Innovation is a word that financial institutions have heard a lot in the last few years. Community banks and credit unions have been focused on innovating to compete with megabanks and fintechs that are pouring money into development and shaping user expectations for what a digital banking experience can offer.
Regional banks and credit unions are struggling to keep pace on their own to engage their users in ways megabanks and fintechs can with their investments. The demand for digital banking innovation requires financial institutions (FIs) to either do it themselves or partner with digital banking platform companies and/or fintechs to quickly take advantage of new ideas. But, there are digital banking solutions FIs can take advantage of to accelerate time to market and become competitive now and into the future. One such aspect of a modern digital banking platform is extensibility: the ability to integrate and customize the digital experience with built-in platform resources.
Innovation calls for transformation
The industry operates in a time where consumers demand constant innovation. As a result, new financial technologies have rapidly emerged to meet these expectations, and market resources have shifted accordingly. What’s driving the demand? Megabanks and fintechs investing billions of dollars every year in financial services innovation, making digital experiences increasingly personalized and intuitive. As users spend a growing number of hours in finance apps, the stakes for user engagement and innovation are higher than ever. According to AppAnnie, the total time in banking apps globally on Android phones alone has surpassed 31 billion hours annually. Not all FIs have engineering staff to help build digital banking features, but a large number of third parties offer specialized services to meet the unique needs of their users.
An FIs’ digital banking solution can be the central hub for their users to access fintech tools all in one place. All it takes is a robust integration strategy with native and third-party Application Programming Interfaces (APIs) to offer direct in-app access to the innovative solutions your users are already leveraging elsewhere. For many FIs, digital transformation is necessary before embarking on achieving that kind of accessibility. The right banking software can get FIs where they need to be faster with targeted innovation.
Extensibility is an ecosystem of innovation
To accommodate FI-specific requirements without augmenting or changing existing platform code shared by multiple FIs, the digital experience must take place in an ecosystem designed to customize, personalize, and integrate solutions into the user journey.
API integration is custom and CRM-agnostic to work alongside an FI’s current digital platform stack, and can make digital banking platform-controlled data available to end users on other platforms. For instance, APIs can work with customer service AI bots, allowing third parties to utilize online banking data to service users via automated chat, call, and center response systems.
APIs can also deliver banking information to alternative devices and platforms, and allow FIs to enroll users in online banking while they are opening a new account. Users can also be granted the ability to view their data on other financial service platforms.
Branch employees also benefit from integrations, with opportunities to streamline back office processes—CRM integration feeds advanced data to produce a full-lifecycle customer journey view, powering an FI’s marketing strategy and tech. Admin APIs grant FIs the power of the digital banking platform to build out functionality that can improve business processes or extend beyond digital banking.
All of this takes place within a microservices architecture, which grants FIs the flexibility to write their own backend components. Microservices enable updates to only one specific function deployed independently, rather than touching one large piece of code and deploying all of it at once. This approach reduces testing complexity, supports zero-downtime deployments, and aids automation and extensibility with the help of API-based communication.
Some microservice examples include:
- Custom e-statements
- Custom skip-a-pay
- Person-to-person payments
- Salesforce integration
- Call WordPress API
Microservice architecture also adds resiliency by enabling a simple or even automated rollback of deployments that are not behaving as expected. If something goes wrong, the lift is light, as rolling back a small change is much simpler and less disruptive than recalling the entire code base. For users, their exposure to updates is limited for a seamless experience. For FIs, this results in deeper trust in their solution provider.