Not long after the dawn of the app age—when Apple opened up its very closed iOS garden to third parties in summer 2008*—we predicted 20,000 to 30,000 mobile banking apps would be available by 2025. My thinking was that banks would offer multiple apps for their various customer segments especially commercial, small business, mortgage, credit card, and so on.
While most banks still offer a single app for all customers—two if you count iOS and Android—it’s not because they don’t desire multiple apps. It’s because multiple, high-quality apps are still too expensive for all but the largest banks—American Express, for example, has eight in the U.S. store alone—to build and update apps for single segments. This should be a perfect opportunity for third parties to step in and provide white-label solutions. We’ve seen a bit of that, but it’s not yet taken hold for one very good reason: The integration with back-end systems to deliver timely account information is too costly.
The rest of the ecommerce world has developed a good workaround to integration headaches. It’s called an API (application programming interface). While not unheard of in banking, APIs are just beginning to take hold. Early leader Credit Agricole two years ago unveiled its API app store at FinovateEurope. And just last week, Silicon Valley Bank acqui-hired the Standard Treasury team to push forward on the banking API front (press release).
When banking APIs become SOP, we will see an explosion of niche apps for every demographic segment, product offering, industry segment and life stage. It’s going to make banking and money management more approachable, and valuable, for a wider range of customers. I have little doubt we’ll reach that 20,000+ app count. And with universal APIs, we could see two to three times that number.
We’ll be looking at these issues and more at our second annual financial services developers event, FinDEVr, on 6/7 October.
*Source: “Online Banking Report: The Case for Mobile Banking,” p. 6 (published March 2010)