To BBVA USA, the future is about enabling fintech startups rather than competing with them.
It’s been almost a year since the U.S. arm of the Spanish multinational bank rolled out its Open Platform, a banking-as-a-service platform through which it offers four main APIs for startup clients. They include identity verification; “move money,” which means clients can execute custom ACH transactions, bill bay and real-time transfers; account origination; and card issuance.
According to Susan French, head of product at BBVA Open Platform, the Birmingham, Ala.-based bank will continue to grow its product suite for fintech partners as a means of building its own brand, even if the end consumer doesn’t know BBVA is supporting the capabilities of the startup provider.
“The bank, and the global bank in particular, is committed to innovation, including incubating businesses that compete directly with the bank,” French said. “The only way you build a bank of billions is by enabling all sorts of other people or networks to be customers of the bank. At the end of the day, they’re customers for BBVA or deposits for BBVA, even if it doesn’t have the BBVA brand on it.” Through clients who use the platform, the bank has reeled in more than 50,000 new customers as of June of this year, as previously reported by Bank Innovation. BBVA didn’t comment on current customer numbers, but noted that the number of end customers has grown significantly in the past few months.
The Open Platform’s current client base covers digital banking and personal finance, including business banking startup Azlo, online accounting software company Xero and personal finance app Digit. It also recently added freelancers’ banking platform Catch and small business banking startup Wise. French noted that while Open Platform serves startups, it’s also available to established enterprises — regardless of size — who can use it to open up banking and payments services to customers, within their own branded customer experiences.
The BBVA Open Platform, which generates revenue for the bank from transaction and other service-based fees, is in the process of adding more capabilities that can be accessed through the APIs, including savings accounts and payments tools such as domestic wire transfers and cross-border remittances, by early next year, according to French. It’s also considering, through user research, what types of lending or credit products would best suit the needs of its customers, be it credit cards, insurance, small business-focused lending products or working capital.
BBVA’s banking-as-a-service platform follows a ‘sandbox’ approach, bringing in capabilities from partners where circumstances permit. While brand disintermediation is a concern for institutions pursuing banking-as-a-service models, a “walled garden” approach to growth is no longer an option, according to French. Instead, a commitment to support the growth of new financial product and service innovation is the way BBVA is looking at the Open Platform’s next phase.
“It used to be that the only game in town was your local bank,” said French. “When I think about the democratization of financial services, what that means is you as a consumer, or you as a business, can get your financial services from a lot of different places now, and the number of places you can get them will continue to grow.”
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