OBSERVATIONS FROM THE FINTECH SNARK TANK
In the movie All The President’s Men, Woodward and Bernstein meet their informant in a parking garage who tells them: “Follow the money.”
If you want to know which technologies are hot in banking, you should do the same. The truly “hot” technologies in banking are the ones that financial institutions invest in—not necessarily the ones the pundits talk about.
At the end of the past seven years, Cornerstone Advisors has surveyed financial institutions to find out where their technology dollars will go in the coming year.
The Hottest Technologies in Banking
In Cornerstone’s What’s Going On in Banking 2021 study, the top five technologies for 2021 are: 1) Digital account opening; 2) Application programming interfaces (APIs); 3) Video collaboration; 4) P2P payments; and 5) Cloud computing.
1) Digital Account Opening
Consumer digital accounting opening is the most popular technology for the fourth year in a row—with banks (finally) leading the way here.
For both the retail and commercial sides of the coin, the pandemic helped shake up some long-held beliefs about the primacy of the branch—especially among bank (vs. credit union) executives—when it comes to new account opening.
Nearly half—44%—of banks and a quarter of credit unions expect to add a new or replacement consumer digital account opening system in 2021.
It’s unlikely that that many banks will actually go through with these plans this year, but a third of banks and credit unions have deployed a new consumer digital account opening system in the past three years.
Commercial digital account opening systems (for corporations and small businesses) will get a boost this year as well, as 30% of banks anticipate choosing a new system this year, up from 22% in 2020.
This shouldn’t come as a surprise. According to Cornerstone Advisors partner Quintin Sykes, “the commercial account opening and onboarding experience is one of the biggest pain points remaining in the digital experience.”
Commercial digital account opening systems are gaining in popularity among credit unions, as well. One in 10 credit unions plan to implement a new commercial account opening system in 2021—twice the number that has done so in the past three years.
2) Application Programming Interfaces (APIs)
APIs jumps from the #5 spot last year to #2 on the list for 20201, with roughly one in four institutions planning new investments.
About half of credit unions have developed or invested in APIs prior to this year, and banks are finally catching up. Going into 2021, only 30% of banks had deployed APIs, but that’s up from the 21% that had done so going into 2020.
What are they hoping to accomplish? Back in 2015, I wrote:
“APIs are about speed, agility, and personalization. You’e dead in the water if: 1) It takes nine to 12 months to integrate partners’ products and/or data, or 2)…
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