First published on The Economist Impact.
The Economist Impact survey on global finance highlights the intensifying competition facing banks, but it also reveals how this competition is leading to unprecedented digital collaboration.
Banks once relied on proprietary systems and data to grow their customers and revenue share. Today, they are accelerating their growth by partnering with fintechs to add new services, embedding banking-as-a-service solutions in online retail offerings, and tapping the insights of agencies with big data expertise.
APIs now serve as the keys to unlocking these digital collaborations. But, just as banks have updated their business strategies, they need to modernize their APIs and services.
It is not enough to put an API in front of a legacy stovepipe application. Consistent consumer experiences require new banking applications with “omni-access” to a digital core where data is clean and readily available with no duplication. This is 80% of the battle. After that, it is easy to add management, security, and version control via APIs.
Standards for open banking and technology facilitate modernization by providing a lingua franca for APIs and applications. By adhering to these standards, banks can foster digital collaborations that exponentially grow their sales, customers, and channels in ways they could never do on their own.
To find out more about the report, Threat Assessment 2022, click here.