If you thought ‘fintech’ was a buzzword, get ready for ‘open’. Open data, open APIs, open access – you name it. Banks are under pressure on multiple fronts to open the doors and let in the tech punters, all of whom are hungry for a slice of customer data. Open APIs seem inevitable at this point, with governments around the world starting to push the case for banks to get comfortable with handing over customer data when requested to third parties, a move that is enabling the API movement to take off.
The big question is, once this last moat is crossed for banks, what then? For those that can’t do anything smart with the data they have already, it seems certain they will be relegated to becoming a compliance shell. Sure banks are data rich now, but as product unbundling accelerates, data will become spread a lot more thinly. Soon there’ll be nothing significant left to really mine.
This week I’m in New Zealand for the Payments NZ conference, The Point. Open and API are certainly two big buzzwords amongst the speakers and the delegates. But, unlike other regions of the world, it’s a case of talk and action. I met fintech developers in the room who are already using public and private APIs from ASB Bank. ASB are one of New Zealand’s largest banks, with approximately 1.3 million customers. ASB is the local NZ arm of Australian banking giant CBA, who in addition have opened up their API platform on its Albert Point of Sale (POS) device.
For small business, Albert combines a POS and EFTPOS terminal into one touchscreen tablet. Aesthetically pleasing, it’s right at home in a swanky café or restaurant and offers clever visual representations of bill splitting for customers, among other apps.
Staying in Australia for a moment, and you’d be worth to keep your eye on Cashper Labs, based out of the Tyro Fintech Hub. Cashper are on an audacious mission to create an API layer over the existing local banking system, to enable all the products fintechs want to build but can’t without core access. Cashper will target a range of banks at the backend and fintech startups and tech companies at the front end. The approach was born out of the frustration the Cashper team had when they initially tried to establish a Venmo like p2p payment service in Australia. When they pull off this pivot, which I am in no doubt they will, Cashper will occupy a very attractive API aggregation spot in the fintech/banking ecosystem.
It certainly feels like the calm before the API storm right now. Head over to the US and you’ll find a bank in Kansas also jumping headfirst into the API market. CBW Bank claims it is the first U.S. bank to publish its APIs, which it does through its partnership with Yantra Financial Technolgies, a company owned and founded by the CBW’s Chairman and CTO, Suresh Ramamurthi. CBW works with the likes of Moven and this year launched Ylabs, allowing development on a full bank stack with arguably the best plumbing in the US market.
As a consumer, I’m certainly looking forward to a future where I can identify myself once then freely pick and mix my banking services from a range of providers. Of course it will be essential then for these independent providers to share data with each other, or a central hub, so macro analysis can be performed on my financial well-being. It seems to me that we’ll unbundle only to re-bundle, just a little differently to how we did it before. Like changing fashions, what’s old eventually becomes new again – perhaps banking is no exception.