As originally published on Forbes.
According to KPMG, fintech has established itself as one of the fastest-growing sectors over the past decade, with global funding reaching $111.8 billion in 2018, up 120% over the prior year. And, as the sector grows, people are naturally finding fintech startups touching everyday life in more ways than realized.
Like hidden figures inside a picture, many of today’s fintech companies are tucked away and out of plain of sight, yet material parts of the larger portrait of present-day financial services. These organizations are helping transform once complicated and time-consuming routines to improve customer experiences, creating unprecedented network effects.
Meet The Fintech Enabler
Initially, fintech startups were largely seen as competition for traditional financial institutions and threats to their market share. However, in practice today, fintech companies are also a core force driving innovation deep within the financial industry, not just as head-on competitors, but as collaborators that enable others.
As it happens, collaboration between fintech providers, traditional financial players and other fintech companies is now the norm, a key catalyst of the financial and payment industries’ changing landscapes. Rather than neatly grouped, distinctive camps working against one another, what has developed is a far richer and more nuanced fabric.
More Interesting Than Many Realize
This development means that individuals and organizations are interacting with a lot more fintech providers on a day-to-day basis than they are probably aware of, and would have far different experiences were it not for the fintech enabler hidden deep in the background of the bigger picture.
To illustrate, here’s a look at some of the invisible players that work to enable other services consumers have grown accustomed to:
Apps: Do you know what goes great with online shopping from the comfort of your home? Having your dinner delivered and errands handled. Do you see Postmates bringing a meal to your neighbor’s doorstep? And look — there’s the TaskRabbit you ordered to assemble your new shelves arriving by Lyft. What do they all have in common? You guessed it. A common fintech enabler. All of these companies use Stripe to fuel an on-demand economy that’s delivering convenience.
Challenger banks: In the UK, where open banking laws have been in effect for a more than a year, challenger banks have found a natural fit partnering with fintech companies to address market segments considered underserved by larger traditional players. One such example is Starling Bank. The mobile digital bank was launched in 2014 and granted a banking license by the Bank of England in July 2016. Since then, it has created an extensive financial services app by partnering with fintech providers for personal finance capabilities (Yolt), payments (Tribe), loyalty and rewards (Yoyo), and wealth management (Moneybox), to name a few.
It’s In The Details
The truth is that most of the companies that rely on fintech collaborations and integrations do it for the simple fact that it allows them to focus on their strategy, which in turn helps their ability to scale — in some cases exponentially.
But, what are they doing exactly? Are they helping to create new digital accounts, assisting compliance or supporting the massive number of payments on-demand companies need to make? Yes, yes and yes. Today’s fintech companies are changing all manner of banking as a service, from account origination to how institutions handle know-your-customer requirements, secure transactions and mass payouts.
Achieving a better understanding of the spaces and roles occupied by today’s fintech enablers requires pausing and taking a closer look. It’s like approaching a painting to appreciate the techniques an artist used to achieve a particular effect. Yes, I just used art as a metaphor for today’s financial services. I guess the world is indeed full of surprises.
As originally published in PYMNTS.
A decade is a nice, round number — a convenient marker for what has come and what is coming. We as humans tend to measure our lives in decades, referring to ourselves as children of the ’60s, perhaps, or pining wistfully for the synthesized pop sounds of the ’80s.
In payments, 10 years is a long time — where everything can change, and where once fanciful notions can become ubiquitous new ways of transacting. That said, we are now at the six-month mark of 2019, and a new decade looms. Call it the sunsetting of the 2010s, an opportune time to preview everything from eCommerce to artificial intelligence (AI), from A to Z — here, we can term it APIs to Zelle.
To get a sense of the most significant seismic shifts that have pushed payments innovation inexorably ahead through the past 10 years, as well as what lies over the horizon, PYMNTS queried 29 C-level executives with a collective thumb on the pulse of innovation. Each of these men and women were asked to name the single, most important innovation that has had a ripple effect through the ecosystem. The answers were varied, spanning from blockchain to instant payouts.
The particular innovations spotlighted were varied as well, tied to, say, consumer-specific or B2B-specific cases. However, common threads that ran through the tapestry lie with technology’s transformation, marked by speed, intelligence and mobility.
It can be argued that the consumer experience has been leading by example through the past few years, giving merchants and financial institutions a roadmap of what to do and what not to do when it comes to satisfying demand and creating as frictionless a commerce experience as possible.
The flip phones of earlier in the millennium are, largely, a memory. Now, smartphones can help one shop whenever and wherever, transacting by tapping. Machine learning and AI can help merchants tailor relevant offers, real time and in context.
Technology has also proven invaluable in the ongoing fight against fraudsters, who are increasingly moving online, as consumers are doing the same. One laggard has been catching up a bit: B2B, where the paper chase is becoming a bit more streamlined and digital as transactions move across borders, currencies and time zones. No matter the application, risk analysis is crucial, especially in an age when know your customer (KYC) is as much a mandate as it is good business sense.
If there is one constant in innovation, especially payments innovation, it is that it’s constantly evolving. We may look back on the relative clunkiness of what went before and chuckle, and say it was “obvious” that we’d wind up where we are now, given the road we’ve traveled. Past is prologue, as they say, even if it is not a specific predictor. Hindsight may be 20/20, but it’s crucial as we get ready for 2020. Read on.
The Decade of the App
By Anabel Perez, CEO and Co-founder, NovoPayment
Reflecting on the previous decade in the payments space, it’s astounding to see how much we’ve been able to accomplish and innovate in only ten years. As end-users, we have much more control over our data, and how we share it to simplify our day-to-day lives. As merchants and retailers, we can accept payments and pay our employees easier than ever. And as financial institutions, we’re able to streamline processes, remove bottlenecks and facilitate payments in ways our predecessors would have never imagined. And none of this would have been made possible this decade, if it was not for the rise of the smartphone and mobile apps.
There’s an App for That™
At the very top of this decade, Apple secured a trademark for their buzz-worthy phrase, “There’s an app for that,” (originally used in a commercial for their smartphone), and today, with 3.9 million apps available for download between Apple and Android’s app stores, the phrase has never rung more true.
The mobile app world has in fact become an entire ecosystem, supporting billions of smartphone users, millions of developers, and a laundry list of businesses (both big and small). And while this advent brings unprecedented information, entertainment and simplicity to each users’ fingertips, the infrastructure in place has also allowed us to take payments wherever issuers’, acquirers’ and merchants’ dreams (and phones) may bring them.
Some key examples of how the smartphone changed the way we think about payments:
Decade of the App? Meet the Decade of APIs.
While apps and the smartphone have certainly introduced society to new possibilities for payments, what has propelled the industry to new heights and vistas, and will continue to do so? APIs.
About half way through this last decade, we witnessed companies like Airbnb and Uber focusing on improving daily user experiences and services on the front-end, while relying on APIs to address the payments required to facilitate these experiences in the back-end. This collaboration was able to support these companies’ wide-scale growth and adoption without limiting the organizations to the traditional frictions associated with account creation, payment facilitation, accounts payable, etc. It’s a model that’s been able to be replicated and introduced possibility worldwide, for incumbent FIs, new kids on the block, and collaboration for all parties in between.
The power of APIs is the ability to provide greater business agility, facilitate innovation regardless of legacy software compatibility or tech silos, and offer deeper and more meaningful value than superficial innovation on the front-end. The middleware and orchestration that APIs offer today’s companies, allow for digital transformation for payments that will continue to improve user-experience in all types of value chains. And I’m excited to see what new directions the industry moves in.
As originally published in PYMNTS.
It’s not just technology that moves the world. Culture plays a huge role — as well as the sparks that often come from the tension when cultures clash. That promises to be the case going forward with Open Banking, as financial institutions (FIs) pick partners and proof of concepts.
Open Banking is a global effort that resets the relationships FIs have with FinTech firms, payment providers and financial service providers. To better understand the evolving landscape, PYMNTS caught up with Anabel Pérez, CEO and president of NovoPayment.
“For us,” Pérez told Karen Webster, “Open Banking means collaboration between different parties.”
Like any global, ongoing change (especially one that involves major economic players, and promises to alter the daily financial lives of consumers), Open Banking can still cause confusion and anxiety.
Open Banking Promise
The promise of Open Banking seems clear enough. Individual consumers will have greater control over how and where their financial and banking data is used, by whom and when. New technology — and partnerships based on that technology and data — will spark innovation in financial and payment services.
Open Banking, which launched in the U.K., depends on open application programming interfaces (APIs), which allow trusted third-party developers to build services for FIs. The APIs are used to share bank data among various financial industry players, and should, ultimately, spur competition and new product development that benefits the end user.
That’s where the culture clash can come in. Traditional FIs — the long-standing custodians of their customers’ funds — are to work with startups and other companies to develop these new products, and otherwise satisfy the desires of consumers who have grown accustomed to using mobile and online technologies to access, move and manage their money.
Banks need to play their part in “building new value” for consumers and FI clients, Pérez told Webster during the PYMNTS discussion. That means collaboration — lots and lots of collaboration. A collaborative relationship under Open Banking, she said, might include, say, a retailer, a bank and an insurance company, all of them providing a kind of cross-discipline value to consumers that will make for more efficient commerce, payments, disbursements or other transactions.
Role Of APIs
The facilitator of that new value, she noted (the matchmaker, perhaps), is the API. Under Open Banking, the APIs help with the job of essentially aggregating and creating new services.
However, with traditional FIs being traditional FIs (long-standing businesses that have very specific jobs, and have worked over years to win customer trust and loyalty), there is a legitimate concern on their part about so much data sharing — and, potentially, about consumers. Not only that, she said, “but some banks don’t seem to clearly understand what they are trying to do.” To drive home that point, she compared some banks to an ostrich with its head in the sand, avoiding action.
Resistance to Open Banking, at least in her view, is coming from a variety of places, including the U.S. “The decision process could be faster,” she said, underscoring how Open Banking is also about making choices — such as what innovations to pursue, what partners to seek out and accommodate, and what technologies to focus on.
Despite the Open Banking anniversary, and the progress made so far in Europe, “decision-makers in many banks are really uninformed about it,” Pérez said. “Banks forgot the agenda of going global, and are now having to rethink that agenda because they can create” innovative, consistent products and services across markets via APIs.
Ahead Of The Curve
Not all players in financial services and payments are so reluctant about Open Banking, though, she said. The big, global payment card networks seem to be keeping up.
Indeed, earlier this week (June 4), Mastercard launched its latest initiative centered around the changes, a program called Open Banking Solutions. The new Mastercard offering is designed to support Open Banking efforts in four areas: connectivity, security and compliance, dispute resolution and consulting services. The service is, for now, focused on the U.K. and Poland (underscoring how Europe and its regulators led the push for Open Banking, and the associated PSD2 regulatory regime).
In addition, according to Pérez, Latin American banks seem to be relatively ahead of the game when it comes to Open Banking. “Maybe that’s because of the influence of Spanish banks there,” she told Webster.
Yet, what Pérez doesn’t see yet when it comes to Open Banking — at least, in general — is “clarification of the concept” among stakeholders, which can influence how regulators treat this emerging space of payments and financial services innovation. That clarification will have to come, in large part, via consumer buy-in to the concept, which depends on innovation products and services, and making that happen will require the sharing of relevant data.
For all this to occur, banks must assess this new world — the new relationships, and the new culture of innovation under Open Banking — and, basically, loosen up. That seems a big part of it, at least in hearing Pérez talk about the Open Banking landscape. After all, the promise is not only new products and services, but the ability for consumers to “immediately connect” with all their financial and payment services, with much less friction than is the case now.
As originally published on PYMNTS.
A customer looking to open a new bank account is often in for a somewhat bumpy process. There are a lot of redundant forms and, in some cases, a few venue changes. For example, the process might start online, but then the customer is forced to visit a physical branch to verify their identity. It’s an omnichannel experience of sorts, and not the good kind – more of a funhouse mirror version, where the customer is forced between channels, instead of flowing between them by choice.
Onboarding on the whole, as most consumers experience it, is a cumbersome process that turns consumers off, NovoPayment CEO Anabel Perez told PYMNTS in a recent conversation – but it doesn’t necessarily have to be that way.
“Customer acquisition is a great example of a case where any FI can overcome the relevant challenges,” she said.
The key, Perez noted, is tapping into the expanding world of API offerings and building new secure connections and value chains. Processes that today are friction-filled and full of uneven handoffs between digital and physical channels, she noted, can be streamlined, digitized and smoothed into something that stops taking away from the customer experience and starts actively adding to it.
“An API can connect different processes to streamline the delivery of services and improve and elevate the customer experience,” Perez noted. And from that starting point, she added, FIs can start really leveraging their API building blocks to continually enhance that customer experience across their banking relationships.
Onboarding as a Competitive Advantage
An API-based onboarding eliminates a bad experience for both the customer and the FI. Previously, the consumer was more likely to be trapped in something tedious and rigid, while the bank was stuck with a high-cost process that earned them more irritation from their customers than anything else. The API-based streamlined process essentially puts channel control back in the consumers’ hands, while offering up more automated options. Instead of a physical appearance at the branch, for example, an API can capture and verify information like phone data or scan a “selfie shot” as a method of authenticating consumers – no physical appearance is required, but their identity is still securely confirmed.
“That gives the bank an increased ability to retain that customer,” Perez told PYMNTS, noting that smooth, streamlined processes tend to be sticky for customers. Moreover, she noted, that better experience is actually more secure, because in building an online onboarding experience, the FI is forced to create an automated and fully documented AML/KYC process.
“Because there is no way to get outside the process, there is no way to skip or miss a step,” she pointed out. “In using APIs to automate the process of creating a new customer, all the norms and procedures can be executed in regard to ‘know your customer’ and in the prevention of money laundering. It also creates the records in real time that those processes were managed.”
Moreover, Perez noted, apart from being safer and more secure, API-enhanced onboarding also serves as a starting point for deeper and greater engagement with customers once that new account has been created.
“This is also a place to gather important information that may help you to immediately and contextually offer additional products to cross-sell,” she said. “That helps our client banks engage their customers and significantly reduce their cost of sale.”
Embracing APIs for onboarding or otherwise isn’t always an easy decision from an organizational perspective, Perez noted. It requires a deliberate, organized effort on the part of the bank to provide the conditions for success – and that effort has to come from the top of the organization, and be pushed hard and consistently by “internal champions.”
As Perez pointed out, most FIs are not of sufficient size and scale to do this all on their own, so will need to forge partnerships with trusted, third-party technology operators and develop a clear vision of their goals. Getting that much internal and external support isn’t a small effort.
The good news, she said, is that in many ways, the operational challenges outstrip the technological ones. What can be done via API to streamline and strengthen the customer journey – for onboarding and beyond – is much larger than what is being done.
For most FIs, the main challenge right now is finding the first step – taking on that first consumer issue, like onboarding, and putting the API building blocks, necessary middleware and orchestration in place to address it. The journey of a thousand miles begins with a single step, Perez said – which means they need to start with a customer’s problem or project, and then solve it.
“They need to get a quick win and learn from it – and learn to build on that,” she said.
From those starting points, FIs can start taking those API building blocks they put in place for one solution, and start building the infrastructure, or utilizing Banking-as-a-Service platforms to solve a range of pain points within their consumer relationships, without having to overhaul their legacy systems or break the bank.
As originally published on PYMNTS.
One decade draws to a close, the next one looms. Only a few months into 2019, the year is already shaping up to offer a bit of a watershed in how we pay and how we get paid.
As the 2010s roll off into the 2020s, the fact remains that technology is blurring the lines that used to exist before the (continuing) digitization of commerce. Along with this trend, as transactions between firms, between people and all the permutations thereof span currencies and timezones, a few guideposts stand out: Everyone wants more speed, better data, mobile movement of money and, of course, security is paramount.
PYMNTS queried nearly two dozen C-level executives from companies at the forefront and intersection of technology and innovation. Here, you will find insight into what’s next, but also what we need to leave behind. The password is passé, the machines are learning, the data is big and getting bigger. Above all else, said several respondents, trust matters more than ever.
How to get there remains a matter of debate, and is a driving force behind innovation. Some of the executives we spoke with pointed to new ways to establish digital identity as among the biggest innovations on the horizon worth pursuing, perhaps through the use of distributed ledgers or biometrics. Others said the digitization of commerce, with an attendant move toward omnichannel, will drive change in the decade ahead.
As always, in payments, the one real constant is change. Read on to see what’s top of mind as we go “out with the old and in with the new.”
As originally published in Forbes.
While the word “FinTech” may often be on many people’s lips and minds these days, the truth is there’s still a bit of uncertainty and ambiguity about the different types of players, and even what constitutes a FinTech company. Part of the problem is a tendency among many of us to want to see things in binary and mutually exclusive terms. Head-to-head competitors. Winners and losers. It’s done this way or that way.
With that in mind, I’ve set out to describe what I, and others in the industry, widely consider the principal types of FinTech companies and how they interact.
What Makes A FinTech Company?
Financial technology, as the word derives from, often brings to mind images of young startups providing financial services directly to customers, usually with a greater degree of convenience. One typically imagines them as agile disruptors in direct competition with slower incumbents.
In reality, many incumbents today are themselves innovating with the help of FinTech companies that work behind the scenes via application programming interfaces, banking-as-a-service (BaaS) and other delivery models, enabling all manner of institutions and even peers, to remove frictions and provide opportunities that may be just beyond their technical and geographic reach.
Technology Or Services?
Herein comes the first and most important distinction we can make: Do FinTech companies provide technology, or do they provide financial services to an end user? This is becoming a hotly debated issue, but one that, at least in my mind, is fairly straightforward. Both are FinTech. The difference is that some enable financial services through digital platforms and others employ those technologies to offer services in a more direct fashion to a final customer.
The fact that a technology provider may deliver its product under a service model does not mean it’s providing financial services. For example, Plaid is a technology provider, and Venmo is a services company. The latter, as it happens, uses technology from the former to verify bank accounts.
The Many Faces Of FinTech
Indeed, the rise of FinTech companies has created new business models, applications, processes and products across many categories. Let’s take a closer look and try to illuminate some of these in the context of practical activities.
This is perhaps the most misunderstood area of FinTech, and it’s no surprise. That’s because the term banking itself conjures up a range of activities in people’s minds and is something that in most countries only a highly regulated and licensed entity (i.e., a traditional bank) can actually do.
For this reason, I would argue that there are few pure banking FinTech companies. Instead, there are various organizations participating in different parts of the banking value chain (e.g., streamlining the opening of accounts and getting money from pocket A to pocket B). Implicit in this concept, and a fact often lost among many observers, is the participation of a licensed entity somewhere along the chain.
The exception to this rule, and a very important one, is hybrids. These are technology companies that actually own and operate a banking entity, like GreenDot in the United States and Germany’s solarisBank. They are the most uncommon species of FinTech and for good reason: Few technology companies have the fortitude to operate a bank or a business model to justify one. What the majority of FinTech companies do is enable banking-like activities either directly or indirectly with banks.
Digital lending is another category in the FinTech space that’s bringing customers greater convenience and choice. Loan origination software today allows companies and customers to apply for and receive personal, car, mortgage or commercial loans without entering a bank or credit union. Here, too, due to regulatory frameworks regarding the kinds of entities permitted under law to issue and hold loans, FinTech companies typically work as part of a value chain where they can be disruptive. For example, they can act as faster brokers and deliverers of loaned monies.
Another area is insurance. Today’s InsureTech companies often rely on data science, such as sensors or wearables, to offer customized personal, home, car and life insurance using artificial intelligence (AI). They also use the internet of things (IoT) and real-time information gathering to identify and control risks, while also offering dynamic solutions and pricing based on unprecedented access to data.
• Personal Finance And Investing
There is also a category of FinTech focused on helping consumers make better decisions for their personal finances. This often includes comparative tools to select their next credit card, loan or insurance. In this space, there are also tools that help individuals manage their personal investments portfolio with automated investment recommendations or robo-investing.
One of the most popular FinTech segments is payments. This branch allows people to send money to one another without necessarily using traditional bank channels and make instant payments to one another, employees and vendors. This technology also enables companies to rapidly scale business operations without the need for traditional payment infrastructures. Consider Uber, Lyft and Instacart — all are able to operate digital payments for payroll and procurement, eliminating the time lag as the money moves from consumer to business to employee and so on.
FinTech companies participate in some form or another in just about every category within the financial services sector. Even beyond the list above, you can find FinTechs within cryptocurrencies, blockchain, and even crowdfunding and taxes. This list is as diverse as financial services themselves.
Some of the misunderstandings about FinTech has to do with the sheer breadth of the category, for sure, but probably more to do with the fact that few organizations publicly disclose and explain the complex cooperation that is actually taking place behind the scenes, instead simply referring to “ecosystems” and different participants. The truth is that we’re living in a much more interesting and collaborative world than we ever could have imagined. FinTech companies are no exception and operate squarely in that world.
As originally published in PYMNTS.
Consumers take a somewhat binary view of the features and functions that come packaged as innovative: They either believe those innovations can solve problems and, therefore, embrace them or the consumers go somewhere else that offers legacy features and functions.
Those consumers also don’t care about the efforts required to make those innovations valuable — only that they are, indeed, valuable.
Things aren’t so straightforward for those who create those innovations — which, as NovoPayment CEO Anabel Pérez told Karen Webster in a recent conversation, is a challenge for many banks in the Americas to fully grasp.
“Many banks [in that region] choose to work primarily on the surface, emphasizing the app layer,” Pérez explained. “The focus is correctly on the customer experience (for example, improving onboarding and presenting information so that it is more user-friendly), but they can also take a different, deeper approach.”
Pérez said that banks are starting to understand the benefits of “connecting the dots” to the functionality that lies beneath those user-friendly interfaces, allowing them to create more consistent, seamless consumer experiences over time.
Application programming interfaces (APIs), Pérez added, offer another approach. Plugging into a series of one-off APIs that connect with legacy systems is great for quickly enabling functions, but some banks may want to optimize down yet another layer, given the ever-expanding number of interfaces and channels they may need support with features and functions that consumers and businesses value.
Innovating in that layer can come by way of an end-to-end, Banking-as-a-Service (BaaS) platform that powers these experiences — the “invisible engine” that enables banks to integrate into an expanding and transferable digital ecosystem, without having to wholesale redesign their legacy systems or choose a roadmap of endless superficial improvements.
Beauty In Banking Is More Than Skin-Deep
The problem with mainstream banking in the Americas right now, Pérez told Webster, is that bankers both get and don’t get the pressure to modernize their consumer and commercial offerings. They acknowledge that they aren’t innovating as fast as FinTech firms, they want to stay relevant and they can feel the pressure of moving slowly in a world that is all about speed.
However, as they seek guidance on how to move faster, she noted, they realize that they may only be scratching the surface when it comes to addressing consumers’ ever-changing preferences for touchpoints and interfaces.
“Some bankers in the Americas, even those who are mobile and digital contemporaries, still believe the best way to provide the right customer experience is through branches, ATMs, web interfaces or even mobile interfaces,” Pérez pointed out.
That way of thinking, she said, lacks an appreciation for what is needed to stay relevant: connecting those individual interfaces on the front end into a single, seamless back end. That’s how a bank goes about offering a digital experience that isn’t just beautiful (i.e., in a well-designed app with a smooth user experience), but functions across all the relevant moments and channels its customers want to use.
Bank executives, Pérez noted, are waking up to this reality. They understand the experience they want to offer, they see the FinTech partnerships they’d like to make and they are running up against a reality where they often can’t do what they want to do with a single approach. They want to do things like aggregate consumer data across channels or enter collaboration models with other players, but they find their legacy systems just “can’t connect the multiple systems needed to provide services in a unified way.”
Just pointing them vaguely in the direction of a “Banking-as-a-Service platform” isn’t really helpful because the definition of that term varies quite widely, depending on where one is saying it. The term means something different in Europe, the U.S. and Latin America, Pérez said, “and then regulators in any of those places may use the term differently still.”
NovoPayment, she noted, uses the term to describe its modular approach, offering flexible delivery models from an end-to-end open platform that can “provide the complete full stack of a modern open bank, without being a bank,” down to consumable APIs. She noted that Legos are often used as a metaphor for APIs — how they work in financial services as little pieces that institutions can use to build complete sets of service offerings. Pérez believes it is a good metaphor, but noted that it often overlooks a reality: Lego sets come with instruction manuals that tell the users how to build a set. Without those manuals, one could have a messy pile of Legos and not a lot of direction.
“You may need someone to help you assemble the pieces or help you see other options,” she said.
An end-to-end BaaS solution can pull out the pieces (APIs) that its banking partner needs, and assemble them invisibly on the back end into something coherent and applicable in other places. A lot of things that pass as a BaaS platform, Pérez noted, are actually closer to third-party API networks: The pieces are there, but there is a lack of the building expertise needed to build a functionally robust back end.
It’s not always a difference that is easy to explain, Pérez told Webster, but it’s one that banks are becoming increasing receptive to understanding, as pressure mounts in the global financial services sector to keep up with rapidly innovating FinTech firms.
“We position ourselves as a FinTech, and as an enabler that allows our partners to provide a full range of services that can be configured in different ways and countries for different use cases,” she said.
It’s a complicated process that requires NovoPayment to operate a full platform stack, and to be integrated and tied into original data sources, Pérez noted. However, that’s what is necessary to enable a range of banks that may be looking for a robust front-end offering or a complete and flexible back-end to support it.
It’s about the services banks can offer their customers, she said, but also about the services they might want to offer other financial services players. That might mean banks enabling FinTech providers in a certain sector to capture all that data on money flow, she explained, but banks need to be enabled on the back end by a platform that can turn on those lights in the background, in a way that using APIs makes sense.
“Banks that sit on an Open Banking platform are better able to provide services in the way they need, in order to compete in the long run against all new participants in the financial services space,” said Pérez.
As originally published on PYMNTS.
NovoPayment, an enabler of digital financial services, announced Wednesday (November 28) the expansion of its Developer Hub to include new partner-integrated application protocol interfaces (APIs), enterprise customer functionalities and an enhanced user experience.
In a press release, the company said its Developer Hub is “the first bank-agnostic portal of its kind offering resources to software developers seeking to build new payment and financial service solutions, enhance existing products and accelerate their initiatives.” NovoPayment said the various API combinations form the key building blocks to enable use cases such as digital account origination, mass payout, instant issuance, and the creation of settlement accounts for merchants, among others. In addition, its underlying platform provides access to more than 50 network integrations across six markets and an ecosystem of more than 1.6 million end-points.
“This latest expansion of our portal further solidifies our commitment to helping developers and other innovators within banks, financial institutions, acquirers, fintechs, gig companies, and other organizations to collaborate, join value, remove end-customer frictions and gain time to market,” NovoPayment CEO Anabel Perez said in a press release announcing the enhancements.
The most recent ones include APIs that are back-end integrated with functionalities from companies such as Visa, Facebook, LexisNexis and other national identification systems. The company said it saves developers time required to certify on various systems to enable digital financial services. Another enhancement improves the user experience by including fully optimized mobile-first UX, support for retina-display ready devices, and refined API documentation. NovoPayment said the improvements help developers work more comfortably and efficiently while using the Developer Hub. With the release, NovoPayment said it now offers more than 100 APIs addressing a diverse range of Latin American geographies and verticals. The company’s APIs are available in a sandbox mode for the purpose of testing and experimentation prior to deploying in a production environment, it noted in the press release.
MIAMI – November 26, 2018 – NovoPayment, a leading enabler of digital financial services for the Americas, today announced the expansion of its Developer Hub including new partner-integrated application protocol interfaces (APIs), enterprise customer functionalities and an enhanced user experience.
NovoPayment’s Developer Hub is the first bank-agnostic portal of its kind offering resources to software developers seeking to build new payment and financial service solutions, enhance existing products and accelerate their initiatives. The company’s various API combinations form key building blocks for enabling market-relevant use cases such as digital account origination, mass payout, instant issuance, and the creation of settlement accounts for merchants, among others. In addition, its underlying platform provides access to more than 50 network integrations across six markets and an ecosystem effect of more than 1.6 million end-points.
“This latest expansion of our portal further solidifies our commitment to helping developers and other innovators within banks, financial institutions, acquirers, fintechs, gig companies, and other organizations to collaborate, join value, remove end-customer frictions and gain time to market,” said NovoPayment CEO, Anabel Perez.
The most recent enhancements include:
With this release, NovoPayment now offers more than 100 APIs addressing a diverse range of Latin American geographies and verticals. The company’s APIs are available in a sandbox mode for the purpose of testing and experimentation prior to deploying in a production environment.
Miami-based fintech, NovoPayment enables digital financial and transactional services via a cloud-based, bank-grade platform that supports varied mass disbursement and collections services. The company helps banks, financial institutions, and others throughout the Americas to leverage their existing systems and services to generate new UX, deposits and transaction streams. For more information, visit novopayment.com and developer.novopayment.com.
As originally published on Forbes.
A lot has been written about open banking. In Europe and elsewhere, it’s discussed in the context of regulation, privacy and other considerations. In other circles, like in Latin America, it’s seen as a distant wave. Search people’s expressions in related conversation and they seem to say “Keep an eye on it, but it’s not a pressing concern. It’s a choice we could make some time down the road.”
But what if it’s not? What if it’s inevitable? What if it’s the next technical and transformational change in financial services, bigger than the internet and mobile combined?
It is precisely that.
For the financial industry, open banking is bigger than the internet and mobile, because while those technologies changed the edges, they weren’t able to meaningfully touch the core of banking and financial services with any magnitude. They didn’t materially disrupt fundamental systems or break our obsession with building product line-dedicated networks and systems. Sure, they were historic events that changed the channels, endpoints and introduced some new methods but not the basics of the business.
Think about mainframes. Technologies that rolled out when the Beatles were embarking on their first world tour have kept humming right through ABBA, MTV and now grandchildren live-streaming Taylor Swift on their iPhones. On one hand, we should applaud these resilient relics that are somehow still in the background registering our Venmos, but on the other, we shouldn’t stop balancing the cost of practicality and convention against the need for new tools — and the true distance of the next wave.
A New Definition
In my mind, open banking is more than a mandate or a new digital core. It’s any time a bank or financial institutions collaborate with a third party to deliver new services and more frictionless and scalable experiences via new, external platforms. Today, it most likely involves a fintech and APIs, the favored building blocks of innovation.
This is to say it’s an accepted approach more than a strict technical definition. It’s an incumbent saying: “We’re on board with models and practices that are inclusive of other participants. We don’t have to be closed and centrally controlled to play the game.”
It is, of course, a natural expression of the “openness” and “ecosystems” that started in the software industry and, most notably, in mobile with iOS and Android — worthy examples when thinking about open banking.
Imagine what it must have been like just before the AppStore launched, when the world’s best creators of consumer electronics were told: “We’re not going to build most of the products that go on this platform. Other people will.” Apple’s App store generated $11 billion in revenue for the company last year, overwhelmingly with the help of third parties.
I’m not suggesting that banks try to wholesale imitate Apple and Google or simply go into the business of licensing their licenses. But I do think there is a lot to be said for the idea that you can both continue creating your own products and open space on new platforms for others to create and co-create with you to capture opportunities you couldn’t even begin to see, much less capitalize on, on your own.
The internet and mobile are critical catalysts, to be sure. Without their combination, the world as we know it today wouldn’t exist. But it’s the larger trend of openness and collaboration that they helped galvanize that convince me that open banking is actually a different kind of wave. It is what in physics is known as constructive interference: waves passing through each other, their crests combining to produce a wave with greater amplitude.
I believe that, with anticipation, preparation and experimentation, this wave can be safely and prosperously surfed, but it also demands caution of those who miscalculate its proximity and turn their backs towards the sea.