Is your company working to develop or select a strong API (Application Program Interface) environment? If the answer is no, hustle quickly to remedy that problem. Over the past few weeks, MoneySummit has covered some of the benefits of re-orienting bank APIs towards Bank to Developer (B2D) and Banking as a Platform (BaaP) models. This week’s API focus: How can your company balance API speed to market with data security considerations?
For decades, banks have been located at the center of communities. Go to any town or city and most likely you will find a common space with a religious building, a government building, and a bank smack dab in the middle. The advent of the (Internet-connected) smartphone changed this organization and shifted the hub of community activities to wherever anyone happened to be online. Most banks responded to this shift by offering traditional products and services online, hoping that their offerings would generate revenue and preserve relevance as a central institution. However, as online competition grew, service fees and revenues eroded leaving banks in a difficult position on the periphery.
In recent weeks, the banking chickens have come home to roost. The leaders of two of the world’s largest banks, Wells Fargo and Deutsche Bank, are staring deeply into the abyss – probably wondering how things got so far off course. The answers seem pretty clear. A lack of transparency, poor management, and complex fraud caused customer revolt, regulatory penalties, and massive stock devaluations.
Wells Fargo Scandal Means Renewed Scrutiny Of Big Banks
Lucinda Shen of Fortune writes that the Wells Fargo scandal "could again force regulators to take a deeper look at bank culture. Banks have been increasingly pressured to widen profit margins despite low interest rates and heavier regulation since the financial crisis ... Advocacy groups have also noted aggressive sales tactics, similar to those that led Wells employees to create fake accounts" at other financial institutions.
Mobile Deposit Key To Customer Satisfaction, Wells Fargo Enters Damage Control Mode: Essential Fintech Reading Sept 10-16
Wells Fargo Attempts To Repair Image, Regulator Highlights Risks Of Cross-Selling
The LA Times reports that Wells Fargo will eliminate all sales goals for credit cards, checking accounts and other retail banking products as the bank tries to repair its image. The U.S. Comptroller of the Currency, Thomas Curry, said on Thursday that other banks should review what risks arise from efforts to cross-sell to existing customers. Curry's office was among the regulators with whom Wells Fargo reached a $190 million settlement last week, following claims that it had created two million accounts that customers did not want.