s pattern matching makes it easy to handle errors gracefully.

Instead of crashing, the system could provide meaningful feedback to users or retry failed operations.

Example:
We always used pattern matching to handle different types of API errors from a third-party payment gateway:

def process_response({:ok, response}), do: handle_success(response)

def process_response({:error, :timeout}), do: retry_request()

def process_response({:error, reason}), do: log_error(reason)

What a beautiful clear and concise, easy-to-read and easy-to-maintain codebase!


Lessons Learned

• Embrace Resilience as a Philosophy: Elixir makes it easy to build fault-tolerant systems, but resilience starts with mindset. Expect things to fail, and plan for recovery.
  
• Use Supervisors Generously: They’re not just for critical systems. Using them liberally ensures a more robust application.
  
• Measure and Monitor: Tools like Telemetry and Logger helped us monitor our processes, providing insights into performance and potential bottlenecks.

Takeaways for Other Developers

If you’re in an industry where reliability is non-negotiable, Elixir is worth exploring. Its functional programming paradigm, concurrency model, and fault-tolerant architecture make it a strong candidate for high-stakes applications.

For developers new to Elixir, I recommend starting with:

• The official documentation: elixir-lang.org
• A book: Designing Elixir Systems with OTP by James Edward Gray, II and Bruce A. Tate (There is a lot of other great options to chose from)
• Building a side project: Try creating a simple chat app or task manager to explore Supervisors and concurrency.

Final Thoughts

Working with Elixir at Coverflex taught me the importance of building systems that are not only functional but also resilient.

The language’s tools and philosophy pushed me to think differently about software development.

I’m excited to see how Elixir continues to shape industries beyond fintech—perhaps even in creative fields like music production, which I’m exploring in my personal projects.

What challenges have you faced with building fault-tolerant systems?

I’d love to hear your thoughts and experiences—drop a comment below or reach out on GitHub or X.