Thursday, 11 July 2019

Bankers and fintech experts from across the US, Canada and beyond took over the burgeoning tech hub of Austin, Texas, in late June for American Banker’s Digital Banking Conference. Aside from learning about Austin’s unique brand of cool that feeds its motto “Keep Austin Weird,” we also exchanged ideas and experiences with other banks and fintech leaders who have made innovation a priority. 

Below we share a few highlights from the conference (bat sightings excluded):

1. Open Banking versus Banking-as-a-Service

There still seems to be little consensus about what open banking and Banking-as-a- Service mean. That’s likely for two primary reasons. First, a broad constellation of players have emerged that enable API-driven activities at banks. Those include technology platforms that allow banks to build their own API capabilities, banks offering access to data to third parties via APIs, and companies leveraging that data access to provide bundled services to businesses and individuals. 

Each of these players serves a different function in the bank-API value chain and describes the value of what they’re offering slightly differently, all under the open banking umbrella. Second, each financial institution is creating an API strategy that plays to its unique advantages, meaning rollouts of API-driven programs look slightly different from bank to bank. We talk more about our view on open banking versus Banking-as-a- Service here.

2. Consumer Experience is Still King 

A common thread in almost all sessions was that banking needs to work better for individuals. Much of the conversation focused on customer experience, whether that be providing greater security for customers and their data, or combining disparate services and data with good product design to give customers a banking experience that helps them make good financial decisions and achieve their goals.

3. Partnerships are Key to Success

Banks are getting much more comfortable with the idea that they don’t need to own the entire customer experience and are exploring new ways to serve customers. As Abhishek Gupta, Head of BBVA Open Platform, said, “We won’t manufacture all products and services going forward, so we want to enable the broader ecosystem to offer those products to customers.” 

This operating model involves partnerships, which don’t always come easily to banks. As Daniel Latimore said on a panel titled Open Banking Partnerships: A look at innovation and Fintech + Bank Partnership, “Partnering is a skill, and for most incumbent banks this is a muscle they haven’t exercised.” The panel, which included speakers from Live Oak Bank, Apiture and BBVA Open Platform, discussed the fact that good partnerships often come down to mutual empathy, understanding what your partner needs, and how you can provide it. 

Gupta drove that point home saying, “Our clients know the end customer challenge they’re solving for. What they need from a bank partner is someone to guide them through the risk and compliance processes and procedures…The technology part is the easy part. We want to make sure that the operational process behind it is a standardized, templated process.”

Overall, discussions at the conference showed that banks large and small are actively considering or delivering a more open business model, whether that means opening up access to customer data or to the bank’s core. However, it also revealed that a significant opportunity still exists in the US for banks to radically rethink how they offer greater value to businesses and individuals. Open Platform is proud to be leading this charge. Get in touch to learn how embedded banking services can transform your business.

-The Open Platform Team

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