Financial institutions

Fintechs and financial institutions can step into the future with a digital gateway

Fintech can be a multiplier for fintech. What does that mean? Fintech companies can work with other Fintech companies to advance their solutions faster.

Rather than building different versions of products and services for each banking core, an open API digital gateway offered by a fintech partner can allow developers to build once. Traditionally, “check balance” would be “said” differently for each core, but a digital gateway can translate the command so that it is “heard” in a way each core understands. By collaborating, fintech innovators can eliminate the need for multiple versions and scale faster to serve more banks and credit unions running on different cores.

A single, unified interface that translates communication between modern technology solutions and banking cores can launch legacy systems into the future. Through this layer of abstraction, more opportunities to develop and deploy microservices are created. For example, fintechs can address key capability gaps, such as authentication management, or address issues such as API response time, by developing cloud-based microservices that integrate into the core via the gateway. When fintech innovators are able to build one version of a solution, and it can be used by all financial institutions – regardless of core chosen – microservices proliferate, giving banks and credit unions a range of options.

Connecting to an open API digital gateway also allows fintech developers to access data behind the walls of a financial institution’s central banking system. Data is an essential ingredient for custom tailored solutions for bank customers and credit union members, and it also deepens the functionality of the solution. Interactions with an AI chatbot, for example, can become more meaningful. Rather than being limited to exchanging information that does not require account information such as branch hours, user authentication can extend the self-service experience to include requests and advanced actions that require the user’s private financial data.

A fintech that provides a digital gateway to other fintechs is similar to a relationship structure often seen in the construction industry. Think of a building supply store that sells products to both professional contractors and homeowner customers. The digital gateway provider is the “store”. The Fintechs that use the digital gateway are the “contractors”. And the financial institutions are the “owners”. Both the store and the contractor sell to the owner, but they usually sell different things. Working together allows the gateway provider and the gateway user – both fintechs – to grow.

Even banks large enough to have their own developers can benefit from a digital gateway, which can provide access to the core of the financial institution and put microservices created by third parties at your fingertips. The gateway conserves resources by making it unnecessary for internal developers to maintain changes to the institution’s own API to accommodate integrations and provides easy access to data in its core. The gateway’s microservices and access points are cloud-based, but the real gateway is physically located in a remote data center, saving financial institutions the cost of servers and other equipment.

Otherwise, why are next-gen web developers moving beyond monolithic architecture and embracing APIs and microservices? When all the small elements of a system have their own functions and are serviced separately, complexity is reduced and maintenance is simplified.

Traditional implementation delays in today’s fast-paced world lead to missed opportunities. The ability to respond in an instant through a digital gateway is a competitive advantage that sorts the rankings. According to McKinsey research, “Three-year revenue growth (over 12%) for top fleets was nearly double that of companies that played it safe with average reactions to digital competition.” Modern implementation models are gaining market share.

It’s time for fintechs and financial institutions to turn to an open API digital gateway for the scalability and flexibility offered. Not only can new services be “up and running” in no time, they can also be effectively monitored, measured and reported.

Inaugurating the future today is the way for fintechs and financial institutions to have a place in the financial landscape of tomorrow.