FinXTech Report digital - Flipbook - Page 3
“Everything can be done with APIs and connected that way.
en, not mandate driven,” says Lee Wetherington, senior direc-
It opens up our ability to really be creative,” she explains.
tor of corporate strategy at Jack Henry. Banno’s open-API
This puts Mascoma in the driver’s seat to build or imple-
digital banking platform, which Jack Henry acquired in 2014,
ment new products and services based on what their cus-
set the foundation for its open banking journey. Jack Henry
tomers want.
has since rewritten the core’s middleware layer — APIs that
The technology will also give Mascoma Bank control over
connect applications to the core system — for the cloud.
a precious resource: its data, which is currently scattered
Banks want to partner with the technologies they choose
over dozens of disparate systems. “Building this new system,
to create differentiated experiences for their customers,
we can pull everything together from every system that our
Wetherington adds. With that in mind, “We’re trying to
customers’ data touches into one place,” Pause says. “And
become the best open banking platform there is, period.
we can understand it; we can analyze it; we can push it out
And the only way to get there first is to remove friction
to the frontline.”
from fintechs and other third parties that want to join our
The leadership team at West Reading, Pennsylvania-based
Customers Bancorp, with $20 billion in assets, has been asking similar questions about the role their organization will
play in the financial services evolution. Chief Administrative
Officer Jennifer Frost notes the important shift that took
ecosystem. That means getting rid of cost and getting rid of
complexity, and making integration as easy and seamless as
possible through beautifully documented, open APIs.” As of
March, 850 fintechs and third parties used APIs to integrate
with Jack Henry.
place during the pandemic, with the rush to engage cus-
APIs represent the next phase in the digital transformation
tomers digitally. Now, Customers Bancorp is seeking to
journey for many banks. But most spent the past 18 months
further that transformation in the back office. Carla Leibold,
focused on digital account opening and digital lending capa-
the bank’s CFO, has spearheaded efforts to automate the
bilities, according to the FinXTech poll. Looking at 2022,
accounting and finance functions, and there’s a huge focus
42% indicate that they plan to further their digital journey
on data, with the bank bringing Chief Data Officer Karen
via these tools.
Stine on staff last year.
Snowflake, which is used by financial providers including
For fiscal year 2021, 78% of bank
executives and directors said their
technology budget increased, by a
median 10%.
Capital One Financial Corp., Citigroup and Block (formerly
Source: Bank Director’s 2021 Technology Survey
“We’ve got a lot of data initiatives going on in our company right now, data science and general data governance,”
says Frost. The bank is moving to a new data warehouse,
Square), along with a host of other larger, non-financial
companies. Most data warehouses rely on batch processing
— taking large amounts of data and processing it at once,
St. Louis-based Midwest BankCentre had a leg up on
often overnight. That doesn’t provide real-time insights, Frost
account opening compared to many similarly-sized banks
explains. Snowflake’s APIs, however, will enable Customers
— it already offered the service through its Rising Bank
Bancorp to “access data [in] real time, so it’s up to the
subsidiary, a digital-only platform launched in 2019 through
minute, and we can have real-time insights and suggestions
a partnership with MANTL. In 2023, $2.4 billion Midwest
coming out of our data warehouse.”
BankCentre plans to expand digital account opening to its
Legacy core provider Jack Henry & Associates is among the
technology companies responding to these trends. “We saw
open banking emerging in the United States — market driv-
business clients, according to Erin Erhart, executive vice
president of bank operations. This will reduce its commercial
teams’ reliance on retail branches for business.
BANKERS REVEAL THE NEXT PHASE OF DIGITAL TRANSFORMATION | 2