If there is one thing financial institutions are focused on in 2023, it’s digital modernization. With heavy competition, banks can no longer sit on the sidelines of the technology game.
According to Cornerstone Advisors’ 2023 What’s Going On In Banking report, 76% of banks and 87% of credit unions had launched a digital transformation strategy or initiative by the start of 2023. And 18% of banks expect to develop a digital strategy within 2023.
With banks taking giant leaps into the digital modernization arena, fintechs need to prepare to serve this growing customer base.
How can Mesh help both banks and fintechs win the digital modernization game? Let’s dig into digital modernization for community banks and for fintechs.
Evolving Banking Landscape
If you work for a bank, then you already know the importance of digital modernization and transforming your technology to keep up with competition. Community banks need a way to innovate and adapt in the banking industry in order to give their customers the digital experience they want and expect. The technology exists, but banks need a seamless way to incorporate these tools into their unique business operations. Core providers that offer a one-size-fits-all solution only make working with third-party vendors more challenging for banks.
As a fintech, you recognize the demand for your products is high, and time is of the essence to get new clients using your tools. Banks want to use your solutions, but it has become a burden to build integrations to each client’s core. Your team needs to focus on building your product and not on integrating new clients.
Unfortunately for both banks and fintechs, there are lots of ways digital modernization can go wrong, and the most significant way is through poor integrations. The lack of proper connectivity standards leads to data silos and poor data accessibility, which limits the experience of digital users.
Why Banks and Fintechs Need Integration Layers for Successful Digital Modernization
To overcome data silos and lack of accessibility, banks and fintechs need to prioritize the integration process. Mesh allows banks to easily connect with third-party products to offer tools that meet the end-users’ needs and wants. For fintechs, they can seamlessly access a bank’s core to provide the information a bank needs to satisfy its customers.
Joel Legg, vice president of technology at Core10, gives an example of how that happens:
“Imagine you’re using a family wallet app to manage your child’s spending habits. If your digital wallet is connected to your bank, you can make transfers from your account to your child’s account as an allowance. And because your family wallet app is directly connected to the banking core, you’ll be able to track and manage everything from your standard online banking portal without having to transfer funds in and out of the app provider’s operational account. Your money can finally stay in one trusted place, with your banking provider.”
For the bank, they can go back to their core as the system of truth to see all their transactions from that digital wallet and create reports of that information.
For the fintech, they’re able to offer the solution to more banks through core connections to grow their customer base and revenue.
Mesh as a Digital Modernization Solution for Banks and Fintechs
Mesh is a solution built for banks and fintechs, but it solves two different problems. Here’s a table that helps breakdown how Mesh serves both organizations.
Mesh for Banks
Mesh for Fintechs
Mesh connects to a bank’s core and creates a seamless pathway where third-party partners can connect.
Mesh is a single way for fintechs to connect to all the banking cores they need access to.
Mesh can connect banks to third-party partners like their payments provider, online banking provider, loan and origination provider, etc.
Mesh for fintechs prioritizes connecting to the banking cores through a single open API instead of the legacy point-to-point model.
Mesh allows banks to connect everything through one source instead of a different point-to-point connection for each third party.
Each third party has slightly different documentation and different data models. Because Mesh normalizes and standardizes this information, it becomes much easier to add new fintech partners.
Mesh also allows fintechs to integrate with other solutions beyond banking cores, if needed. These could be payment providers, card management platforms, or other banking services.
Mesh allows banks to focus on creating a cohesive solution through an integration layer and then opens opportunities to extend the platform to data lakes, reporting, and analytics.
Mesh Solutions for Banks
Banks that are in the process of digital modernization are collecting a significant amount of information. Mesh collects all the data and allows banks to analyze and take action by visualizing the information together.
Mesh solutions for banks include:
Branded documentation portal.
Event-driven, microservices-based architecture.
Ability to add data engineering solutions.
And the best part? Mesh is not a one-size-fits-all solution.
“Every bank has different integrations, solutions, and partners. We’re able to tailor the solution to fit their needs and allow them to own the solution. If something happens to Core10 or their business, they have business continuity and peace of mind knowing they own their set of integrations.” —Joel Legg, Vice President of Technology at Core10
Mesh Solutions for Fintechs
Core integrations, like Mesh, allow fintechs to work with banks and help them scale their solution.
Mesh solutions for fintechs include:
One-to-many core connectivity.
Event-driven, microservices-based architecture.
While other core connection options exist, Mesh offers two significant benefits over the competition.
Mesh is built on the FDX data model. Currently, the FDX data model is the industry standard for normalizing information. There is a general consensus from financial services stakeholders that the FDX model is the best way to build and implement an API solution that will help consumers access their financial data.
Mesh offers open APIs. With open APIs, it is easy for fintechs to access what Mesh offers and decide if it is a good fit for their product before they get too far down the sales funnel. Rather than wasting time on sales calls or reading through pages of information on the website, fintechs know early on if this is the right solution for them, and they can stay focused on their client and financial customers.
In the end, Mesh solutions are all about creating an easy and convenient banking experience for the end-user. Think of it this way:
“As a homeowner, you have multiple companies that provide services to your home: utilities, water, electricity, homeowners insurance, etc. You have to pay each one of these companies individually to take care of your home.
But, if you had one place to go to take care of these items, it becomes much easier to not only manage your finances, but to see the full picture of how each entity is impacting your financial health.” —Joel Legg, Vice President of Technology at Core10
Mesh connects banking and core integrations with one seamless and easy-to-maintain layer. If your bank or fintech needs a solution to keep up with digital modernization, let’s talk. Schedule a call with a Mesh solutions expert today.