It’s not news that consumers are looking for the latest and greatest in digital and mobile technology in their everyday activities—including banking. To get what they want, these consumers are not averse to looking beyond traditional financial institutions to fintechs and other third-party providers.
Banks and credit unions are working hard to meet the same consumer demands, but they are often hobbled by inflexible, siloed legacy systems. That’s where open architecture comes in. Adopting an open architecture platform allows financial institutions to engage with third-party developers through open APIs. By doing so, they can offer cutting-edge products and services on demand, without spending a massive amount of time and money on development and support.
Customer Acquisition and Retention
Increasingly, consumers are selecting their financial services providers based on the quality of the provider’s digital banking experience. Banks and credit unions cannot afford to be behind the curve in digital technology. Open architecture allows them to offer best-of-breed applications that will attract new customers while preventing existing customers from straying to other providers’ apps or web sites. That way, customer interactions and cross-selling opportunities are not forfeited to the competition, and customers enjoy a robust, multi-functional banking experience through a single, integrated UI.
Speed, Flexibility, and Scalability
With an open architecture platform, financial institutions can scale up rapidly and bring innovative products to market quickly. They can customize their offerings without having to alter their back-end systems. Multiple service provider solutions can work together to deliver comprehensive solutions to financial institutions and consumers. Components of the open system can be added, upgraded, or swapped out with relative ease. Customers receive the latest and greatest products and services as they come to market, and financial institutions avoid “vendor lock,” in which they are trapped by long-term contracts with slow-to-innovate vendors.
Better Use of Resources
Technology is changing faster than many institutions can innovate. Developing, funding, implementing, and supporting the latest technology is not always a feasible option for banks and credit unions. With open architecture, these financial institutions can leave the heavy development lifting to fintechs and third-party developers while they focus on their core competencies—and thus use their resources more effectively and efficiently. The ever-changing demands of tech-savvy customers can be met with minimal effort and resources.
The Constellation Platform
One example of an open platform that enables financial institutions to bring the latest in digital banking to credit union members is Constellation, an open development platform that brings credit unions and fintech providers together in a secure, cloud-based “marketplace.” Constellation allows development partners to create new services, test them, and then submit them for certification upon completion. A few of the services certified through the platform include an AI chatbot, a loan rate comparison tool, a location-based ATM finder, and a home valuation tool. Constellation enables upper- to mid-tier credit unions and innovative application developers to provide safe, reliable, next-generation digital financial service experiences while still enjoying the freedom to compete and innovate in the financial services industry.
Bringing Customers the Best of Breed
Open architecture platforms are becoming critical to allowing financial institutions offer their customers best-of-breed digital banking services—online, via mobile device, or through traditional channels—by innovators whose sole focus is that product or service. By building API-enabled partnerships with top vendors, financial institutions can maximize the advantages of open development technology to deliver cutting-edge customer experiences that will keep them ahead of the competition.