Banks Need to Increase Focus on APIs if They Want to Match Fintechs, Verizon Says

EXCLUSIVE— It’s no secret that banks don’t move all that fast when it comes to new innovations, but most are starting to match fintechs at the customer experience level, according to Verizon, which provides software and internet connectivity to much of the industry. But the internal systems of traditional financial institutions are a different story.

It’s the backend software and APIs that banks need to focus on next, according to Jeff Granvold, senior manager, business innovation and digital transformation for Verizon Enterprise Solutions.

“It’s becoming paramount for banks to have a more nimble network, especially as banks are increasingly moving applications to the cloud,” Granvold told Bank Innovation. “They’re looking for nimble smart networks that will [handle] different types of workloads.”

Granvold’s group specializes in creating enterprise solutions in fields like mobility, the Internet of Things, and data security, all of which are becoming paramount to banks, Granvold said.

Of course, these are all areas that most financial institutions are already working on, albeit for their customers and not for their own internal systems. Banks and FIs also need to look at “the future needs of the business,” as well as their customers, Granvold said, which means adopting the technology in the same manner.

For banks used to running on COBOL, making the jump to new technologies can take a little while, but it seems as though the process has started, although banks may be approaching it a little differently than fintechs, according to Granvold, who noted that there are “so many ways of utilizing APIs” and new technologies for banks.

While very few banks are running key systems on blockchain-based systems just yet, more and more banks are moving their systems to the cloud and are starting to use APIs for more than just support for retail mobile banking apps. (Artificial intelligence and machine learning are slightly ahead of blockchain here, as more banks are using those too for data collection and insight).

“What we’re seeing is not a revolution, but it’s an evolution,” Granvold said of the banks’ approach.

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