The team at Financial Advisor & FintekNews are pleased to offer our readers our “3 Questions” column, where we chat with a thought leader within a unique sector of fintech and ask them to answer three questions about their company. We recently spoke with Abhishek Gupta, CEO of BBVA Open Platform.

NAME: Abhishek Gupta
COMPANY: BBVA Open Platform

1.What does your firm do/offer within the fintech sector?

BBVA Open Platform is reimagining how companies access the world’s banking infrastructure by offering one of the first open development platforms for core banking and payment services in the U.S.

Our Banking-as-a-Service solution is API-driven and gives third parties the ability to offer their customers payments and banking services as a seamless and integrated part of their existing user interface. This is unique because it enables companies to serve their customers regardless of whether or not they are existing BBVA customers.   

Open Platform’s Identity Verification, Move Money, Account Origination and Card Issuance services can be white labeled for companies from seed to enterprise.

Digit, Modo, Simple and Azlo are a few of our customers that you’ve likely heard of. Digit operates the flow of funds for Digit Pay, a solution to let Digit’s customers make automatic payments toward their credit cards with money saved in Digit by using Open Platform’s APIs. Azlo used Open Platform’s technology to develop an online, end-to-end banking service for the new generation of digital entrepreneurs. We also support customers in the aviation, freelancer and student debt relief spaces, to name a few. We’ll be announcing more about these relationships soon.

2. What do you believe the next major innovation in financial technology will be and why?

Innovation in financial technology isn’t limited to personal finance and investment apps or neobanks, it’s relevant to any business that deals with money in some part of its operations. There’s a lot of buzz now around providing companies access to the data of existing bank customers. The next stage in financial technology, and one that we’re already seeing the most innovative companies move into, will be embedding banking services across industries.

Banking-as-a-Service is set to becoming a powerful vehicle for innovation by enabling companies to infuse banking services into experiences beyond financial services from marketplaces like TaskRabbit to real estate and property management applications like OpenDoor and Tenant Cloud.

Giving these applications access to a bank’s infrastructure allows them to provide a service that the bank doesn’t offer to customers outside of the bank’s existing footprint, all under their own brand. An example is an API that can be integrated into a third-party app so it can open bank accounts for their customers, like the services Simple and Azlo provide.

At its core Banking-as-a-Service means providing companies access to core banking functionality, as opposed to simply the data of existing bank customers. In technical terms, this means providing APIs that allow third parties to write data to the bank’s core, not just read data from the core.

3. What are the biggest problems facing the fintech industry in the future?

Historically, building services with financial dependencies meant dealing with painful manual bank processes and navigating a complex sea of regulations. However, in today’s on-demand, highly personalized and customer-centric world, every company needs to be a fintech to compete.

BaaS brings banking into the 21st century. By providing companies a unified development platform with reliable, easy-to-integrate APIs, innovators now have the ability to seamlessly incorporate financial transactions into their products and create next-generation user experiences.

The other challenge fintechs face is the need to continuously innovate to grow and stave off competition from other startups and new entrants to the banking market, including neobanks and big tech companies. BaaS not only creates more integrated experiences to win over customers, but it also opens up new opportunities for fintechs and companies to diversify their business lines and create a competitive edge by generating new revenue streams.

Debit cards (linked to bank accounts) are typically the first crossover product offered. And once a customer starts depositing their money, the introduction of new products is a seamless process. This “API-fication” of banking is driving many exciting new products: digital account opening platforms, tools to streamline loans and payments . . . the possibilities are endless.

It becomes a win-win-win for the company, customer and the bank.