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Addressing the “Three Myths about Community Banks and Open Banking” with iPaaS (integration platform as a service)

Addressing the “Three Myths about Community Banks and Open Banking” with iPaaS (integration platform as a service)

The Financial Brand recently published an insightful article by Shanda Purcell, Senior Director of Open Banking at CSI, entitled “Busting Three Myths about Community Banks and Open Banking,” where she addresses common misconceptions that may hinder a community bank (or credit union) from pursuing this fundamental aspect of modern financial services. As open banking continues to shape the future of finance, it’s crucial for community banks and credit unions to understand how Integration Platform as a Service (iPaaS) can address these myths and unlock the full potential of open banking initiatives.

Myth 1: Open Banking is Just for Big Banks

One prevailing myth is that open banking is exclusive to large financial institutions with extensive resources. However, with iPaaS solutions, community banks and credit unions can leverage third-party integrations through APIs, enabling them to embrace open banking at their own pace, and without changing their legacy core in most cases. iPaaS platforms offer flexibility and scalability, allowing community banks and credit unions to implement incremental tech upgrades that align with their growth strategies. From streamlining loan decisioning to enhancing payments processing, iPaaS empowers financial institutions to adopt open banking practices tailored to their unique needs.

Myth 2: Banking-as-a-Service is the Best Use Case for Community Banks

Another misconception is that Banking-as-a-Service (BaaS) represents the pinnacle of open banking opportunities for community banks and credit unions. While BaaS models offer potential revenue gains, they often require significant infrastructure investments and pose compliance risks. iPaaS solutions present community banks with alternative open banking use cases that are both valuable and low-risk. By focusing on API-based initiatives like real-time integrations for account opening, community banks and credit unions can achieve tech upgrades without overhauling their entire operations. iPaaS platforms facilitate seamless integrations with existing core systems, empowering financial institutions to expand their services and improve customer or member experiences.

Myth 3: Open Banking Applications Require Tech Geniuses

A common misconception is that adopting open banking applications necessitates additional IT resources and expertise. However, iPaaS platforms democratize access to open banking APIs, allowing line-of-business specialists within community banks and credit unions to maximize their value. With intuitive developer portals and user-friendly documentation, iPaaS solutions enable non-developers to understand and implement open banking initiatives effectively. By involving domain experts such as account specialists in loans or deposits, community banks and credit unions can leverage iPaaS to enhance operational efficiency and drive innovation without relying on tech geniuses.

What It All Boils Down To

iPaaS represents a powerful tool for community banks and credit unions looking to embrace open banking and dispel common myths. By leveraging iPaaS solutions, financial institutions can harness the benefits of open banking initiatives while mitigating risks and maximizing value. With iPaaS, open banking becomes accessible, manageable, and tailored to the unique needs of community banks and credit unions, empowering them to thrive in the evolving financial landscape.

About Sandbox Banking

Sandbox Banking is a digital transformation partner that helps unlock revenue via Glyue™, our groundbreaking Integration Platform as a Service (iPaaS). Glyue™ is used by North American banks and credit unions ranging from $500M to $200B+ in size, and provides connectors from the 14+ of the most popular core banking platforms to more than 50 lending, deposit, KYC/AML, data, cards, underwriting, mobile banking, and analytics solutions from the world’s best providers. To learn more, visit www.sandboxbanking.com.

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