Building Professional Services for Banking Platforms
After a decade spent working at PayPal, in 2017 I joined Capital One to build a professional services organization for the Capital One DevExchange — the first true open banking developer platform in the US. This decision was based on my desire to explore the innovations impacting financial services, as well as my desire to help create more efficient and inclusive systems that deliver lasting changes to the banking industry.
Before joining Capital One, I spent four years living and working in Luxembourg and Singapore. My time in those two large financial centers opened my eyes to the ongoing transformation of the banking industry — a transformation driven in parts by new financial technologies, new business models, and the shift to digital. In a world where branch visitation is rapidly declining and customers demand frictionless mobile experiences centered around their financial lives, banks will need to adjust to survive digital disruptions and maintain their leadership positions. I believe the challenges with this shift are twofold.
Driving Partnerships with API Platforms
First — Corporate incumbents will need to to open up and partner with each other and with fintech newcomers. These partnerships will lead to the platformification of banking. The pressure to meet customer needs through co-creation and co-development will push banks to make their core capabilities visible through APIs. This means developing flexible interfaces for key banking functions (deposits, payment services, loans, commerce identities, loyalty & rewards, investments, etc.) that are easy-to-access while managing the backend complexity of regulatory compliance, privacy, and security.
Creating Partner Ecosystems Through Professional Services
Second — Banks will need to develop tailored smart services to drive engagement for their new technology platforms and facilitate the integration of their capabilities within third-party applications. These services will be new for most financial institutions and will present a challenge to many as they go well beyond traditional business development activities centered around data sharing, affiliates management and marketing campaigns. These new offerings should be supported by dedicated engineering services teams, independent from product-dominated lines-of-business, and centered around developers and strategic partners. Through real-time customer engagements, they will initially offer technical services to help developers accelerate adoption of the newly created banking API products. Over time, they will have an opportunity to evolve and focus on developing innovative business solutions for their customers based on a wide range of internal and external capabilities. This will ultimately help share the bank expertise and offer differentiation in the marketplace.
The Rise of Digital Banks
This new era of banking will have major implications for banks and will force their rapid transformation into technology-driven companies. By making available the foundational blocks to abstract complex financial rails and core backend processes — as well as their other natural assets (access to low-cost capital, strong customer base and brands) — banks will help unbundle the financial services sector, create new vibrant verticals, and build alternatives to traditional banking consumer experiences. In turn, they will benefit from the accelerated fintech innovations that will ultimately create value for their global customers and drive the industry forward.
At Capital One, we are committed to delivering high-quality solutions for developers and partnering with them to build the next-generation of consumer experiences. As an early adopter of banking-as-a-platform, we aspire to lead the inevitable and irreversible digital trends changing our industry. In spring of 2016 we launched our DevExchange portal designed to connect and drive co-creation with developers, to capture their insights, and to quickly evolve with their feedback. We believe in powerful technology and are hoping to help reinvent financial services. Together.
DISCLOSURE STATEMENT: These opinions are those of the author. Unless noted otherwise in this post, Capital One is not affiliated with, nor is it endorsed by, any of the companies mentioned. All trademarks and other intellectual property used or displayed are the ownership of their respective owners. This article is © 2018 Capital One.
