NXTsoft: Why Banks That Embrace Digital Will Do Well in the US – and Beyond

https://thefintechtimes.com/nxtsoft-why-banks-that-embrace-digital-will-do-well-in-the-us-and-beyond/
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In the history of US banking, the Big Core providers have predominantly had control. But in the age of open banking, difficulties in third-party providers making connections to archaic systems have stifled progress.

For David Brasfield, CEO of NXTsoft, that’s where he comes in. The company currently services over 2,900 customers, comprising over 1500 financial institutions and over 1,400 SMBs.

He said, “We’re a real-time connector. Meaning that the data gets processed in real-time, it’s not done at night. We are the connector that can actually open the door, let the drawbridge down and connect them to the core system.”

“We have about a third of the banks in the US market that use our connectors to connect their core system to another Fintech. But since we’re an API we’re that middle piece, which makes it hard to show clients what we can offer. Yes, we can tell them what we do but it’s difficult to demo it. The key is having different core systems with a dedicated connector for that institution, so it really is tailored for everyone.”

Still, the company has seen successful growth over the last few years, with David attributing much of that to an emphasis on good partnerships.

“We’ve really built up our business here in the last two years, all based on partnerships. We’re going out and aggressively going after Fintech companies, explaining that we can connect you to any bank in the United States. We take that new Fintech partner and plug them right into the US banking business,” David said.

The emphasis on partnerships is also seen in the company’s plan for growth, with around 70 partners today and UK partnerships including companies such as Bottomline Technologies, CreditCore and Napier.

A change in banking

When it comes to the US banking industry as a whole, the biggest change David has seen in the market has been in response to the COVID-19 pandemic.

He said: “A lot of individuals here in the US still want an old-fashioned system. They want to physically go to a branch to bank, and a lot of institutions still operate on that model.

“Of course, when COVID hit last year it changed everything here in the US market, and markets across the world. Banks shut their lobbies and closed their branches and were forced to go digital. So now US banks, and European banks, are doing the same thing and moving to a fully automated and entirely digital platform. You can go online and do anything from opening an account to applying for a mortgage. You can get everything done through the online platform and never have to enter a bank lobby again. The entire process is automated, even documents can be signed online. That really is the largest change to the industry, not just in the US market, but in the entire world.”

Despite COVID accelerating the push to digital, David claims that banking, in general, has been changing in the US for the last five years even before COVID, particularly when supersize online retailers are factored in. There are so many platforms now, other than banks, competing for consumer wallet share.

“Banks had to adapt, not just due to COVID, but also because the competition is no longer just the guy in the bank branch across the street anymore, it’s someone else from a different sector entirely.”

When casting his thoughts to the future of the industry, David believes that banks will continue to get stronger through the use of technology as they embrace a digital-first attitude as opposed to “a walk-in social consumer-type institution.”

“We’re going to see more and more banks get stronger. I think you’ll see them competing very well with these retailers and other companies in the digital financial space because they’ve finally figured out that they have to go digital.”

https://thefintechtimes.com/nxtsoft-why-banks-that-embrace-digital-will-do-well-in-the-us-and-beyond/