Open APIs – Understanding the Technology and Components
Available On Demand – 48 minutes
Hearing a lot about Open APIs but not sure how they really work? Join the CCG team for a panel conversation with host Scarlett Sieber and industry veteran Joe Spatarella joined by special guest Scott Graf as they discuss the technology and components behind Open APIs.
As part of our commercial webcast series, today’s topic will focus on business banking, treasury management and payments, although much of what will be discussed applies to the consumer as well.
Listen in as the panel defines what APIs are, clears up confusion with industry buzzwords, and then dives into the difference proprietary vs open APIs and when each ones makes sense. The panel will also discuss the benefits and obstacles of APIs and the next steps you should take as a banking executive.
Subscribe to CCG Insights.
Scarlett Sieber Hello again, welcome back to CCG’s webcast series, we are on the commercial banking series, coming to you with another great topic. This week we’re going to be looking at open APIs and really understanding the technology and the components behind said APIs. As always, for this commercial banking series, I’m joined by my colleague, the incredible Joe Spatarella, who is a Managing Director here at CCG Catalyst. I am Scarlett Sieber, your host, Managing Director, Chief Strategy & Innovation Officer here at CCG Catalyst. We have a very special guest for you this week. But before I introduce Scott, let me go over a few quick housekeeping things. If you look at the bottom of your screen, you will see a variety of buttons. The one that I want you to look at first is the one of Joe and my face, for those of you have joined us before, you are used to seeing that. If you actually click on that, you will see our bios and backgrounds. You can connect with us on social. You can e-mail us directly and you will see our special guest, Scott Graff. Scott’s whole bio is there as well but just to give you a little bit more information about Scott, he is an experienced technologist with a demonstrated history of working within financial services. You will hear a lot about his background throughout the conversation. What I love about someone like Scott is he has that business tech mindset, which is really hard to get. That’s always a good combination when you’re diving into the world of APIs, which we will be doing today. So, Scott, thank you so much for joining us. And of course, Joe, thanks for being back, as always. All right. The rest of the buttons very quickly, next to that picture of Joe and I, you will see the CCG logo. There will be a variety of resources there for you. There are some great articles that Joe just published. There are some articles from the Financial Brand from the rest of the team as well talking about open API. There is a lot of content there, look at your disposal, there’s a lot to explore. And of course, we also have that Q&A button. So throughout the whole webcast, please go ahead and submit your questions there. I know Scott and Joe are very excited to answer them as well as myself. So please go ahead and answer them now or if you don’t feel comfortable asking a question now, go ahead and you can submit something later or you can e-mail us directly and we’ll go from there. OK, so now that we’re done with housekeeping, let’s dive into the topic that is something that I care a lot about, which is APIs. So, gentlemen, let’s get started. Joe, I’m going to move over to you first before we fully get going here, let’s set the stage. Can you give us some context on what we are going to be speaking about today so the audience feels like they know where we’re going with this?
Joe Spatarella Sure. This is a very broad topic, but our context is going to be around business, banking, and payments. Although, much of what we’ll talk about today really applies to any type of banking, including consumer. We’re going to level so at the community, regional and large bank as well as core service providers. And really our goals are to clear up confusion about current market buzz words because we hear a lot of new terms that we haven’t heard before and we’re not really sure exactly what they mean. We want to define what an application programming interface or API is. And Scott, will talk about it’s nothing new, but it’s being used in a very different context today. We want to understand existing type of legacy and proprietary APIs versus the new open API and how each of those are used. We want to talk about an open banking infrastructure and how open APIs are used. And we want to identify the benefits and the obstacles to leveraging open APIs. And finally, for banking executives, what are the next steps you should take here?
Scarlett Sieber OK. We have our hands full, there’s a lot to cover, which I think is great. So before we actually dive directly in, there was one thing that you mentioned that really caught my attention, you talked about buzz words. As someone who spends a lot of time in the industry, I get hit over the head with the amount of buzz words. Let’s just set the tone quickly and dive a level deeper, can you identify or elaborate on the difference between digital banking, digital only banking and open banking? Because they all about banking in there. So, what are the differences between those?
Joe Spatarella Digital banking is being used as sort of a bucket for everything these days, but it really focuses on the conversion of every type and all types of information, processes, programs, functions and activities into bits in all areas of the bank, including front and back office, including legacy, middle-ware, customer facing, and partner systems. So it’s really about digitizing all of that data, all that information, all those transactions. It is a fairly general term. Digital only banks, you know, assumes that even the core systems and middle-ware have been designed using open technologies from back to front are in the cloud and have no in-person services. So they would be selling banking and investment services typically. Money is moved using partners like Zelle and debit prepaid cards and other money transfer vehicles like that. So some examples in the US are Chime, Ally Bank, Digibank, and JP Morgan Chase’s Fin Bank. As a result, you’ll hear terms like BAAS, meaning banking as a service or CAAS, which is core as a service. A lot of those are really the ultimate situation you end up in once you’ve created an open banking and digital banking scenario. Open banking and API banking are essentially the same thing. They both use cloud first or open, meaning not proprietary technology standards, that allow easier integration with partner solutions and customers and communications identity management software application levels rather than proprietary interfaces and single sign on. And it’s all in the cloud. That should clear up some of the confusion there. We’re going be creating a lexicon for folks to use as a point of reference and we’ll distribute that down the road here.
Scarlett Sieber Awesome. Looking forward to that. I can visualize it now. Those are great, shareable things that people tend to reference after the fact, which is very helpful. So, Scott, let me move over to you now for a second. With my background, I came from a Spanish bank, so I’ve seen a lot of what was happening in banking over in Europe. But from your perspective in your lens, Scott, what are some of the main strategies around open banking in the US and how is that evolving?
Scott Graf It depends on the strategy, which typically depends on your institution size, where you’re going with things. Are you acquiring other banks? Are you looking to expand your capabilities or are you looking to provide best of breed applications for your customers? I’ve talked to some larger customers who no longer want any kind of weight on their back office. So shift everything to the cloud where I’m trying to remove total cost of ownership, all the way down to we need a common API look and feel because whenever a customer comes onto our domain, we want to have something that is synergized. While modernizing the legacy platforms and core platforms, is definitely a plus, some of that’s being just ditched today with some RPA type processes and those types of things. The mainstay of the strategy is truly to stay competitive in tomorrow’s world. And that’s a huge challenge when you start thinking about competition coming from, whether cores are going to be cloud based or whether we’re talking about competition with non-banks or the neobanks or whatnot, I’ve got to stay relevant. CIOs have a fun and interesting challenge because they’re tasked with delivering all of these products and services like cash management and business banking that traditionally gives to a corporate customer, but also actually keeping pace with this fintech explosion and being able to take those products and services and deliver them to their corporate customers.
Joe Spatarella Let me just jump in for a second. You mentioned a couple of things. One was RPA, which is robotic process automation, which we may have known in the past as workflow automation but with lot more A.I. based in it. And then you referenced neobanks which are really all digital banks. Correct?
Scott Graf That’s correct. What are the RPA processes really solving? The cores as well as the other platforms are becoming more and more modular within the bank. When you look at something, it’s not just simply I need to do A and then I can move to this other system so then B happens, especially with AI getting involved in all of this. You need a fluid transformation of data and messaging on the back end to actually achieve what it is that you need to do. For instance, AI is making a recommendation to some level of event chain on the back end process, it’s not just the core that needs to interface with that advice, if you will, something from the core needs to happen and then that message needs to traverse to one or two other backup systems. RPA is trying to solve some of that, bringing down total cost of ownership. If I need to do something, I can automate those things that I typically have people stroking the keys, but also as AI provides advice to the back end infrastructure RPA processes are able to do something in one system, then the next system and next system. You can think of it rudimentarily as triggers between systems.
Joe Spatarella So really, artificial intelligence and the use of RPA might be on the path towards a total open banking scenario.
Scott Graf Absolutely. That’s not just a core based, although a lot of the RPA is looking at core. A lot of the core things and a lot of the core implementations that are prevalent today are a bit legacy. Right. What’s important, especially with the open API conversation that we’re having, as these other more modern platforms or capabilities, as I like to call them, that banks need to leverage and promote to their customers, come on board, more and more needs to happen with the interaction and interfacing with some of those legacy style systems. RPA, when you do something on more of a modern platform, we can trigger an RPA process that’s going to do a whole lot on the core because a lot of those cores don’t have API or open infrastructure by which those modules are those capabilities can directly communicate with.
Scarlett Sieber Scott, I’m happy that you mentioned the legacy system and legacy settings, because that made me think of something else. When I was at BBVA, the Spanish bank that I referenced earlier, we ended up rebuilding our core in the US from scratch and that really allowed us to do a lot with our open API strategy. So I’m curious, can you explain the difference between a proprietary API and open APIs? And can open APIs be used in a legacy system? So if you have a very old core, can you still take advantage of this open API economy that’s coming? Can you talk a little bit more about that?
Scott Graf Certainly, that’s where things are going to get tricky, which is looking into the future a bit. To backup and answer directly your question. So a proprietary API, an application programming interface, in the tech side of the brain, that is just a means and mechanism by which I can message another system. I consume messages from that other system to get something done. And so that system exposes APIs for me, I can do messages, all sorts of things. But if we were to from the system, go up into the capability, which is I need to do something and this system allows me to do something, a proprietary API says that let’s just say liquidity management, for instance, I can talk to one liquidity management system through a set of proprietary APIs and if I want to talk to another system that provides the same functionality or same capability, that messaging is completely different. I’ve got to stop what I’m doing there, rip some things out, rewrite this, because I’ve got to go talk to them. That’s a great example of a proprietary API. What does that really mean? Vendor lock. If I need to go ahead and switch another system out, there’s a cost to that and not just a cost of the development, but the testing and how things actually function and workflows. So there’s a lot there. That proprietary API is going to give you that vendor lock, if you will. Open APIs. There’s the promise of open APIs, as I like to say, there’s the bumblebees and the unicorns and then which is truly being able to plug and play. So when I’m doing liquidity management, there are certain functions and common things that I do with that. Now, I won’t go into how do I differentiate and those types of things, we could talk about that later on because that’s going to become another theme when we’re talking about open APIs. We’re all doing this one common thing, but how do I differentiate? I can go ahead and I can message a set of standards, if you will, on those APIs that are published and available for me and that I can message those in one system and I can similarly message that in another system. A lot of that gets achieved on the front end when we start talking about authentication, entitlements and some of more of those resources on the back end that are common. In a lot of the open APIs, that’s the promise of what it’s going to deliver, I have a set of published and open APIs. If I am vendor A, vendor B, vendor C, there are certain pieces of functionality that I will deliver through those APIs making it very common.
Scarlett Sieber Thank you. That was helpful. There’s a lot of information there and we dove pretty deep but I want to go even a level deeper if possible. What is the architecture of API banking? And if you could really explain the flows. One thing, as we’ve talked off-line and Joe and I have had a lot of conversations about APIs, it’s always nice to visualize this so we will actually go ahead and put up a beautiful visualization as you are explaining this, because it’s something that is quite complex and I hope it will give some clarity to the audience.
Scott Graf Sure. So talking a little bit about the infrastructure and the architecture of open APIs, one of the things that really makes open APIs accessible, if you will, is cloud based infrastructure. We have our identity access management, which is whereby, I don’t know if you’ve had this experience before, where you’re asked to log into Google to get to something that’s got nothing to do with Google. This doesn’t have to be within a banking space. This is the open off of the OAuth, which has done a pretty darn good job. So I can go ahead and I have what we call an API gateway. That API gateway could be delegated out to multiple infrastructures, whether we’re talking Amazon Web Services, Google Services, Azure, wherever that resource lives. And when we think of that resource, that resource could be something as big as a core banking solution or it could be as small as, I just need to do an OFAC check, it doesn’t really matter. But having an API gateway that sits in front of all of these resources is what is critical because you get these aspects across horizontal type constructs where I can authenticate in one domain and then I can make a message off to a completely separate domain, and still have, whether we’re doing JWT introspection or whatnot, have that domain reach back and go OK, this request being made is authenticated, it’s also entitled or it’s within scope of this user so that I can go ahead and access this resource. What does that really mean? Well, in today’s world, we typically have modularized authentication systems and authentication is probably the most mature component of open banking that I would throw out there today. Today’s world, legacy world, if you will, it’s hard for me to say legacy with today’s world, but each application has its own authentication. It’s all siloed. When we start getting into things such as SSO and Samael and we talked about course versus fine grained controls, more and more of that wants to be shifted towards that horizontal construct. We’re looking at, these firewalls, API gateway, API management, identity access management, integration, that’s kind of that front horizontal layer I’m talking about. Now, that also gives you an opportunity when you start talking about analytics. So if all of my traffic is going through one specific gateway, regardless of the resource on the backend, I’ve got some insights. Where is my traffic going? What is it hitting? Is fraud happening? I can throw myth AI on that, I can throw product management on that, too. What’s really getting used and what’s not getting used. It also allows me the promise of those green things, those core banking payments, whatever those are, those don’t have to live in the same space, nor do they have to be a part of this huge monolithic system. While it does give me flexibility with plug and play, it also gives you some elasticity, which is what cloud is promising. If I have more traffic here, I can expand and contract as I go. I’m really not messing around with all of that front end. There’s also a huge opportunity as it relates to on-boarding customers and going into things at that layer, which is going to promote more opportunities and more service that a bank can actually start and use to differentiate.
Joe Spatarella So Scott to be clear, the situation that most institutions are in today is really what you refer to as silos, really more of a decentralized provisioning of services where identity access management or user authentication is taking place at each service level. The entitlements have taken place at each service level. Even though you can have them come in through a portal or do some single sign on, it’s not really centralized. What you’re talking about is really being able to abstract the common things such as identity access management and potentially even entitlements, which would actually break down barriers and obstacles to a smoother on-boarding experience, wouldn’t it?
Scott Graf Right. I think a great example is something that probably all of us can really put our feet firmly on the ground, fraud, analytics. The implementation of fraud analytics at your bank or your financial institution. I have to deliver something. How many integrations did that take? How expensive was that? They will say, let me tie this into maybe something on my core, let me tie this into something on my payments platform, let me tie this into my cash management system. So now, suddenly all these different silos or proprietary systems, whether it was a batch process or whether they had to write something towards an API or whether that had to write towards its API and what not having the opportunity in that aspect oriented thing, that’s another great example of where these horizontal constructs can really bring down total cost of ownership and at the same time allow for more fluid integration and also arguably allow for a better integration or a better threat analytics.
Scarlett Sieber That was very helpful, thank you to both of you, this question is open to either of you and both of you really. For the executives in the room who are still trying to think about how to do this. What are some practical applications of open APIs? Is Joe or Scott, whoever wants to answer first can go ahead.
Scott Sieber Oh, gosh. I’ll just jump in on you. Some of the keys, when you talk about the open API integration and it does depend on the strategy, but, when you’re talking about I’ve got an initiative where I’m providing a common UI or UX, because that’s one goal that can be one. How do I add more? First of all, there’s the combining of those capabilities in that one common look and feel. That’s a journey, depending on where you are with that journey. But how am I going to go ahead and add new capabilities to that common UX UI theme? A lot of financial institutions probably on the larger side, they’ve got that middle-ware, they’ve got that infrastructure they have built out. They have single page applications running. Some financial institutions have their own proprietary APIs, representatives, restful type services. So that’s one opportunity. Another opportunity is as we get into a little more of the straight through processing, how well am I integrated into ERP TMS systems? I need something that is open and I need something that some of these treasury management systems and other platforms can tie directly into where it’s not going to take a whole lot of big fiddling and doing all sorts of things like that. We also have to keep in mind that, as our treasury management departments are shrinking, the same thing is happening for treasure departments at Caterpillar and Delta. Right. More and more that’s becoming more of a solution set that we’ve got to look at. The other piece is you may be targeting a specific strategic market. Maybe, what I’m doing is I need to look more into property management, because that’s where I’m going to differentiate or that’s where I’m going to play. So, by being able to leverage the open APIs, because we’ve been talking a lot about on the bank side, on the fintech vendor side, there are also APIs and standards that are sitting on vendor sides. Just to take property management or health care. Next generation. What can next generation provide me? How can I as a bank really go after that health care market and integrate tightly into those EHR systems or, Costar or Ayari even?
Joe Spatarella Thank you, Scott. I think there’s a couple of dimensions to this. One is, which you alluded to, Scott, which is user experience. How do you make it a more consistent, intuitive experience across a broader set of products and services? The second part is the ability to provision additional services, building out things beyond traditional management, treasury management, add trade services and foreign exchange and liquidity management, things of that nature without having to spend a staggering amount of money on the integration? In an open API environment, it would take less time, and I would presume, a whole lot less money and resources to make that happen. As we move into a more real-time environment in general, we’re facing some time compression and some limitation of resources. So I think, to use the extreme term from a survival standpoint, one institution has to operate in a highly efficient and effective manner and this makes it more of a friction-less process. There are those who believe that real time payments require a real time core, that’s not necessarily the case, it would certainly help, but there are a lot of things moving into a more real time model and this kind of an infrastructure is what would support that.
Scarlett Sieber So real quickly, I want to dive into some of the obstacles that we are facing here, but before we do that, we do have a question from the audience. So just let me read this really quickly. Someone told me I could acquire an infrastructure from vendors like AWS, MuleSoft, or 9th Wave. What are your thoughts there?
Scott Graf That would be challenging. When we talk about vendors like AWS. AWS is a cloud provider. While they do provide a level of infrastructure, AWS is obviously not focused directly on banking infrastructures and that’s one of the things that open banking does that we haven’t talked about is having that infrastructure and not having to setup all these different connections and all these other types of things. When we talk about cloud, everything being in the cloud, everything being connected, that is something that AWS can provide. There’s a lot of compliance around that. But from a raw, bare-bones resourcing type of the thing, and they do have some rhapsodizes on those themes, AWS is going to be able to provide that. Can they provide you open banking? No, they cannot. Mulesoft, 9th Wave, great organizations. These guys are sharp. I know a few of them. These guys are coming in and they’re helping financial institutions achieve and realize those API connectivity points, especially as it relates to things out in the marketplace, those fintech vendors, how can we get this all connected together by developing out a lot of these APIs that the banks have and kind of transforming those legacy systems into that API infrastructure? Is it a one stop shop where I can just go to one of these things and get the whole kit and caboodle? Unfortunately, no.
Joe Spatarella So basically, you can’t just go out to the store and buy it today.
Scott Graf That’s correct. Segwaying into some of those obstacles, what the challenge to the entire thing is today is all sorts of people potentially running out and building out their own infrastructures, building out their own APIs. It’s already happening and there’s interpretation of what it is. And then there’s also, of course, as you continue to promote and grow, did you put the right infrastructure in place and did you have that forward-looking vision and those types of things? There’s very limited advice. And I think, as we said from the beginning, technology and product typically sit out here in their own silos and that just can’t happen anymore because it’s got to be one fluid thing that’s moving forward. So that’s definitely going to be one of the challenges. But no, the market is definitely looking for an infrastructure of that type.
Joe Spatarella We’re lacking in banking standards at this point. There’s a lot of groups looking at it. NACHA has Finis, SWIFT, we’re seeing a proliferation device of 20022, there’s PSD2, something called BIAN in the UK. But these are all evolving so, we’re back in a situation with standards kind of lag behind the technology.
Scott Graf I would agree. Talking about infrastructures and the advice and the vision of where this is going, we’ve talked about APIs, we’ve talked about messaging, and we typically think about APIs and messaging but just to theme that out a little bit, talking about bache processes and file transfer protocol. That’s super legacy. Well, truly, when we’re talking about consuming those messages and consuming those APIs, we also need to think about technologies and referential things such as caucus streams. So it’s not just the fact that I’m doing messages point to point here and there, it’s also streaming data from one system to the next, which is extremely efficient if you have the infrastructure in place to consume what it is that you want to consume as that system versus letting it pass on down the chain.
Scarlett Sieber So really quickly, Joe, I’m curious from your perspective, of course, there are a lot of obstacles that people face, how are those obstacles different for a community bank versus some of the larger tier banks? How do those obstacles change?
Joe Spatarella A lot of it really depends, I think Scott alluded to this earlier, on the size of the institution, the amount of I.T. technology capabilities they have. Whether or not they’ve outsourced everything because there may be a dependency on a third party provider to help them meet those goals of open APIs or open banking. What kind of investment they’re willing to make, what kind of clients they serve. Again, standards are always going to be a challenge. And like anything else, they’ll be those that are in the first wave that are willing to be the innovators and take some risks and then there’ll be a second wave and a third wave. So the adoption will take some time. I think what’s going to really drive this, though, is the customers, the end users, particularly on the commercial side, because they’re looking for much tighter integration with their ERP and accounting systems. And again, as I think Scott describes, particularly in vertical industry markets. So I think that’s really going to push a number of institutions to start looking at this, not so much, in terms of how the bank or credit union operates, but their ability to share data and handle real time transaction processing with those clients.
Scarlett Sieber So now putting the bank CEO hat on, which I love to do, unfortunately haven’t been there, I’ve been the CIO and not the CEO. With the current climate that we’re all faced with, there are a lot of things on a bank CEO’s plate, which is not new, but definitely accelerated because of what’s happening. Scott, I would love to hear from you to start, as I’m trying to pitch this idea of open APIs and open API banking and the need for it for my board, what are the benefits of open APIs and API banking? If you were to give me a few key things, what would that look like so I can go talk to the rest of my exact team and the board?
Scott Graf Sure. I think the obvious one is future-proof. This is where it’s going. More and more we’re seeing everything go to the cloud. More and more we can take hints from other industries that have done complete transformations. It’s much more challenging for a bank because we’re all under this compliance, but of future proofing is definitely going to be one of those things. There’s a couple of things about future proofing, it’s not just this shift of infrastructure so that I can be cool and glamorous, it’s also because I need to stay relevant. I’ve got to be able to consume and deliver tomorrow’s financial solutions to my customer base. That’s the only way I stay relevant. More and more things are shifting, if they haven’t shifted already, in that direction. A lot of the other benefits, of course, is truly that customer experience. Today we’re stitched together with a lot of SSOs, it’s the bane of our existence. It’s not horrible but there are different looks and feels, there’s downtime, certificates change, more operational things so I’ve got to pull more people in to operate this. With all the price compression and everything else that’s happening and consolidation in the market, I’ve got to pull my costs down. So I need to be relevant for the future. I need to pull my costs down and I’ve got to improve my service to customers. So it’s so beneficial to leverage a lot of the infrastructure by which cloud can deliver today. I’m spending a lot of money on internal infrastructure, I’m spending a lot of time and resources making sure things stay up. While technology exists in a bank, bankers should be focused on banking and if that means that I have IT staff that can manage cloud based resources and I can shift a lot of that out to where there’s a ton of domain knowledge, not to mention the competition of getting those people hired on, that is going to benefit me immensely. So those are those are some of the benefits.
Scarlett Sieber Anything you would like to add Joe?
Joe Spatarella With the background of Covid-19 behind us here, remote banking has become something essential. It’s no longer a nice to have or something that just makes life a little easier, it is going to be required. In order to be able to deliver digital banking services, we’re going to have to have back offices and systems that are flexible, that are agile, and that can scale to a level of usage that I don’t think we’ve seen before. So I anticipate adoption rates of digital services are going to grow at a very, very fast rate and the infrastructures have to be able to support those things.
Scarlett Sieber Thank you for that, Joe. Scott, you started talking a little bit about the customer and that made me think of a few different things. One conversation I’ve gotten into with our banking clients, and just amongst my friends before, is some of the issues that could potentially arise from this concept of open banking and how specific banks tend to be on really “owning” that customer. Can you elaborate a little bit, Scott, on that issue of really who owns the customer as it relates to open banking and then more broadly some other issues that should be kind of top of mind for us?
Scott Graf Sure. As with anything that’s new, and this is big, open banking APIs, this is a paradigm shift brought about by cloud banking and brought about also by the fintech boom, more folks in the space delivering quality capabilities. It gets down to who owns the customer because we have gateways that are delegating to gateways and when we talk about that central repository, who owns the customer? Where does that account sit? How can I position myself where I’m in the pole position to push products and services out? How do I differentiate? That gets a little bit back into some of those architectures and infrastructure things we were talking about earlier where there’s not a one stop shop to just go buy that and that’s it and here we go. I think that’s going to be a huge struggle. The other piece is the openness of the open APIs and how common some of these things are, the standards piece of it. I do think differentiation is going to continue to occur in the fintech space because they have the budget, they’ve got the agility, everything else. I do think financial institutions are well-served to sit a little bit and watch it play out. There’s also opportunities for financial institutions now that can consume all of these things and plug and play and choose best of breed vendor. But at the same time, when we start talking about API gateways delegating to other gateways and you have these large financial institutions that are going to be promoting a lot of their products and services, it goes back to the correspondent banks with wires. Right. How many fingers are in the pie? Those are some of the issues and challenges that are that are going to present themselves to us. Going to the future, laying the groundwork, finding partners and advice, this is going to be a multiple year execution process. This is not a one and done. It’s an infrastructure. It’s a pattern. And it’s your strategy.
Joe Spatarella I certainly think that in terms of next steps, this is where CCG Catalyst Consulting can provide a technology assessment, help define a technology strategy and actually help identify and bring to the table fintechs that can successfully partner with financial institutions in order to reach the goals that they have and possibly reduce the time for market to to getting those things available for their customers. It’s some something certainly worth considering.
Scarlett Sieber Awesome. Well, thank you both. We are about out of time. I appreciate both of your time as we’re sitting here, there’s been a lot of questions coming in. So for those of you have asked questions, I tried to have the guys try to answer them in the chat as well. We will take let’s see here, if I’m looking at the clock, we probably have time for at least two. So let me go ahead and pull that out quickly. So we talked a little bit about resources and what that looks like for the smaller institutions so here’s a question from Steve. What kind of resources does it take to transform my IT infrastructure to open banking?
Scott Graf Multiple resources but yet combined. It definitely takes cloud infrastructure. That’s something you absolutely have to have in place. It also takes a merge in a visionary where you’re looking at combining product and technical capabilities to provide either the products and services you’re looking to provide to your customer base and also the products and services you’re looking to leverage on the on the vendor side. And what is really meant by that? We can talk about infrastructures and we can talk about APs all day long, that’s a means to still deliver quality products and services and differentiating products and services. So truly finding and combining those technical resources that are familiar with open or API technologies excuse me, along with cloud based resources and more modern product architects who can see and stitch together that vision from point A to point B.
Scarlett Sieber Got it. So I’ll use the next one I see a friend on here. That’s great. So hi, Susan. So Susan asks as I’m putting this together for my roadmap, how long will it take? Joe, maybe you want to take a first pass on this. As you think about putting this into your strategic roadmap and having a realistic time expectation, what would you say in terms of timing, Joe?
Joe Spatarella I think realistically, and obviously, every situation is going to be a bit different, but I would lay out a two to three year plan and look at how you can phase in those capabilities. Scott mentioned there has to be a cloud infrastructure available. There has to be some internal adjustments in terms of how development is done and the kinds of people you have and the backgrounds they have in order to perfect it. So this is the kind of thing that will evolve. It’s not a big bang, but I would say, twenty four to thirty six months should, with a good plan and a reasonable schedule, get you most of the way there depending on what the scope of the effort is.
Scarlett Sieber Anything you would add to that, Scott?
Scott Graf I would absolutely agree with those timelines. It has been something that hasn’t necessarily been terribly available up to now, because we also have to remember that, as we go on this journey, the cloud providers are evolving. New products and services are being presented in the market and potentially we could see in the next 18 to 24 months new providers that are providing more holistic type solutions like we’ve been talking about. So, yes, I do agree. And I also think that, in the midst of what we’re currently in right now, that once the dust settles, so to speak, that things will be different and that a lot of that opportunity and a lot of that need for more of this digitization will be something that should be in the forefront and I think that a good 24 months is probably aggressive. We’re probably talking and looking at a five year journey to get it from point A to point all the way to where I can pull it, plug and play best of breed products and capabilities into my infrastructure.
Scarlett Sieber Awesome. I think that is all the time that we have for now. For those of you that we did not get to your questions, have no fear. I have the list in front of me. I’m going to try to have the guys answer a few more and chat as we get off. But if not, we will email you afterwards with the answers. Scott as our special guest, thank you again. President of Prolific Banking. Really appreciate you joining us for this fascinating conversation. I certainly am an API enthusiast and there is a lot there that I did not know that you gave me exposure to, so I really appreciate that. We hope to have you back again for a future episode because this could be a novel so I’m sure there’s a lot more. Really appreciate the time, Scott. Joe, as always, thank you again for being part of this series. For all of you, if you are interested in discussing your API strategy further or exploring a technical assessment yourself to see where you are and how prepared you are for this, please let us know. As always, if there are other questions that you have, other ideas that you have that you think topics you want us to cover, we have the brain power over here and the expertise and we would love to try to give you as much relevant content to you as you see fit. Any other feedback? Please let us know. Again, if you look at the bottom of the screen, there are a ton of resources there for you. You will see links to a bunch of articles written around this, our website, and then some of those other resources that Joe alluded to earlier. You can contact us directly on social platforms or our emails. Until next time, we will be back with more great webcasts on commercial banking. I’ll be again joined by the incredible Joe Spatarella. Until next time, stay safe and we will see you soon. Thank you from the CCG Catalyst team.
Business Continuity: Unlocking Digital Commercial Banking Capabilities
Financial Brand Article: Is It Finally Time for Open Banking’s Debut in America?
Digital Dreams – Expanding Commercial Banking Capabilities
The Digital Ultimatum – A Catalyst for Change
Over the COVID Horizon, Mobile Banking Demands Strategic Clarity
Chief Strategy & Innovation Officer Scarlett Sieber is one of the world’s premier voices in financial services. She is among the industry’s most sought-after speakers as a thought leader and innovator with expertise in driving organizational change at both startups and enterprises across the financial services and fintech ecosystem. Scarlett has been invited to speak at over 100 prestigious financial services and technology conferences globally, including Money20/20, Finovate, South Summit, and NASA’s Cross Industry Innovation Summit.
Scarlett’s experience includes founding her own startup as well as working at banks such as BBVA, USAA, and Opus Bank. She is a leading fintech influencer, included on lists such as Top 100 Women in Fintech 2019 and Top 10 Fintech Influencers in the U.S. Scarlett also has deep experience in digital strategy and innovation implementation, making her a key asset to building cutting-edge programs for our clients.
Managing Director Joe Spatarella brings more than 30 years of experience in Commercial Banking, Treasury Management, Payments and Financial Technology. Joe has been, and continues to be, at the forefront of successful new digital banking strategies and products. He has a proven track record of leveraging emerging technologies and developing successful go-to-market strategies for financial institutions. Joe’s career started in bank operations and commercial product management. He has a multi-dimensional view of the business with a thorough understanding of sales, marketing, product, operations and technology components, along with the ability to communicate issues and opportunities with a clear, concise and forward-looking perspective.
Scott Graf is an experienced technologist with a demonstrated history of working in the financial services industry to develop innovative software solutions. Scott is a thought leader, offering national and international clients a high level of technical expertise, operational efficiencies and cost-reducing methodologies. His combination of business strategy with emerging technology allows him to design and implement innovative, customer-focused financial programs that drive down customer costs, increase functionality and improve usability.
Through constant research, examination and evaluation, he uncovers new ways to achieve the goals of small to large financial institutions. He ensures clients are equipped to meet the demands of a constantly evolving market place. A proven startup founder, Scott is a strong technology professional skilled in security, full stack development, technical operations and enterprise architecture. He brings an innate ability to listen closely to the needs of his clients and create tools that resolve business-critical challenges.