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While banks are aiming to innovate, to take up API-driven strategies, not all are totally prepared for the transformation.

IBS Intelligence spoke to Fabian Vandenreydt, executive chairman at B-Hive, about the open banking “revolution” that appears to be taking financial instructions by storm. But is this new innovative strategy one coming from the entire bank, or just an eager few technologists?

“It depends on the size of the bank and the number of product lines they have,” said Vandenreydt. “If you are very niche and have a limited number of integrated lines you can innovate faster. If you take a large corporation, in theory they have ore capital to inject into innovation but they’re also more siloed.”

Most of the time innovation is aimed at the customer, added the B-Hive chairman, but to be efficient that innovation needs to spread into the middle and back office. “It’s happening. You see more B2B fintechs getting involved in revamping back offices. But I have the impression that in certain large institutions it might remain a bit patchy.”

This isn’t a criticism, Vandenreydt is keen to point out. It’s just “the way things go” and it’s not easy to change a bank from front to back in a few years, especially from a core banking perspective. “A core banking system is a core banking system. Even if you make it very modular it’s about making all those components talking to each other.”

In banks today, he added, you don’t just need bankers, you need people who can deal with innovation and very good architects that can put all that together. The strengths of some of the larger tech platforms – like Amazon –  is that “they always see themselves as a platform”. “They can add new services in a seamless way. Banks, said Vandenreydt, are trying their best to move in that direction.

by Alex Hamilton
Alex is Senior Reporter at IBS Intelligence, follow him on Twitter or contact him at: alexanderh@ibsintelligence.com