We’ve added “-aaS” (“as a Service”) to so many functions and products, from Software to Platforms to Backend (there’s some joke to be made here, but I’ll refrain…). If you started building products or services in the last few years (like me), you might take for granted that you don’t have to reinvent the wheel every time you want to access basic infrastructure and functionality; you probably rely on Amazon Web Services for hosting, and use a CRM in the cloud to keep track of your customers.
But when it comes to financial services, building products and services is still largely on-premise, and most product managers and developers are reinventing the wheel.
Let’s say you have a great idea for a new savings app based on behavioral economics. To build an minimum viable product (MVP) and get your first 100 users on it, you’ll have to have a mechanism to move money and you’ll have to be compliant with KYC and AML regulations. Neither are easy tasks, and neither one is core to your product or competitive advantage. They’re simply table stakes for getting off the ground.
APIs are the way to make viable financial ecosystems and the key to making Financial-Services-as-a-Service possible. A variety of well-designed, easy-to-integrate APIs will let you launch faster while staying focused on your product and customers. You may integrate Plaid, Dwolla, Twilio, or some combination of the three. Think of the developer hours you’re saving by not building those functions yourself.
On the other side, big financial services companies are also getting into APIs, and for good reason. They don’t just want to use the services, they want to be the platforms upon which those services are built and distributed…[read more]
This was originally published on Medium.
This is a preview of “Banks Shouldn't Reinvent the Wheel”. You can read the full post here by visiting Techstars.