Building Better Bank-Fintech Partnerships

Hi there, and thanks for reading The Bottom Line, our monthly newsletter covering news and trends for financial executives!

In This Issue:

• How APIs Are Transforming Banking Technology
• How to Build Better Bank-Fintech Partnerships: And why they're key to the future of local banks
• BaaS and FaaS: What's behind the market expansion of Banking as a Service and Fintech as a Service?
• Retail Banking Tech Trends Report: 384 bank and CU execs told us their top 2023 priorities, investments, and more.
• The Fintech Triple-Threat

Application programming interfaces (APIs) have already changed the way financial institutions operate technologically and will continue to influence the evolution of the financial services industry. APIs enable the integration of an increasing array of internal and external banking systems, applications, data, strategies and activities. The development and increasing importance of digital banking to consumers, financial institutions and financial technology suppliers revolves around the emergence of open banking and even more broadly, open finance systems — strongly supported by APIs.

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Fintechs draw the ire of many bankers, but building better partnerships with them will be key for the future of financial institutions. “Traditionally, banks have purchased software from a vendor,” said Kris Bishop, CEO of Fintegrate Technology. “That’s what it is —it’s not a partnership.”

Building fintech partnerships can be an effective way to get ahead and stay ahead in the rapidly changing financial services landscape. Whether it be working more closely with vendors, investing in a fintech company or even building a wholly owned subsidiary, as at least one major regional bank has done, a number of financial institutions and fintechs have found success in that arena and are blazing a path toward a stronger industry.

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The increasing demand for the digitization of financial services and the accessibility provided by application programming interfaces has helped propel the market expansion of banking as a service (BaaS) and the related fintech-as-a-service (FaaS). These invaluable cloud-based tech products and services provide software, business, infrastructure, and banking platforms, all empowered by APIs.

In the current financial services ecosphere, cloud-based computing for everyday banking operations has become a technological enabler. Allied Market Research maintained the global banking-as-a-service market generated $2.41 billion in 2020, and projects it to reach $11.34 billion by 2030.

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New data from 384 financial executives sheds light on banks' and credit unions' top 2023 priorities, digital and technology investments, budgets, staffing models, and more. The analysis includes over 44 pages of insights.

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Did you hear our big news? It's the fintech triple-threat! NXTsoft and CFM are excited to announce that we have partnered with IMM to provide API connectivity, workflow automation, and data analytics software to over 2,500 banks and credit unions.

Read all about it here!