Finovate Blog

We’ll be mid-way through FinovateSpring in less than a week, and many of the trends predicted at the beginning of the year are out in force.

On May 8 and 9, dozens of companies will take the stage to demo their newest technologies. And on May 10 and 11, the conversation continues. We’ll host experts on stage as they decode and decipher tomorrow’s trends and help you not only figure out what they mean for your organization but also offer up implementation ideas. Register today to save your seat!

So what’s at the top of the trends list for this year’s event?

APIs

Europe isn’t the only country with its eye on open banking. Because of the efficiencies they stand to gain, banks across the globe are considering how they can get ahead by creating a more open ecosystem. Additionally, many banks are finding value in buying and integrating white-label technology over building new technology in-house, which is creating a larger market for open APIs and SDKs across fintech.

AI and machine learning

While they’re not the same, these two enabling technologies go hand-in-hand. And it’s no wonder they came out on the top of the trends list at FinovateSpring– AI and machine learning have empowered banks to create technologies that help with everything from automating investing, enhancing marketing efforts, and improving customer service.

Lending

This is always a space worth paying attention to, because there is a lot of money to be made for both banks and fintechs if they do it right, and there’s a lot of money to be lost if they do it wrong. Additionally, with the increasing prevalence of enabling technologies such as the blockchain, AI, and cognitive computing, lenders are discovering improved underwriting, loan issuance, and debt recovery options.

What are you hoping to discover at FinovateSpring next week? Check out our agenda to learn more of what’s in store. Have questions? Visit our contact page to get in touch and we’ll help you out.

The future [of banking] depends on the customer’s needs, says Alex Jimenez, Vice President Senior Strategist at Zions Bancorporation. Jimenez gives us a snapshot of his views on where the US banking industry is heading ahead of his session at FinovateSpring 2018 about “The platformification of banking, providing customers more choices“.

A couple of years ago, Ron Shevlin predicted that banking would move to become banking platforms “much like how Amazon is a platform in retail.” Usually, it takes a few years for banking executives to latch on to Ron’s ideas.  It’s no surprise then that the idea peppers many strategy documents throughout the US banking industry today.

There are some early signs that the US banking industry is moving towards this future state. While we can point to open banking and PSD2 in Europe, there are significant differences in the regulatory environment between markets that makes such a jump merely speculative. Instead, I point to two separate trends: banks publicly publishing their APIs, and early examples of banking platforms.

Publicly publishing APIs isn’t a new practice, but it is in banking. Without getting into the possible impact of the recent Facebook API controversy, some of the more forward-looking banks in the US have public pages where developers can access their APIs. This practice doesn’t constitute open banking, but a permissioned extension to the banks’ model. A developer applies for inclusion, downloads the API standards, builds experiences around the APIs, tests it in a sandbox, applies for certification, and then deploys with the bank. Some of the US banks that have published their APIs are doing it because they are international, like Citi, Bank of America, Wells Fargo, and Chase. However, there are others that have some international business but are focusing on building a US platform, like CapitalOne and Silicon Valley Bank.

Beyond the banks, companies that form the technology backbone of many community banks and credit unions have also begun to publish their APIs. FIS offers CodeConnect “a centralized fintech hub that gives developers access to the FIS product catalog in one central marketplace.” Similarly, Fiserv offers their DNAappstore “a collaborative community and online marketplace for trying, buying and selling custom DNAapps that enhance and extend the robust functionality of” their DNA® account processing platform.

Further, APIs are a topic of discussion for most bank CIOs, and increasingly throughout the executive suite.

Early adopter US banks and fintech firms have begun to build out partnerships that extend their initial capabilities.  For example, Radius Bank have extended their usual community banking offerings, as they pivot to be a true digital bank, to include services such as Aspiration’s “pay as you wish” checking accounts, Mantl’s account opening, and Prosper’s online personal loans.  Recently, PayPal announced an extension into traditional banking services through partnerships with “a Delaware bank handles debit cards, a bank in Georgia deposits checks that users take pictures of, and banks in Utah offer loans to customers and small businesses.” Other smaller fintech firms, like MoneyLion, have also announced entry into traditional banking products through similar partnerships with banks.

We will see banking-as-a-platform as a regular banking model alongside the laggards in the industry with a traditional model. Ultimately, where the future lies will depend on what resonates with banking customers.