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When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manag
by Johnie 11y ago
When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction.
RobinHood's model[1] is pretty interesting in this respect. They are managing the highly regulated part of stock trading and letting API clients deal with the customer experience. This enable trading to be done from any number of apps that consumers are using without those app developers from having to deal with the regulated investment management component.
This is the model that banks should adopt. Unfortunately, it will take incumbent a long time to come around to this.
I've written about opening up bank data here: https://www.linkedin.com/pulse/let-my-financial-data-free-johnie-lee https://www.linkedin.com/pulse/let-my-financial-data-free-jo...
[1] http://www.financemagnates.com/fintech/investing/robinhood-goes-open-with-openfolio-quantopian-stocktwits-and-rubicoin-integration/ http://www.financemagnates.com/fintech/investing/robinhood-g...
- toomuchtodo 11y ago> When are US banks going to come around to open banking? They need to come around to the model where they provide the infrastructure and let third parties manage the customer interaction. When they have an incentive to. No one is going to change their business unless financially incentivized to do so. To your other point, you can use Bancorp bank if you want to build a tech platform on top of a real bank. That's how BankSimple (now just Simple.com) built their platform.
- Animats 11y ago"Let third parties manage the customer interaction." Bad idea. Dealing directly with a regulated bank, you know who to blame and have more legal protections. With some third-party intermediary, who pays for fraud? App developers will try to wiggle out of taking any responsibility. PayPal and WePay, for example, have routinely done that. Read "simple.com"'s user contract.[1] [1] https://www.simple.com/policies/bancorp-account-agreement https://www.simple.com/policies/bancorp-account-agreement
- toomuchtodo 11y ago+1. APIs have created this false confidence that every action is an API call away, until you run up against real-life, necessary regulations (financial, life safety, etc).
- jackgavigan 11y ago> Bad idea. Dealing directly with a regulated bank, you know who to blame... This is definitely a key factor. As I mentioned in the blog post, when the customer is using technology provided by the bank, determining who is liable for any losses is relatively straightforward. When you start adding third parties to the mix, it becomes more complicated. If a customer downloads a snazzy-looking banking app built by criminals who then use their credentials to empty their bank account, who is liable?
- Johnie 11y agoAPI banking and third party apps is already happening in Germany and Europe. Look at Fidor Bank and Mondo Bank. It's not like anyone can get access to the API. The marketplace/app store and access to the API can be controlled. https://developer.fidor.de/ https://developer.fidor.de/ https://getmondo.co.uk/docs/ https://getmondo.co.uk/docs/
- yo-code-sucks 11y agoThay are called credit unions, the major players are DigitalInsight(Services) -> acquired from Intuit by NCR and FIServ(Data Storage). They are both slow moving beasts, but because of regulations in the US nothing will ever change.
- tdaltonc 11y agoNo one wants to be dumb pipes.
- deleted 11y ago[deleted]
- patio11 11y agoRobinHood actually uses Apex Clearing Corporation on the backend, which you'll find is true of a lot of tech-forward retail-facing brokerage. (Other examples include OptionsHouse, TradeMonster, etc.) This is an optimization which reduces, but certainly does not eliminate, the red tape that the brokerage has to deal with.