The disruptive forces of technology and legislation are forcing banks to become open and collaborative, things which they historically found challenging.
A friend who owns a small business recently went through what I call a “connected and choreographed” experience to get a loan. iWoka, a digital lending company, simply asked him to log on to his PayPal and Xero (accounting software) accounts and connect his bank feeds. This enabled them to quickly establish his credit worthiness and offer a loan. After accepting the loan via email, the money was transferred to his account and Xero automatically reflected the loan in his company’s balance sheet. This all happened in under an hour. Contrast this with a traditional bank’s lengthy and often cumbersome process, which requires a detailed business case upfront that can take weeks to put together.
How was iWoka able to do it? Through so-called application programming interfaces, better known as APIs. Put simply, APIs allow developers to build systems that talk to each other. This results in a connected experience that enables customers to use a range of financial services in new and exciting ways. By building open platforms and embracing collaboration, fintech companies are “bundling up” to compete with banks on more fronts.
Sourced through Scoop.it from: www.bankingtech.com