Banking & Fintech: Better Together

Kylee Wooten

Media Relations and Research Associate at Sageworks

Views 1137

Banking & Fintech: Better Together

14.03.2018 06:45 am

While Fintech companies were initially viewed as a banking competitor, the two are finding that there is greater benefit to working together. According to the 2017 World Retail Banking Report, 91 percent of banks and 75 percent of Fintechs responded that they expect to partner with one another in the future. APIs (application programming interface) are a key enabler in this evolution. Once a term reserved for technical experts, APIs are becoming part of our everyday language as they continue to evolve with more capabilities and opportunities for Fintech companies and financial institutions to work together and better serve their customers.

THE ROLE OF AN API

APIs act as a glue connecting multiple systems to make one efficient platform. Think of Lyft, which uses APIs to synchronize together maps, payments and texting in one seamless application. As we covered in our blog, What is an API and how can it help financial institutions? APIs are highly useful for financial institutions internally. But APIs are just as important, if not more important, from an external standpoint. Most institutions are committed to being customer-focused and want to create a superior customer experience. APIs help generate frictionless, simple experiences for their customers. One of the key ways that APIs and Fintech partnerships are disrupting and changing the traditional banking environment is with open banking.

OPEN BANKING

Open banking allows for banks to share data with third-party companies or applications securely, and in real time, through the use of APIs. Banks were once like gatekeepers of customer financial data, facilitating most exchanges of money. The rapid rise of Fintech companies worried the banking industry, but financial institutions are now beginning to embrace Fintech for faster innovation, accurate decisioning and increased quality. From the customer perspective, open banking gives customers the ability to easily share their own data with third parties, compare, analyze and manage their accounts more effectively and ultimately make more sound financial decisions. Most bankers see personal loans as the most at-risk in moving to a Fintech company, but with the use of open banking, borrower experience can be greatly enhanced and expedited. Traditional banking is not typically known for its speed, but with the emergence of open banking and APIs, financial institutions can create a more cost-effective solution while vastly increasing the speed to market. As these financial institutions continue to embrace APIs and open banking, they’ll be more equipped to partner with Fintech companies. The “language” of open banking technology optimizes third-party integration, creating greater accessibility to various partners and features. From comparing banking options, to new product offerings, open banking enhances the services that financial institutions can provide to their customers.

The financial space has changed significantly in the past few decades with the emergence of new technologies and increased competition in the marketplace. Based on a survey by PwC, 63 percent of bankers see the rise of Fintech as an opportunity to expand products and services. Expect financial institutions to start embracing the changes in order to keep their customers satisfied and provide enticing capabilities.

Interested in how APIs could benefit your financial institution? See Sageworks’ API Network for more information. You can also visit our full Banking Platform to see other integrated solutions.

Latest blogs

Paul Sweetingham DXC Technology

Eight Must-haves When Choosing a Cards and Payments Services Provide

There are so many factors to consider when a business starts looking for a cards and payment services provider.  The new kids on the block, fintechs and start-ups, are challenging the norm, bringing technological customer expectations with them – Read more »

Mark Hinds Polymatica

Increasing Data Return on Investment: Why It’s Time to Make the Data Vault More Accessible

As in almost every industry, those in the financial services sector hold swathes of data about every aspect of their organisation. In an ideal world, all departments within a  business should have easy access to this data to help guide intelligent Read more »

Kulpreet Singh UiPath

Accelerating Finance and Accounting Transformation with RPA

Robotic Process Automation has the power to streamline processes, empower staff and increase customer satisfaction says Kulpreet Singh, Managing Director - EMEA, UiPath Data is all around us and finance and accounting departments are well versed in Read more »

Lu Zurawski ACI Worldwide

Lu Zurawski comments on ATM hackers steal $10m across 28 countries in audacious bank heist

ATMs rely on operating systems just like domestic computers, so it is common for ATMs to use versions of Windows or Linux. And just like with home PCs, owners need to keep their systems up to date with the latest releases of security software Read more »

Eran Noam Shield FC

Capturing Communications isn’t Compliance

It is six months since the Markets in Financial Instruments Directive (Mifid II) came in to force and two months since the General Data Protection Regulation (GDPR), which means you are probably feeling the effect of regulation exhaustion. It is Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App