A common dilemma in financial services is between in-house building a banking or payments system or buying it ready to use. This debate no longer makes sense for Daniela Binatti, Co-Founder and CTO at Pismo. She discussed the topic during a presentation in the AWS booth at Febraban Tech 2022, which takes place this week in São Paulo, Brazil.
A quick way to launch a new business or replace ageing software in financial services is to buy a banking or payment processing system. “But this option doesn’t allow the financial institution to differentiate itself from the competitors. When the company needs a new feature, it must ask the software provider to include this feature in its backlog. And the requested feature may not be a priority for the supplier,” says Daniela.
Building a banking system from scratch allows a company to create exclusive financial products. However, it is a complex task that may require a lot of time and money. “This industry is based on old standards, such as ISO 8583, from 1987. It must also comply with card network mandates and government regulations. It’s a lot of things for the financial institution to take care of,” says Daniela.
For Daniela, the most rational approach is to build the system employing ready-to-use components, like the ones Pismo offers on its platform for banking and payments. “We supply primitive APIs that our clients can orchestrate to develop the financial products their customers need. These APIs do all the basic operations required to implement a variety of financial services.”
When using primitive APIs, clients take care of the user interface. So they can offer exclusive experiences to their customers. “We also provide APIs that we orchestrate and white-label front-end apps. They are a more straightforward way to build financial products.”
Developing with APIs has many advantages compared to the other approaches. The financial institution can innovate by creating exclusive products quickly. And it doesn’t have to worry about all the complexities below the hood – we take care of them.