Thursday, 06 December 2018

Earlier this year, Deloitte published its 2018 Banking Industry Outlook, which identified some of the biggest headaches facing banks in a rapidly changing financial landscape. It found that banks “must contend with multiple challenges tied to regulations, legacy systems, disruptive models and technologies, new competitors, and a restive customer base while pursuing new strategies for sustainable growth”.

If this sounds like a familiar scenario, it is. An Accenture report The Future of Fintech and Banking published in early 2015 described how banks were grappling with legacy technology, new regulations, more competitors and more demanding customers back then and concluded that banks needed to “disrupt their own business model rather than watch challenger models disintermediate them”.

It’s tempting to conclude that, when it comes to responding to these profound changes in the financial services industry, the pace of change and adaptation at banks has been glacially slow.

So how exactly have banks changed in the intervening years? One key development is that banks used to see fintech companies that offered retail banking and payment services to customers as “challenger models” that posed a direct threat to their business and very existence. These legacy banks often concluded that acquiring new fintech companies was the best way to extinguish the threat they posed and to capitalize from digital disruption.

Today, more banks see customer-facing fintech companies as potential partners, not competitors, and the API revolution is one of the key drivers of that change.

Today, more banks see customer-facing fintech companies as potential partners, not competitors, and the API revolution is one of the key drivers of that change. A joint report from Cap Gemini and MuleSoft published this August mentions that more than three-quarters of banks now say they are counting on APIs to help them improve the customer experience.

But the Cap Gemini and Mulesoft report also concludes that although “APIs will play a leading role in driving the future of banking”, open banking APIs are still in their infancy. The US landscape, in particular, consists primarily of closed environments that offer a limited range of products and services for a bank’s existing customers.

If more banks were prepared to look beyond their existing customers and make open banking APIs available to partners, they could offer those partners a way to provide secure, regulated, best-in-class, financial services to their customer base. If more banks became advanced Banking as a Service platforms, they could become an indispensable offering for the ever-expanding ecosystem of fintech companies that are powering the next wave of financial innovation.

If more banks became advanced Banking as a Service platforms, they could become an indispensable offering for the ever-expanding ecosystem of fintech companies that are powering the next wave of financial innovation.

BBVA is proud to be leading that charge – and to be bringing great financial technology ideas to life. The bank has offered a full suite of APIs in Europe since 2017, and now that BBVA Open Platform has moved out of beta, BBVA is thrilled to be one of the first global financial institutions to offer a full suite of Banking as a Service products in the US.

Using Open Platform’s suite of white label APIs, fintech companies can find a full stack of banking and payments solutions all in one place. They can verify their customers’ identities, issue and manage debit cards and deposit accounts. They can allow customers to make a wide range of payments using one easy-to-implement endpoint, including instant payments to debit cards. And they can do this all under their own brand.

However, we are not stopping there. We’re constantly improving and adding new functionality to our APIs in response to feedback from our partners. Companies like online bank Simple, SaaS accounting firm Xero, payments company Modo and savings company Digit are already using our integrated platform and more of our beta clients will be going live soon.

We can’t wait to give more companies simple and easy access to financial services so that they can create outstanding customer experiences across an even broader range of sectors – and in ways that have never been imagined before.

We’re proud to be pioneers of this new, exciting open economy and hope that other banks will join us. Just know that whatever else happens in the banking sector, we certainly won’t be resting on our laurels. We embrace disruption, thrive on innovation and we’re just getting started.

We embrace disruption, thrive on innovation and we’re just getting started.

If you would like to find out more about how BBVA Open Platform’s suite of payment and banking APIs can bring your business ideas to life, we’d love to hear from you. We’re excited to carry on our tradition of helping companies turn their innovations into reality and we’re happy to answer any questions you have.

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