The Power of the Platform

The Power of the Platform

No, this isn’t a political blog piece – there are plenty of those lately!  The platform I am referring to is a technology platform – one that provides a readily available, well documented, and robust API that allows bi-lateral integration with other applications.

Creating value through integrations.

I’ve had the fortune of working for two companies in the past, Intuit and Salesforce, who have embraced the power of the platform, allowing others to integrate with their solutions to make them better and, conversely, integrating with other solutions or services to add even more value to their own applications. A familiar example is apps that are developed for mobile phones.  If Apple had only allowed apps of their own creation to be offered in their App Store, would the iPhone be as indispensable to consumers as it is today? Platforms allow for sharing work done by others, which creates value tenfold over what just one company can do.

Platforms will continue to grow and will ultimately dominate the landscape for software solutions.  Here are two compelling reasons why platforms for financial institutions are ideal:

1. Forces everyone to bring their A-game.

Salesforce and Intuit are confident that they have the best products and continue to improve upon them.  They are both committed to serving their customers with the best solutions – even if that may open the door to a competitor. They realize they can’t be everything to everyone and so having developers create solutions that improve and enhance theirs speaks to the old adage of “rising waters float all boats”.  If you want evidence of how beneficial this has been to each company’s bottom line, just take a look at the stock performances of Intuit and Salesforce over the past 5 years if not longer.  And for the developers?  There are many examples of companies who have created multi-million dollar businesses building a solution on a platform like that of Salesforce or Intuit (ex: Veeva).

2. Faster and more efficient innovation.

I think everyone would agree that the pace of innovation is only increasing – and much of that innovation is rooted in mobile.  The ability to innovate quickly is something that old technology simply wasn’t built for.  Using APIs to build an application on top of a platform that already has the necessary base infrastructure needed by every software application eliminates a big chunk of development that doesn’t solve a problem.  Instead, developers can focus their resources on creating functionality that adds value.

The financial services industry and the providers who serve them have been slow in embracing the idea of open platforms. Core or back-end systems tend to be closed environments – protected as if each can survive on their own or enough companies can be bought to “safely” integrate with the parent to offer additional solutions (how well has that worked?).

The Financial Brand talks about Banking as a Platform (BaaP) and how we are on the verge of a massive mindset shift for the financial industry, but one that would come with incredible value to everyone involved. FinTech is rife with companies eager to integrate with other providers and each other as appropriate.