The Financial Brand
Core Issue: Plug-and-Play Is Transformative for Banks & Credit Unions
By W.B. King
In an increasingly digital-first world, three pivotal words — plug-and-play — are redefining how core providers and fintechs approach providing services for banks and credit unions.
Most core providers are viewing fintech partnerships in a new light, says Sabeh Samaha, chief executive officer of the technology consulting firm Samaha & Associates in Miami Beach.
“For many years, the oligarchs wanted banks and credit unions to be dependent on them,” he says of the core providers. So the robust application programming interfaces, or APIs, necessary to integrate outside technology from the likes of fintechs were rare or nonexistent. But, over the last few years, core providers have added APIs and focused more on interoperability.
“Finally, there has been good evolution in most areas,” says Samaha, who has overseen credit union and bank core conversions and tech stack implementations for nearly 25 years. “The posture has gone from defensive to a much more open, liberal approach from core providers. They are no longer competing with third parties but are looking to work with them.”
The upside is that it is often possible to tack on new functionality without having to overhaul or replace a core system. This clears away a costly hurdle that, for many years, had made fintech initiatives prohibitive and frustrated banking executives.
Samaha adds that many banks and credit unions have been migrating to the core providers that offer this type of open architecture, including Fiserv and its DNA solution and Corelation and its Keystone offering.
“Our clients are converting away from cores that do not offer plug-and-play options and are converting to those core platforms that do,” he says. “There is no trend or evidence where closed operating systems are popular.”
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