Banks turn to fintechs for middleware technology
Data transfers have become a core practice in digital banking
Choice Bank is leveraging fintech partnerships in order to format and move information between datasets using middleware technology and APIs.
The ability for a bank to expand its digital footprint while managing back-end processes is paramount and has become simpler and less costly through the use of APIs and middleware — a type of software that provides services to apps beyond those available from the operating system, Tim Heilman, chief innovation officer at $3 billion Fargo, N.D.-based Choice Bank, said during FinXtTech’s recent “Application Programming Interface” webinar.
Many financial institutions are now looking for partnerships with fintechs that utilize middleware, Heilman said.
“Fintech partnerships, banking-as-a-service, it’s really the foundation of what everything is built on now,” he said. “To do that, you have to be able to move data from one set to another and be able to format the data and move it effortlessly between datasets.
“Once we started realizing that we have the ability to do that, it really starts opening the doors to other opportunities that you’ve never had to begin with,” Heilman said.
Driving a ‘digitization strategy’
APIs and middleware facilitate data transfers, which has become a core practice in the digital banking industry, Nikhil Lakhanpal, co-founder of digital banking platform Narmi, said during the webinar.
“You need to partner with technology partners who actually have open architecture [and] have demonstrated that the term ‘open API’ actually means something and is not just marketing material,.” Lakhanpal said.
The use of APIs can allow banks to “drive a digitization strategy,” said David Wexler, chief executive of software developer ModusBox. Implementation gives financial institutions access to a host of tools that previously may have taken significant time to integrate, he said.
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