The idea of banks using a platform like the Apple App Store to plug in different fintech services as part of their own product suite to customers is where some believe the banking industry is headed.
Of course, others say the hand-wringing involved in getting banks to share data with fintech through application programming interfaces makes such dreams of open banking an unlikely reality anytime soon.
Several startups have emerged to try to tackle this concept over the last few years, but several established players in the past year or so have also launched such platforms, and how successful they are could portend the industry’s appetite for such a model that promises to offer an avenue to deliver products and services quickly and cheaply to consumers.
“Banks that are successful in the future will become platforms,” said Suresh Ramamurthi, chairman and chief technology officer of CBW Bank in Weir, Kan. “But it’s not just about plugging in new technology; it’s transforming your entire culture and processes.”
Last June, CBW published its application programming interfaces to offer a banking-as-a-platform service model. To accomplish this, CBW Bank developed and deployed more than 500 APIs, to provide opportunities for banks, application developers and software engineers to collaborate and deliver products and services. By deploying these APIs, the bank hopes provides connection points into its digital banking platform, giving users access to multiple payment networks and channels and ensuring interoperability between multiple financial institutions, programs, product combinations and accounts.
About 140 companies — mostly fintechs, but some banks — have signed on to become part of the platform, Ramamurthi said. While some banks Ramamurthi…