Thoughts on the Banking Crisis Canary: Ron Shevlin’s Observations on July 17th The Banking Crisis Has Only Just Begun
I’ve been reflecting on Ron’s recent Forbes article - (and thank you for the call out for Sandbox Banking!) and see true advantage for our company and others who are focused on improving and enabling banking infrastructure.
In looking at the five elements of the banking crisis cited, I see many ways banks, and partner fintechs are currently engaged on these fronts.
Checking accounts - as banks are looking for ways to increase deposits - the ability to move structured and unstructured data, share data in real-time and trigger multiple account creations at a lower cost through API integration is no longer just a game changer, but is table stakes for any product development.
Zombie Cores - while core modernization DOES take multiple years and conversion may be a dirty word in operations teams, having the ability to move data to more nimble platforms for specific services or products (eg: marine or specialty vehicle lending) through API platforms - Banks can lower their risk and dependencies on their cores and engage in a longer strategy horizon as suggested.
People shortage - this is very interesting and on point, I really like the observation about IT teams changing in terms of skills needed from builder to vendor manager to integrators - Platforms like Sandbox Banking’s GLYUE are focused on providing the pathways to do this eg: by being multi-player software. By leveraging developer docs like readme portals, and sandboxes to test, the foundational blocks are in place for building nextgen applications. Glyue incorporates AI for coding co-pilots to fill that skill gap but we can forsee a world where all banking users have their own AI bots interacting with our customers’ systems.
And don’t forget security expertise! In the world of cloud-native APIs meeting hybrid infrastructure while carrying PII, it’s another level of considerations that require the ability to navigate, monitor and obfuscate data in both the most granular and summary levels. There are a lot of changes for banks (removal of walls figuratively and literally), so middleware and integration platforms can meet the banks where they are today with specific integrations, and grow with them to be broader iPaaS opportunities that are configured to their specific workflows.
The creative imperative - as banks not only unbundle and re-bundle product offerings but leapfrog the competition with new products, they won’t be built internally - the importance of connectivity to multiple partners and data movement is only growing. Products like Glyue seek to build networks so that fintechs and banks can both maintain high product velocity.
Political Element - It is very true that we will see banking regulation focus and change given the recent crisis and due to the many other issues facing us economically, the importance of the ability for banks to adapt will increase. The journey from builder to vendor manager to integrator will continue.
As Ron alluded to, with the Carpenters song reference in his title: When it comes to addressing the crisis, “We’ve only just begun”.