By Mario Hernández, Founder and CEO
To reiterate on a reoccurring theme, collaboration between FinTech companies and the creation of APIs (Application Program Interface) to accelerate the growth of our industry remains very important for success. Large software companies have achieved impressive growth with open systems that allow many developers to work together.
For example, Google opened its speech recognition API to third-party developers last year at no charge during the launch period to attract early adopters, and continues to offer the API for development for a monthly fee with pricing tiers based on total amount of audio processed.
Even Apple, a company that has been widely criticized for being a closed system, which has amassed over a million Apps in their App Store, could not have done without launching the Apple Developer Program platform.
Recently, Visa and Mastercard have announced the release of a series of Apps that allow card issuers, merchants and payment processors to interact and create tools that benefit the ecosystem and evolve the industry. Nimble FinTech companies have leveraged these opportunities to access open APIs for product development.
FinTech companies and large financial institutions are dependent on coopetition, a concept first coined in the early 1900s, that remains equally relevant today. When banks leverage their strengths, and cooperate openly with FinTech companies, products go to market faster. Working together with FinTech developers, banks can reposition themselves as innovative companies that focus on providing customers with more convenient, secure and expanded services.
However, the process of integrating systems between FinTech companies and banks remains complex, and this is where the APIs are key in streamlining solutions. Some banks have already taken the first steps towards market leadership. In March of 2016, Spanish bank BBVA released the alpha version of its API Library, which continues to expand. Now, over 1,500 developers have registered for platform access. This strategic move by BBVA opens the door for thousands of developers to create tools on the BBVA platform. The result will better serve customers and build the BBVA brand as an innovator.
This strategic move by BBVA will give the industry lots to talk about. I think this move will provide an amazing growth and competitive advantage to this already very big bank. Will other banks follow? I believe they should.