Menu
Banking Exchange Magazine Logo
Menu

Time for “platformification”?

Could a plug-and-play platform be banking’s future?

Fairly ugly as words go, "platformification" may be more attractive as a strategy. Fairly ugly as words go, "platformification" may be more attractive as a strategy.

Aside from any online shopping that bankers may do, many banks now use Amazon’s outsourced IT services. Unlike most vendors they rely on, financial institutions would do well to aspire to Amazon’s business model, according to Ron Shevlin, research director for Cornerstone Advisors.

Amazon is the truest example of what Shevlin calls “platformification”—an admittedly “ugly word” that he believes will have a significant impact on the financial services industry.

Shevlin, speaking at the fall BAI Beacon conference, described how Amazon has built an e-commerce infrastructure with a toolkit to integrate producers into its platform.

“Amazon has created a plug-and-play platform that allows producers and consumers to exchange and create value,” he said.

Such an approach in banking, Shevlin added, would support an environment in which fintech and traditional financial services providers work together.

However, Shevlin noted: “Ask consumers how many of these fintech start-ups they want to do business with to solve their financial needs. The answer is that they don’t. Someone has to pull everything together in a cohesive way for consumers that makes sense.”

Banks and plug-and-play

That’s where financial institutions add value, said Shevlin, providing “a platform in which multiple providers can play together nicely in the sandbox to meet consumers’ financial services needs.”

“The bank of the future will embrace a plug-and-play business model that allows multiple participants—producers and consumers—to connect, interact, and exchange value,” predicted Shevlin.

A platformification strategy requires institutions to become magnets that attract both producers and consumers; become matchmakers that provide a platform for consumers to find the right products and services across a series of producers; and have toolkits that integrate producers easily into the platform.

Who’s up to “platformification”

Shevlin noted that BBVA Compass is working on platformification in Europe.

“BBVA application programming interfaces [API] allow third parties to give their clients access to information in BBVA accounts.” He said U.S.-based Capital One also is launching a series of APIs.

Shevlin added that “platformification is an open environment. You don’t need to partner with these producers; just offer them easy plug and play.”

Lisa Joyce

Banking Exchange Senior Contributing Editor Lisa Joyce has 20 years of experience as a freelance writer and editor, with expertise across the full spectrum of the financial services industry, including banking, insurance, and capital markets. She specializes in interviewing high-level executives about business challenges, strategies, and transformations. She can be reached at [email protected]

back to top

Sections

About Us

Connect With Us

Resources

Webinar: From KYC to IDV

How three leading banks are utilizing cutting-edge
digital tools to onboard, win, and wow customers

Time/Date: June 23, 2021 11:00 a.m. ET

Digital adoption, already moving at warp speed, accelerated seven years into the future during the COVID-19 pandemic. As the number of bank branches continues to fall, with at least one study predicting all branches will disappear by 2034 (Fox Business) and foot traffic declining (Vox), today’s most innovative banks are charting a new, digital-first path to win over customers while increasing security, meeting KYC compliance requirements, and winning customers to drive revenue.

In this webinar, you’ll hear from John Baird, Founder & CEO of Vouched, Tyler Crawford, COO of Bankers Healthcare Group, Anand Sathiyamurthy, CPO of Flagstar Bank and Daniel Sheehan, Chairman & CEO of Professional Bank as they describe their vision for digital transformation and how customer expectations are changing to digital first. They’ll also explore how fostering an innovation mindset creates new ways to tackle complex KYC problems and allows them to quickly compete in new markets and win customers.

REGISTER NOW!

This webinar is brought to you by:
Vouched Logo