In the second installment of our 2019 Financial Marketing Trends blog series, we want to explore what system integration via open architecture will look like for community banks and credit unions this year and beyond.
The financial industry is currently experiencing a transition from using all-in-one technology to focusing more on third-party partnerships. This means rather than relying on one system for everything, financial institutions are tapping multiple systems for varying functions.
As a result, they require robust system integration built on open APIs. This open architecture allows systems to speak to each other so information can easily flow throughout the bank.
What are the benefits of this approach to system integration in 2019?
When all of a bank’s systems can speak to each other, everything runs smoother, and this is made possible with open APIs.
As stated by the executive director of the Banking Industry Architecture Network (BIAN), the new “sharing” culture in banking (driven by the European Union’s Payment Services Directive II) will be underpinned by open APIs, which are universally compatible and allow banks to open up payment services to third party providers.
This system integration via open architecture allows for processes that were once manual and tedious to be automated, resulting in increased operational efficiency. For example, with system integration, customer or prospect loan requests can be submitted on a bank’s website, translated into referrals, and automatically routed to a loan expert via the CRM. This significantly reduces the number of steps banks need to take to get requests to the right people in the organization who can fulfill them.
Comprehensive Customer Service
Automated processes enable banks to communicate with customers more easily and deliver more comprehensive service. They can minimize delays in issue resolution and provide customers with easy access to more information that is valuable for the banking experience.
System integration and open APIs are particularly important for delivering higher levels of service to commercial customers. According to Accenture’s Open Banking for Business Survey, 90% of banks are ready to build an ecosystem platform with third-party services for commercial customers. This would allow banks to offer a full suite of solutions, including bookkeeping, tax services, payments, and more.
When banks are able to integrate with multiple third party vendors, commercial customers can get everything they need from their bank, rather than having to implement various systems on their end. Being able to deliver this multi-pronged offering is a real advantage to banks looking to expand their corporate customer base.
System integration will only grow in importance as the financial industry continues moving toward an open banking model, in which systems provide users with a network of financial institution data through the use of APIs.
In fact, the 2018 Innovation in Retail Banking report found that open banking APIs and advanced analytics were the technologies thought to have the greatest impact over the next 12 months. And, with 80% of banks significantly investing in open banking use cases for small- and medium-sized enterprises (SMEs) and large corporations, this seems to have been an accurate prediction.
The biggest barrier to participating in open banking is existing core systems, as a recent BIAN survey found 60% of respondents were concerned that banks would struggle to open their APIs because of “the current state of banks’ core architecture.” By focusing on transitioning from legacy system architecture to open architecture in 2019, you’ll be better positioned for this future.
360 View Offers API Integration
At 360 View, we understand the need for an open architecture to facilitate system integration. Our growth platform offers an open API that makes it easy to send information from our CRM to other systems. We work with you to ensure seamless communication and streamlined workflows across departments.
Want to know more? Schedule a demo with our team to learn about how we can help your bank grow.